Plantronics 2006 Annual Report Download - page 106

Download and view the complete annual report

Please find page 106 of the 2006 Plantronics annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 134

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134

expense relating to these restricted stock awards was $0.2 million and $1.2 million for fiscal 2005 and
2006, respectively. Plantronics did not issue any restricted common stock in fiscal 2004.
17. Income Taxes
Income tax expense for the fiscal years 2004, 2005 and 2006 consisted of the following:
Fiscal Year Ended March 31, (in thousands) 2004 2005 2006
Current:
Federal $ 8,255 $24,511 $26,789
State 833 2,095 4,221
Foreign 6,374 5,580 5,860
Total current provision for income taxes 15,462 32,186 36,870
Deferred:
Federal 7,851 584 (4,042)
State 20 62 (1,328)
Foreign 887 8 (96)
Total deferred provision for income taxes $ 8,758 $ 654 $ (5,466)
Provision for income taxes $24,220 $32,840 $31,404
The following is reconciliation between statutory federal income taxes and the total provision for income
taxes:
Fiscal Year Ended March 31, (in thousands) 2004 2005 2006
Tax expense at statutory rate $30,275 $ 45,626 $39,394
Foreign operations taxed at different rates (2,562) (11,089) (9,962)
State taxes, net of federal benefit 833 2,095 2,063
Research and development credit (940) (1,257) (1,243)
Net favorable tax contingency adjustments (2,700) (694) —
Other, net (686) (1,841) 1,152
Provision for income taxes $24,220 $ 32,840 $31,404
The effective tax rate for the fiscal years 2004, 2005 and 2006 was 28.0%, 25.2% and 27.9%, respectively.
Plantronics’ effective tax rate differs from the statutory rate due to the impact of foreign operations taxed
at different statutory rates, income tax credits, state taxes, and other factors. Its future effective tax rates
could be impacted by a shift in the mix of domestic and foreign income; tax treaties with foreign
jurisdictions; changes in tax laws in the United States or internationally; a change in management’s
estimates of future taxable income which results in a valuation allowance being required; or a federal, state
or foreign jurisdiction’s view of tax returns which differs materially from what management originally
provided. Management assesses the probability of adverse outcomes from tax examinations regularly to
determine the adequacy of the reserve for income taxes.
100 ⯗Plantronics