Taxes

6 Months Ended

Jun. 30, 2012

Taxes [Abstract]

Taxes

10. Taxes

The Company’s provision for income taxes is determined using an estimate of its annual effective tax rate for each of its legal entities in accordance with the accounting guidance for income taxes. Where the Company has entities with losses and does not expect to release the tax benefits in the foreseeable future, those entities are excluded from the effective tax calculation. Non-recurring and discrete items that impact tax expense are recorded in the period incurred.

In determining the Company’s provision for income taxes, net deferred tax assets, liabilities, valuation allowances and uncertain tax positions, management is required to make judgments and estimates related to projections of domestic and foreign profitability, the timing and extent of the utilization of loss carryforwards, applicable tax rates, transfer pricing methods, expected tax authority positions on audit and prudent and feasible tax planning strategies. Judgments and estimates related to the Company’s projections and assumptions are inherently uncertain and, therefore, actual results could differ materially from projections.

As of June 30, 2012, the Company had U.S. net operating loss carryforwards of approximately $99.0 million, foreign net operating loss carryforwards of approximately $13.3 million, and domestic and foreign research and experimentation tax credit carryforwards of $2.1 million. Certain net operating losses expire in 2012 although the Company expects to utilize them prior to their expiration. The earliest net operating loss with a deferred tax asset established expires in 2019. The utilization of domestic and foreign net operating loss and tax credit carryforwards may be subject to annual limitations due to ownership changes as provided by the local tax law. The Company has not recorded a deferred tax liability for undistributed earnings of $0.5 million of certain foreign subsidiaries, since such earnings are considered to be reinvested indefinitely. If the earnings were distributed, the Company would be subject to federal income and foreign withholding taxes. Determination of an unrecognized deferred income tax liability with respect to such earnings is not practicable.

The following table summarizes the Company’s provision for (benefit from) income taxes included in its unaudited condensed consolidated statements of operations for the periods indicated (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Interim period provision for income taxes before valuation allowance	$	1,653		$	(414	)	$	3,313		$	52
Decrease due to valuation allowance		(36	)		(9,926	)		(67	)		(9,926	)
Provision for (benefit from) income taxes	$	1,617		$	(10,340	)	$	3,246		$	(9,874	)