Netgear 2009 Annual Report Download - page 80

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Table of Contents
Net deferred tax assets consist of the following (in thousands):
Management’s judgment is required in determining the Company’s provision for income taxes, its deferred tax assets and any valuation
allowance recorded against its deferred tax assets. In management’s judgment it is more likely than not that such assets will be realized in the
future as of December 31, 2009, and as such no valuation allowance has been recorded against the Company’s deferred tax assets.
The effective tax rate differs from the applicable U.S. statutory federal income tax rate as follows:
Income tax benefits in the amount of $136,000, $81,000 and $8.4 million related to the exercise of stock options were credited to
additional paid-in capital during the years ended December 31, 2009, 2008 and 2007, respectively. As a result of changes in fair value of
available for sale securities, income tax expense of $40,000 and $11,000 was recorded in comprehensive income related to the year ended
December 31, 2009 and December 31, 2008, respectively.
As of December 31, 2009, the Company has $669,000 and $1.5 million of acquired federal and state net operating losses as well as
$128,000 of California tax credits carryforwards from its acquisition of Infrant. Use of these losses and credits are subject to annual limitation
under Internal Revenue Code Section 382. Additionally, excluding deferred tax benefits arising from uncertain tax positions, the Company has
California tax credit
78
Year Ended December 31,
2009
2008
Deferred Tax Assets:
Accruals and allowances
$
12,213
$
12,216
Net operating loss carryforwards
368
343
Stock
-
based compensation
5,418
4,103
Deferred rent
2,624
2,878
Deferred revenue
191
695
Tax credit carryforwards
2,112
686
Other
974
250
23,900
21,171
Deferred Tax Liabilities:
Acquired intangible assets
(2,399
)
(4,246
)
Depreciation and amortization
(3,491
)
(3,811
)
(5,890
)
(8,057
)
Net deferred tax assets
$
18,010
$
13,114
Current portion
$
13,347
$
13,129
Non
-
current portion
4,663
(15
)
Net deferred tax assets
$
18,010
$
13,114
Year Ended December 31,
2009
2008
2007
Tax at federal statutory rate
35.0
%
35.0
%
35.0
%
State, net of federal benefit
3.1
3.7
3.7
Impact of international operations
28.4
19.4
(0.6
)
Non
-
deductible stock
-
based compensation
4.0
2.8
1.4
In
-
process research and development
—
—
1.9
Tax credits
(1.7
)
(1.9
)
(0.9
)
Others
2.5
1.2
(0.3
)
Provision for income taxes
71.3
%
60.2
%
40.2
%