the 2009 Annual Report (pdf) - PLX Technology

A reconciliation of the beginning and ending amount of unrecognized tax benefits is a follows (in thousands):
Years Ended December 31,
2009 2008 2007
Unrecognized t ax benefits balance, beginning of period………………… $ 2,208 $ 1,895 $ 1,916
Gross increase for t ax positions for prior year…………………………… 876 26 (225)
Gross increase for t ax positions for current year………………………… 578 287 319
Reduct ion for lapse of California st at ut e of limitat ions………………… - - (115)
Unrecognized t ax benefits balance, end of period……………………… $ 3,662 $ 2,208 $ 1,895
Future changes in the remaining balance of unrecognized tax benefits will have no impact on the effective tax rate
as it is subject to a full valuation allowance.
The Company does not have any material accrued interest or penalties associated with any unrecognized tax
benefits. The Company does not believe it is reasonably possible that its unrecognized tax benefits will significantly
change within the next twelve months.
The Company is subject to taxation in the US and various state and foreign jurisdictions. The tax years 1997-2008
remain open to examination by the federal and state tax authorities due to certain acquired net operation loss and
overall credit carryforward positions.
The Company has made no provision for U.S. income taxes on approximately $0.7 million of cumulative
undistributed earnings of certain foreign subsidiaries because it is the Company’s intention to permanently reinvest
such earnings. If such earnings were distributed, the Company would accrue additional taxes of approximately $0.2
million. Pre-tax income (loss) from foreign operations was ($8.8 million), $81,000 and $86,000 in 2009, 2008 and
2007, respectively.
13. Commitments and Contingencies
The Company uses several contract manufacturers and suppliers to provide manufacturing services for its
products. As of December 31, 2009, the Company has purchase commitments for inventory with these contract
manufacturers and suppliers of approximately $7.7 million. These inventory purchase commitments are placed on a
sales order basis with lead times ranging from 4 to 16 weeks to meet estimated customer demand requirements.
The Company leases facilities, equipment, software tools and intellectual property (IP) under non-cancelable
operating or capital leases and service agreements. Future minimum payments under facility, equipment, software
tool and IP leases and agreements at December 31, 2009 are as follows (in thousands):
Facility and
Equipment Software IP Total
2010……………………… $ 573 $ 2,238 $ 825 $ 3,636
2011……………………… 477 1,955 1,200 3,632
2012……………………… 477 - 150 627
Total……………………… $ 1,527 $ 4,193 $ 2,175 $ 7,895
Rental expense for all facility leases aggregated approximately $1.0 million, $0.2 million and $0.1 million for the
years ended December 31, 2009, 2008 and 2007, respectively.
As of December 31, 2009, the Company’s capital leases consist of IP. Amortization expense relating to capital
leases was approximately $1.0 million in 2009. Included in other assets are capital lease assets of $2.4 million as of
December 31, 2009 and is net of accumulated amortization of $1.0 million. There were no capital leases in 2008 and
2007.
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