Taxes for Fiscal Years 2000 through 2006 reduced by $5.2 Million

MILPITAS, Calif., Nov. 17 /PRNewswire-FirstCall/ -- Phoenix Technologies Ltd. (Nasdaq: PTEC), the leader in PC 3.0(TM) products, services and embedded technologies, today announced an agreement with the Taiwan National Tax Authority (TNTA) to settle a transfer-pricing dispute for the 2000 through 2006 tax years. The agreement will result in a $5.2 million reduction of the taxes previously accrued by the Company in respect of those years.

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During the fiscal year ended September 30, 2009, the Company submitted a proposal to the Taiwan National Tax Authority for a re-examination of the allocation of expenses under Taiwanese transfer pricing guidelines for the fiscal years 2000 through 2006. The Company has now received final tax assessments from the TNTA in respect of each of these years that are in accordance with the proposal submitted by the Company. The assessments call for total tax and interest payments of approximately $4.0 million, of which approximately $1.9 million had previously been paid by Phoenix. Accordingly, during the current fiscal quarter ending December 31, 2009, the Company intends to make payments to the TNTA totaling $2.1 million in final settlement of its liabilities for taxes and interest for these years.

In accordance with its policies regarding the accounting for uncertain tax positions, the Company had previously recorded tax and interest expenses totaling approximately $9.2 million for the relevant years. As a result of the settlement, the final assessment of $4.0 million, and the intended payment described above, the Company now expects to record a net reduction of tax expense relating to these years of approximately $5.2 million in the current fiscal quarter ending December 31, 2009.

"We are very pleased to have finally settled this long standing transfer pricing dispute with the TNTA and to have settled our tax liability for fiscal years 2000 to 2006," said Richard Arnold, COO and CFO of Phoenix Technologies, Inc. "We continue to work with the TNTA in respect of fiscal years 2007 and 2008 and are hopeful of reaching an acceptable settlement in respect of those additional years over the coming months."

About Phoenix Technologies Ltd.

Phoenix Technologies Ltd. (Nasdaq: PTEC), the leader in PC 3.0(TM) products, services and embedded technologies, pioneers open standards and delivers innovative solutions that enable the PC industry's top system builders and specifiers to differentiate their systems, reduce time-to-market and increase their revenues. The Company's flagship products and services -- SecureCore Tiano, Embedded BIOS, Phoenix Freeze, FailSafe, HyperSpace, and eSupport.com -- are revolutionizing the PC user experience by delivering unprecedented performance, security, reliability, continuity, and ease-of-use. The Company established industry leadership and created the PC clone industry with its original BIOS product in 1983. Phoenix has over 215 technology patents issued and pending, and has shipped firmware in over one billion systems. Phoenix is headquartered in Milpitas, California with offices worldwide. For more information, visit http://www.phoenix.com.

Phoenix, Phoenix Technologies, Phoenix SecureCore, SecureCore Tiano, Embedded BIOS, Phoenix Freeze, FailSafe, HyperSpace, PC 3.0, eSupport.com and the Phoenix Technologies logo are trademarks and/or registered trademarks of Phoenix Technologies Ltd. All other marks are the marks of their respective owners.

    Investor Relations Contacts:
    Phoenix Technologies Ltd.
    Richard Arnold
    Chief Operating Officer and Chief Financial Officer
    Tel. +1 408 570 1256
    investor_relations@phoenix.com

    The Piacente Group, Investor Relations
    Kristen McNally or Brandi Floberg
    Tel. +1 212 481 2050
    phoenix@thepiacentegroup.com

SOURCE Phoenix Technologies Ltd.

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