Plantronics 2013 Annual Report Download - page 46

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The pre-tax charges incurred during fiscal year 2013 included $1.9 million for severance and related benefits and an immaterial
amount of accelerated amortization expense on leasehold improvement assets with no alternative future use. We expect to record
$1.0 million for lease termination costs and the remaining accelerated depreciation on leasehold improvements when we exit the
facility in the first quarter of fiscal year 2014. We anticipate that the plan will be substantially complete by the end of the first
quarter of fiscal year 2014.
Interest and Other Income (Expense), Net
Fiscal Year Ended Fiscal Year Ended
(in thousands) March 3 1, 2013 March 3 1, 2012 Change March 3 1, 2012 March 3 1, 2011 Change
Interest and other income
(expense), net $ 328 $ 1,249 $ (921) (73.7)% $ 1,249 $ (56) $ 1,305 (2,330.4)%
% of total net revenues —% 0.2% 0.2% — %
During fiscal year 2013, interest and other income (expense), net decreased from the prior year due to lower levels of interest
income on our investment portfolio and slightly higher interest expense on our revolving line of credit.
During fiscal year 2012, interest and other income (expense), net increased from fiscal year 2011 due primarily to fiscal year 2011
including an expense related to interest and penalties recorded upon settlement of an indirect tax matter in Brazil. In addition, we
had greater interest income resulting from increased interest on a higher average investment portfolio in fiscal year 2012.
Income Tax Expense
Fiscal Year Ended Fiscal Year Ended
(in thousands) March 31,
2013 March 31, 2012 Change March 31, 2012 March 31, 2011 Change
Income before income
taxes $ 138,425 $ 142,602 $ (4,177) (2.9)% $ 142,602 $ 140,656 $ 1,946 1.4 %
Income tax expense 32,023 33,566 (1,543) (4.6)% 33,566 31,413 2,153 6.9 %
Net income $ 106,402 $ 109,036 $ (2,634) (2.4)% $ 109,036 $ 109,243 $ (207) (0.2)%
Effective tax rate 23.1% 23.5% 23.5% 22.3%
In comparison to fiscal year 2012, the decrease in the effective tax rate for fiscal year 2013 was due primarily to the increased
benefit from the U.S. federal research tax credit in fiscal 2013 offset by a smaller proportion of income earned in foreign jurisdictions
that is taxed at lower rates. The U.S. federal research tax credit was reinstated in January 2013 retroactively to January 1, 2012;
therefore, the fiscal year 2013 effective tax rate includes the impact of the credit earned in our fourth quarter of fiscal 2012 compared
to the benefit of the credit for only three quarters in fiscal 2012.
In comparison to fiscal year 2011, the increase in the effective tax rate for fiscal year 2012 was due primarily to the reduced benefit
from the U.S. federal research tax credit as the credit expired in December 2011; therefore, the effective tax rate in fiscal year
2012 included the benefit of the credit for only three quarters.
Our effective tax rate for fiscal years 2013, 2012, and 2011 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. Our future tax rate 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 U.S. or internationally,
or a change in estimate of future taxable income, which could result in a valuation allowance being required.
On January 2, 2013, the American Taxpayer Relief Act of 2012, which included a provision that retroactively extended the federal
tax research credit to January 1, 2012 for two years, was signed into law. We recognized an approximate $1.8 million discrete tax
benefit in the fourth quarter of fiscal year 2013 for the previously expired period from January 1, 2012 to December 31, 2012.
We had $11.1 million of unrecognized tax benefits as of March 31, 2013 and 2012 compared to $10.5 million as of March 31,
2011. The unrecognized tax benefits as of the end of fiscal year 2013 would favorably impact the effective tax rate in future
periods if recognized.
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