Nautilus 2009 Annual Report Download - page 55

Table of Contents
At December 31, 2009, Nautilus has $23.0 million of net operating loss carryforwards in non-U.S. jurisdictions, including $10.2 million, $6.4
million, $3.6 million and $2.8 million related to its subsidiaries in Germany, Switzerland, China and Italy, respectively. As of December 31,
2009, the Company’s non-U.S. net operating loss carryforwards were fully offset by a valuation allowance. The net operating losses for
Switzerland, China and Italy expire between 2013 and 2017. Net operating loss carryforwards for Germany may be used indefinitely.
The timing and manner in which the Company is permitted to utilize its net operating loss carryforwards may be limited by Internal Revenue
Code Section 382, Limitation on Net Operating Loss Carry-forwards and Certain Built-in-Losses Following Ownership Change . At
December 31, 2009, the Company had approximately $45.1 million in U.S. federal net operating loss carryforwards, and an undetermined
amount of income tax credits and state net operating loss carry forwards, which are potentially subject to the Section 382 limitation.
Under accounting guidance, an uncertain tax position represents the Company’s expected treatment of a tax position taken in a filed tax return,
or planned to be taken in a future tax return, that has not been reflected in measuring income tax expense for financial reporting purposes. A
reconciliation of the beginning and ending amount of gross unrecognized tax benefits from uncertain tax positions (excluding the impact of
penalties and interest) is as follows:
Unrecognized tax benefits, if recognized, would affect the Company’s effective tax rate.
The Company recognizes tax-related interest and penalties as a component of income tax expense. As of December 31, 2009, the Company
recognized a cumulative liability for interest and penalties of $0.9 million. As of December 31, 2008, the Company recognized a cumulative
liability for interests and penalties of $0.6 million.
The Company’s U.S. federal income tax returns for 2003 through 2009 are open to review by the U.S. Internal Revenue Service. The Company’
s
state income tax returns for 2003 through 2009 are open to review, depending on the respective statute of limitation in each state. In addition, the
Company files income tax returns in numerous non-U.S. jurisdictions with varying statutes of limitation.
As of December 31, 2009, the Company believes it is reasonably likely that, within the next 12 months, $0.2 million of previously unrecognized
tax benefits will be recognized, primarily as reductions in income tax expense, as statutes of limitation expire.
(12) STOCKHOLDERS’ EQUITY
Common Stock
As of December 31, 2009, the Company had 75.0 million authorized shares of common stock, no par value, of which 30.7 million shares were
issued and outstanding and 1.4 million shares were reserved for future issuance upon exercise of stock options.
In May 2008, the Company’s Board of Directors authorized the repurchase of up to $10.0 million of the Company’s common stock. The
repurchase program does not obligate the Company to acquire any specific number of shares or acquire shares over any specified period of time.
The Company repurchased 1.0 million
51
(In thousands) 2009 2008
Balance, beginning of year
$
2,165
$
2,166
Increases due to tax positions taken in previous periods
522
28
Decreases due to tax positions taken in previous periods
(22
)
(4
)
Increases due to tax positions taken in the current period
884
729
Decreases due to settlements with taxing authorities
—
(
63
)
Decreases due to lapse of statute of limitations
(300
)
(691
)
Balance, end of year
$
3,249
$
2,165