Latest Comments from the Commission

 

“Latest Comments from the Commission” intends to highlight some of the more frequently appearing quotes from recent SEC comment letters. For a complete listing of SEC comment letters and registrants’ responses, please visit the commission’s website at www.sec.gov.

Impairment of Long-lived Assets
You disclose that your impairment evaluation of long-lived assets, including finite-lived intangible assets, involves comparing estimates of future cash flows to the carrying amount of the asset being evaluated. Estimates of future cash flows are normally inherently uncertain. In light of the significance of finite-lived intangible assets to your reported assets, in future filings please disclose how you estimate future cash flows for impairment testing purposes, including how you attribute cash flows to specific assets being evaluated for potential impairment. Please also describe uncertainties associated with those cash flow estimates and describe the potential for reasonably possible variability. Refer to Release No. 33-8350: “Interpretation: Commission Guidance Regarding Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

As a related matter, in future filings please also disclose how you determine fair value when estimated undiscounted future cash flows are less than the carrying amount of a long-lived asset being evaluated for impairment. Also address the uncertainties and subjectivity of those estimates, as appropriate.

Contractual Obligations and Uncertain Tax Positions
Financial statement footnote 15 discloses that the obligation for uncertain tax positions is $10.4 million as of December 31, 2008. In future filings please clarify whether FIN 48 obligations are included in the table of contractual obligations. If FIN 48 obligations are not included, please disclose in the narrative to the table with explanation of the basis for exclusion.

Non-GAAP Measures in Earnings Releases
We note that you present non-GAAP financial measures and related reconciliations in the form of Condensed Consolidated Statements of Income for the three and six months ended June 30, 2009 and 2008. The format presents numerous non-GAAP balances and subtotals most of which have not been individually described to investors in your earnings release. Inclusion of a non-GAAP statement of operations leaves an impression that the non-GAAP presentation represents a comprehensive basis of accounting and gives undue prominence to the non-GAAP financial information. In future earnings releases please delete the non-GAAP statements of income. If you elect to present non-GAAP financial measures, please provide the reconciliation and narrative disclosures set forth in Item 10(e)(1)(i)(C) and (D) for each individual non-GAAP financial measure presented. Refer to also to Instruction 2 of Item 2.02 of Form 8-K.

As a related matter, it appears that the various non-GAAP financial measures eliminate recurring expenses, such as financing charges, asset write-downs, foreign exchange gains or losses, litigation expenses, stock-based compensation and amortization of intangible assets, among others. Accordingly, please tell us how your presentation considers the disclosure guidance from Question 8 of the Frequently Asked Questions Regarding the Use of Non-GAAP Financial Measures. Appropriately expand future earnings releases.

Executive Compensation
We note from your disclosure under “Base Salaries” that you have incorporated by reference from your proxy statement that you target total cash compensation for your named executive officers at the 50th percentile of your peer companies. Given that you target the cash elements of your compensation packages, please briefly discuss in your applicable future filings how each element of cash compensation you provide to the named executive officers relates to the data you have analyzed from the peer companies and include an analysis of where actual payments under each element of cash compensation actually fell within the targeted range. If any of your named executive officers are compensated at levels that are materially different from the targeted levels of compensation, please also provide discussion and analysis as to why.

We note from your disclosure under “Annual Cash Incentives” that you do not disclose the amount of the targets or goals in order for your named executive officers to receive their non-equity incentive plan compensation.  In future filings, please provide such disclosure as applicable. To the extent you believe that disclosure of such information, on a historical basis, would result in competitive harm such that the information could be excluded under Instruction 4 to Item 402(b) of Regulation S-K, please provide us with a detailed explanation supporting your conclusion. To the extent that it is appropriate to omit specific targets or goals, you are required to provide appropriate disclosure pursuant to Instruction 4 to Item 402(b) of Regulation S-K.  Refer also to Question 118.04 of the Regulation S-K Compliance and Disclosure Interpretations available on our website at http://www.sec.gov/divisions/corpfin/guidance/regs-kinterp.htm.  In discussing how difficult or likely it will be to achieve the targets or goals, you should provide as much detail as necessary without disclosing information that poses a reasonable risk of competitive harm.

We refer to your disclosure under the caption “Long-Tem, Equity-Based Incentive Awards” in the proxy statement that you have incorporated by reference into your Form 10-K.  We note minimal, if any, discussion and analysis as to how the annual stock option grants and performance share awards were determined. In your future filings, as applicable, please include substantive analysis and insight into how your Compensation Committee made it stock option grant and performance share award determinations with respect to each named executive officer. Refer to subparagraphs (b)(l)(iii) and (v) of Item 402 of Regulation S-K.  For example, please discuss and analyze how the Compensation Committee determined the actual number of shares underlying the stock options that were awarded to your named executive officers and how and why those awards varied among the named executive officers.