NOTE 19. ERROR CORRECTIONS

a. The comparative consolidated financial statements as of and for the year ended December 29, 2012 presented herein and for the year ended December 31, 2011 have been restated to correct the misapplication of accounting principles related to our accounting for deferred income taxes and uncertain income tax positions, and related to capitalizing certain inventory-related overhead costs into inventory that had previously been directly expensed through cost of revenues. Most significantly, the Company did not appropriately re-measure its reserves for uncertain income tax positions associated with a decrease in exposure that occurred in 2012 related to the historical utilization of certain income tax credits. The Company also corrected the prior year financial statements for three additional items that impacted our income tax accounts: the Company did not adjust its deferred tax liabilities to reflect the effect of certain tax law changes enacted in 2012; the Company did not appropriately allocate its valuation allowance against its deferred tax assets reflected on the balance sheet; and the Company did not record the deferred tax effect related to a change in the value of certain liabilities in 2012.

The net impact of revising our comparative consolidated financial statements for these items are shown in the tables below. There was no change to the total amount of income tax loss carry-forwards or any other income tax assets available or utilized for tax purposes, nor to the actual amount of income tax payable to taxing authorities as a result of these matters in any period. In addition, the Company’s previously reported unaudited condensed consolidated quarterly financial information that was impacted by these corrections has been restated in Part II, Item 9B. Other Information.

The tables below illustrate the effects on the Consolidated Balance Sheets, Statements of Operations and Statements of Comprehensive (Loss) Income presented herein:


		As of
		December 29, 2012
		As Previously
(in thousands)		Reported*		Adjustments		As Restated
CONSOLIDATED BALANCE SHEETS
Current Assets
	Inventories, net	$	23,548	$	2,119	$	25,667
	Deferred tax assets	$	43,630	$	1,341	$	44,971
Non-current assets:
	Deferred tax assets	$	-	$	1,042	$	1,042
Current Liabilities
	Deferred income taxes	$	2,466	$	(2,466)	$	-
Non-current liabilities
	Deferred income taxes	$	41,936	$	962	$	42,898
	Liability for unrecognized tax benefits	$	34,957	$	(6,753)	$	28,204
Equity:
	Common stock and additional paid in capital	$	1,553,137	$	1,950	$	1,555,087
	Accumulated deficit	$	(917,825)	$	10,809	$	(907,016)



			Year ended						Year ended
		December 29, 2012						December 31, 2011
		As Previously						As Previously
(in thousands, except for per share amounts)		Reported*		Adjustments		As Restated		Reported*		Adjustments		As Restated
CONSOLIDATED STATEMENTS OF OPERATIONS
Cost of revenues		$	157,918	$	931	$	158,849	$	211,630	$	(440)	$	211,190
Provision for income taxes		$	(45,991)	$	8,690	$	(37,301)	$	(9,897)	$	-	$	(9,897)
Net (loss) income		$	(328,018)	$	7,759	$	(320,259)	$	70,986	$	440	$	71,426
Net (loss) income per common share - basic		$	(1.51)	$	0.03	$	(1.48)	$	0.30	$	0.01	$	0.31
Net (loss) income per common share - diluted		$	(1.51)	$	0.03	$	(1.48)	$	0.30	$	0.00	$	0.30

			Year ended						Year ended
		December 29, 2012						December 31, 2011
		As Previously						As Previously
(in thousands, except for per share amounts)		Reported*		Adjustments		As Restated		Reported*		Adjustments		As Restated
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
Net (loss) income		$	(328,018)	$	7,759	$	(320,259)	$	70,986	$	440	$	71,426
Comprehensive (loss) income		$	(326,256)	$	7,759	$	(318,497)	$	67,768	$	440	$	68,208

*	As previously reported in our December 29, 2012 Form 10-K/A as filed on November 12, 2013.

