Plantronics 2009 Annual Report Download - page 101

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93
On April 1, 2007, the Company adopted FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes – an
Interpretation of FASB Statement No. 109” (“FIN 48”). Under FIN 48, the impact of an uncertain income tax position on income tax
expense must be recognized at the largest amount that is more-likely-than-not to be sustained. An uncertain income tax position will
not be recognized unless it has a greater than 50% likelihood of being sustained. There were no material adjustments as a result of the
adoption of FIN 48. At the adoption date, the Company had $12.4 million of unrecognized tax benefits. As of March 31, 2008 and
March 31, 2009, respectively, the Company had $12.4 million and $11.1 million of unrecognized tax benefits all of which would
favorably impact the effective tax rate in future periods if recognized.
A reconciliation of the change in the amount of gross unrecognized income tax benefits for the periods is as follows:
(in thousands) 2008 2009
Balance at beginning of period $12,456 $12,436
Increase (decrease) of unrecognized tax benefits related to prior years 396 (155)
Increase of unrecognized tax benefits related to the current year 2,977 2,205
Decrease of unrecognized tax benefits related to settlements (3,156) -
Reductions to unrecognized tax benefits related to lapse of applicable statute of limitations (237) (3,396)
Balance at end of period $12,436 $11,090
March 31,
The Company’s continuing practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The
interest related to unrecognized tax benefits as of March 31, 2009 is approximately $1.6 million, compared to $1.7 million as of March
31, 2008. No penalties have been accrued.
Although the timing and outcome of income tax audits is highly uncertain, it is possible that certain unrecognized tax benefits related
to various jurisdictions may be reduced as a result of the lapse of the applicable statute of limitations by the end of fiscal 2010. The
Company cannot reasonably estimate the reductions at this time. Any such reduction could be impacted by other changes in
unrecognized tax benefits.
The Company and its subsidiaries are subject to taxation in various foreign and state jurisdictions as well as in the U.S. The
Company’s U.S. federal and state income tax returns are generally not subject to examination by the tax authorities for tax years
before 2006 and 2005, respectively. Foreign income tax matters for material tax jurisdictions have been concluded through tax years
before 2003, except for the United Kingdom, Germany and France which have been concluded through fiscal 2006.
15. COMPUTATION OF EARNINGS (LOSS) PER COMMON SHARE
The following table sets forth the computation of basic and diluted earnings (loss) per share:
(in thousands, except earnings per share)
2007 2008 2009
Net income (loss) $50,143 $68,395 $(64,899)
Weighted average shares-basic 47,361 48,232 48,589
Dilutive effect of employee equity incentive plans 659 858 -
Weighted average shares-diluted 48,020 49,090 48,589
Earnings (loss) per share-basic $ 1.06 $ 1.42 $ (1.34)
Earnings (loss) per share-diluted $ 1.04 $ 1.39 $ (1.34)
Potentially dilutive securities excluded from earnings per
diluted share because their effect is anti-dilutive 5,931 5,791 7,521
Fiscal Year Ended March 31,