Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

ncome before income taxes for the years ended December 31, 2014, 2013 and 2012 was derived from the following sources:



(In thousands)	2014			2013		2012
Domestic	$	(118,917	)	$	29,066	$	49,056
Foreign	105,525			67,129		50,647
(Loss) income before income tax (benefit) expense and equity in net loss (income of affiliates	$	(13,392	)	$	96,195	$	99,703

Components of Income Tax (Benefit) Expense

Income tax (benefit) expense for the years ended December 31, 2014, 2013, and 2012 is summarized as follows:



(In thousands)	2014			2013			2012
Current:
Federal	$	1,574		$	854		$	5,797
State	111			772			654
Foreign	21,459			12,937			11,183
	23,144			14,563			17,634
Deferred (net of valuation allowance):
Federal	(41,484		)	6,003			11,165
State	(1,545		)	(650		)	168
Foreign	(1,687		)	1,753			1,914
	(44,716		)	7,106			13,247
Income tax (benefit) expense	$	(21,572	)	$	21,669		$	30,881

Reconciliation of Income Tax Expense With Expected Amounts Based Upon Statutory Federal Tax Rates

Income tax (benefit) expense differs from the expected amounts based upon the statutory federal tax rates for the years ended December 31, 2014, 2013, and 2012 as follows:



(In thousands)	2014			2013			2012
Expected federal income tax at statutory rate	$	(4,687	)	$	33,668		$	34,896
State income taxes before valuation allowance, net of federal tax effect	(2,115		)	(357		)	440
Income (losses) without tax expense (benefit)	(72		)	22			(40		)
Effect of foreign source income	(19,996		)	(10,583		)	(5,314		)
Tax contingencies	1,379			1,383			1,374
Valuation allowance	2,106			445			358
Non-deductible acquisition costs	2,176			—			—
U.S. federal research credit	(2,085		)	(3,233		)	(790		)
Other items, net	1,722			324			(43		)
Income tax (benefit) expense	$	(21,572	)	$	21,669		$	30,881

Deferred Tax Assets And Deferred Tax Liabilities

The significant components of the Company’s deferred tax assets and deferred tax liabilities at December 31, 2014 and 2013 are as follows:



(In thousands)	2014			2013
Deferred tax assets attributable to:
Accounts receivable	$	243		$	269
Inventory	5,663			2,853
Accruals not currently deductible for tax purposes	9,915			8,844
Net operating loss and credit carryforwards	12,183			3,972
Capital loss carryforward	3,088			2,779
Depreciation	10,498			1,070
Equity compensation	3,662			3,157
Asset impairments	732			732
Purchased intangible assets	—			1,439
Other, net	5,549			2,976
Gross deferred tax assets	51,533			28,091
Valuation allowance	(11,104		)	(5,435		)
Total deferred tax assets	40,429			22,656
Deferred tax liabilities attributable to:
Depreciation	—			(3,245		)
Purchased intangible assets	(77,149		)	(601		)
Total deferred tax liabilities	(77,149		)	(3,846		)
Net deferred tax (liabilities) assets	$	(36,720	)	$	18,810

Reconciliations of Total Amount of Gross Unrecognized Tax Benefits

Reconciliations of the beginning and ending balances of the total amounts of gross unrecognized tax benefits for the years ended December 31, 2014 and 2013 are as follows:



(In thousands)	2014			2013
Gross unrecognized tax benefits at beginning of year	$	4,277		$	5,419
Increase from acquisition	2,431			—
Increases in tax positions for prior years	—			28
Decreases in tax positions for prior years	(246		)	—
Increases in tax positions for current year	2,409			1,879
Settlements	(1,385		)	(2,298		)
Lapse in statute of limitations	(1,502		)	(751		)
Gross unrecognized tax benefits at end of year	$	5,984		$	4,277

- Definition

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

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