The corrections resulted in offsetting changes within the “net cash provided by operating activities” section in the Consolidated Statements of Cash Flows for the years ended December 29, 2012 and December 31, 2011 but did not change the ending net total of that section. There were also no changes in any other sections of the Consolidated Statements of Cash Flows for the same periods.

b. Prior Error Corrections Disclosed in 2012 Form 10-K/A as filed on November 12, 2013

The historical consolidated financial statements for fiscal 2012, 2011, and 2010 were restated in the Form 10-K/A filed on November 12, 2013 to correct the misapplication of accounting principles related to income tax benefits associated with stock option deductions in excess of the expense recognized in the financial statements. In the prior periods impacted by this matter, the Company understated the income tax benefits of its loss carry-forwards which were required to be included in equity rather than in income tax expense (benefit). These income tax benefits were generated primarily in the 1999 and 2000 years and were utilized to reduce the previously recorded income tax expense beginning in 2006 and through the first two quarters of 2013. From 2006 and forward, the Company should have recorded the income tax benefit of utilizing these stock option related loss carry-forwards as an increase to Additional Paid-in Capital, rather than as a reduction of income tax expense. There was no change to the total amount of income tax loss carry-forwards or any other income tax assets available or utilized for tax purposes, nor to the actual amount of income tax payable to the taxing authorities as a result of this matter, in any period impacted by this matter. In connection with restating our historical financial statements, the Company also made certain other corrections for the timing of recognition of amounts related to amended tax return filings and certain tax credits and for the recognition of a foreign subsidiary’s deferred tax assets not previously recognized. The foreign subsidiary was acquired in 2010 and the deferred tax assets should have been recognized as part of the acquisition accounting, and, therefore, should have resulted in a corresponding adjustment to goodwill.

The tables below illustrate the effects on the Consolidated Balance Sheets and Statements of Operations:


		As of
		December 29, 2012						December 31, 2011
		As Previously Reported		As Previously		As Previously		As Previously Reported		As Previously		As Previously
(in thousands)		in Form 10-K/A*		Reported in 10-Q**		Reported in 10-K***		in Form 10-K/A*		Reported in 10-Q**		Reported in 10-K***
CONDENSED CONSOLIDATED BALANCE SHEETS
Non-current assets:
	Prepaid tax expenses	$	19,152	$	11,851	$	25,077	$	34,318	$	18,293	$	27,898
	Goodwill		252,419		252,419		252,419		519,454		520,899		520,899
Non-current liabilities
	Deferred tax and other long-term tax liabilities	$	41,936	$	44,849	$	44,849	$	38,943	$	40,663	$	40,663
	Liability for unrecognized tax benefits - non-current	$	34,957	$	29,236	$	38,915	$	33,020	$	26,929	$	38,460
Equity:
	Common stock and additional paid in capital	$	1,553,137	$	1,527,710	$	1,527,084	$	1,623,236	$	1,587,587	$	1,577,792
	Accumulated deficit	$	(917,825)	$	(896,891)	$	(892,718)	$	(515,623)	$	(490,183)	$	(482,314)


			Year ended
		December 29, 2012						December 31, 2011						December 26, 2010
		As Previously Reported		As Previously		As Previously		As Previously Reported		As Previously		As Previously		As Previously Reported		As Previously		As Previously
(in thousands, except for per share amounts)		in Form 10-K/A*		Reported in 10-Q**		Reported in 10-K***		in Form 10-K/A*		Reported in 10-Q**		Reported in 10-K***		in Form 10-K/A*		Reported in 10-Q**		Reported in 10-K***
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Impairment of goodwill and purchased intangible assets		$	274,637	$	276,082	$	276,082	$	-	$	-	$	-	$	-	$	-	$	-
Provision for income taxes		$	(45,991)	$	(49,052)	$	(52,748)	$	(9,897)	$	183	$	(720)	$	(37,064)	$	(33,507)	$	(23,940)
Net (loss) income		$	(328,018)	$	(332,524)	$	(336,220)	$	70,986	$	81,066	$	80,163	$	76,260	$	79,817	$	89,384
Net (loss) income per common share - basic		$	(1.51)	$	(1.54)	$	(1.55)	$	0.30	$	0.35	$	0.34	$	0.33	$	0.34	$	0.39
Net (loss) income per common share - diluted		$	(1.51)	$	(1.54)	$	(1.55)	$	0.30	$	0.34	$	0.34	$	0.32	$	0.34	$	0.38

*	As previously reported in our December 29, 2012 Form 10-K/A filed on November 12, 2013
**	As previously reported in our March 30, 2013 Form 10-Q
***	As previously reported in our December 29, 2012 Form 10-K