This excerpt taken from the MCRL 10-Q filed Aug 8, 2007.
1. SIGNIFICANT ACCOUNTING POLICIES
Interim Financial Information - The accompanying condensed consolidated financial statements of Micrel, Incorporated and its wholly-owned subsidiaries (Micrel or the Company) as of June 30, 2007 and for the three and six months ended June 30, 2007 and 2006 are unaudited. In the opinion of management, the condensed consolidated financial statements include all adjustments (consisting only of normal recurring accruals except for the adoption of FIN No. 48 as discussed in Note 14) that management considers necessary for a fair statement of its financial position, operating results and cash flows for the interim periods presented. Operating results and cash flows for interim periods are not necessarily indicative of results for the entire year. The Condensed Consolidated Balance Sheet as of December 31, 2006, was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted ("GAAP") in the United States of America. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Companys Annual Report on Form 10-K for the year ended December 31, 2006. These financial statements should also be read in conjunction with the Company's critical accounting policies included in the Companys Annual Report on Form 10-K for the year ended December 31, 2006.
Restricted Cash - During the first quarter of 2006, the Company elected to post a surety bond to stay payment of potential damages and interest arising from a legal judgment awarded to TRW during 2005 (see Note 12). As collateral for the surety bond, the Company placed $2.6 million in a registered pledge account. The amount pledged was classified as Restricted Cash in the Companys Condensed Consolidated Balance Sheet as of December 31, 2006. During the second quarter of 2007, the Company paid the legal judgment to TRW and the $2.6 million balance of the registered pledge account was transferred to the Company's unrestricted cash account.
Net Income Per Common and Equivalent Share