Quantum Corporation Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

INCOME TAXES (Tables)

INCOME TAXES (Tables)

12 Months Ended

Mar. 31, 2014

Pre-tax loss reflected in the Consolidated Statements of Operations for the years ended March 31, 2014, 2013 and 2012 follows (in thousands):

	For the year ended March 31,
	2014			2013			2012
U.S	$	(22,549	)	$	(52,940	)	$	(9,036	)
Foreign		2,292			1,922			667
	$	(20,257	)	$	(51,018	)	$	(8,369	)

Schedule of Components of Income Tax Provision

Income tax provision consists of the following (in thousands):
	For the year ended March 31,
	2014		2013			2012
Federal:	$	-	$	-		$	-
State:
Current		76		231			301
Foreign:
Current		1,096		1,090			1,847
Deferred		45		(160	)		(1,261	)
Total foreign		1,141		930			586
Income tax provision	$	1,217	$	1,161		$	887

Schedule of Income Tax Rate Reconciliation Amount

The income tax provision differs from the amount computed by applying the federal statutory rate of 35% to loss before income taxes as follows (in thousands):

	For the year ended March 31,
	2014			2013			2012
Benefit at federal statutory rate	$	(7,090	)	$	(17,856	)	$	(2,929	)
State taxes		76			300			301
Unbenefited losses and credits		7,974			18,715			3,627
Net release of contingent tax reserves		460			(130	)		(176	)
Other		(203	)		132			64
	$	1,217		$	1,161		$	887

Schedule of Components of Deferred Tax Assets and Liabilities

Significant components of deferred tax assets and liabilities are as follows (in thousands):

	As of March 31,
	2014			2013
Deferred tax assets:
Inventory valuation method	$	1,742		$	3,870
Accrued warranty expense		2,336			2,873
Distribution reserves		1,950			1,407
Loss carryforwards		81,012			72,969
Foreign tax and research and development credit carryforwards		191,372			206,764
Restructuring charge accruals		3,191			1,810
Other accruals and reserves not currently deductible for tax purposes		32,465			34,824
		314,068			324,517
Less valuation allowance		(261,337	)		(269,373	)
Deferred tax asset	$	52,731		$	55,144
Deferred tax liabilities:
Depreciation	$	(3,570	)	$	(6,466	)
Acquired intangibles		(2,794	)		(2,664	)
Tax on unremitted foreign earnings		(17,245	)		(15,679	)
Other		(28,330	)		(29,492	)
Deferred tax liability	$	(51,939	)	$	(54,301	)
Net deferred tax asset	$	792		$	843

Reconciliation of Unrecognized Tax Benefits

A reconciliation of the gross unrecognized tax benefits follows (in thousands):

	For the year ended March 31,
	2014			2013			2012
Beginning balance	$	32,549		$	32,744		$	33,012
Settlement and effective settlements with tax authorities and related remeasurements		(488	)		(60	)		(255	)
Lapse of statute of limitations		-			(135	)		(105	)
Increase in balances related to tax positions taken in prior period		388			-			92
Ending balance	$	32,449		$	32,549		$	32,744