Income Taxes (Tables)

12 Months Ended

Dec. 31, 2011

Pre-tax earnings by significant geographical locations

Pre-tax earnings by significant geographical locations are as follows (in thousands):



	Year Ended December 31,
	2011		2010⁽¹⁾		2009
United States	$	192,219	$	248,357	$	241,470
Foreign	118,860		114,343		98,923
	$	311,079	$	362,700	$	340,393

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(1) Amounts have been adjusted for the reclassification of certain discontinued operations to continuing operations

Provisions for income taxes

The provisions for income taxes from continuing operations are as follows (in thousands):



	Year Ended December 31,
	2011			2010			2009
Current tax expense:
Federal	$	62,858		$	79,551		$	75,698
State	9,262			16,511			10,621
Foreign	24,452			32,883			24,931
	96,572			128,945			111,250
Deferred tax expense (benefit):
Federal	(5,185		)	(10,183		)	1,744
State	(993		)	(1,571		)	92
Foreign	(1,967		)	(2,865		)	(2,906		)
	(8,145		)	(14,619		)	(1,070		)
Total provision	$	88,427		$	114,326		$	110,180

Deferred tax assets (liabilities)

Deferred tax assets (liabilities) are composed of the following components (in thousands):



	December 31,
	2011			2010
Allowance for doubtful accounts	$	595		$	800
Accrued product warranties	2,964			2,862
Inventory basis differences	10,295			7,957
Accrued liabilities	9,499			10,121
Deferred revenue	2,568			1,256
Current net operating loss	844			376
Other	(1,602		)	(746		)
Foreign accrued liabilities	1,402			568
Foreign intangibles	(255		)	(1,312		)
Foreign inventory	—			893
Foreign other	1,133			353
Net current deferred tax assets	$	27,443		$	23,128

Net operating loss carry-forwards	$	28,826		$	39,531
Credit carry-forwards	6,175			2,477
Domestic depreciation	(8,682		)	(11,796		)
Supplemental Executive Retirement Plan	7,684			6,415
Stock-based compensation	11,978			10,690
Intangibles	(22,436		)	(26,888		)
Deferred revenue	5,599			3,704
Other	7,561			4,172
Valuation allowance	(5,061		)	(5,563		)
Net long-term deferred tax assets	$	31,644		$	22,742

Foreign net operating loss recapture	$	(550	)	$	(531	)
Foreign credit carry-forwards	632			166
Foreign depreciation	3,431			3,426
Foreign stock-based compensation	788			1,080
Foreign social costs	(462		)	(860		)
Foreign intangibles	(23,074		)	(17,543		)
Foreign pension	33			26
Foreign net operating loss carry-forwards	2,877			2,438
Foreign other	747			381
Valuation allowance	(1,659		)	(1,746		)
Long-term deferred tax liabilities	$	(17,237	)	$	(13,163	)

Effective income tax rate reconciliation

The provision for income taxes differs from the amount of tax determined by applying the applicable United States statutory federal income tax rate to pretax income as a result of the following differences:



	Year Ended December 31,
	2011		2010		2009
Statutory federal tax rate	35.0	%	35.0	%	35.0	%
Increase (decrease) in rates resulting from:
Foreign rate differential	(3.8	)	(1.9	)	(4.0	)
Federal and state income tax credits	(2.9	)	(1.5	)	(4.7	)
State taxes	2.2		2.6		2.6
Non-deductible expenses	(1.2	)	(1.6	)	3.0
Other	(0.9	)	(1.1	)	0.5
Effective tax rate	28.4	%	31.5	%	32.4	%

The following table summarizes the activity related to unrecognized tax benefits, including amounts accrued for potential interest and penalties (in thousands):



	Year Ended December 31,
	2011			2010			2009
Balance, beginning of year	$	30,949		$	8,297		$	5,697
Increases related to current year tax positions	1,225			2,339			2,528
Increases related to prior year tax positions	4,192			1,561			227
Decreases related to prior year tax positions	(4,608		)	(11		)	(29		)
Acquisitions	—			25,716			—
Lapse of statute of limitations	(2,558		)	(6,953		)	—
Settlements	—			—			(126		)
Balance, end of year	$	29,200		$	30,949		$	8,297

Tax years open to examination by major taxing jurisdictions

The Company currently has the following tax years open to examination by major taxing jurisdictions:



	Tax Years:
United States Federal	2008 – 2010
State of California	2007 – 2010
State of Massachusetts	2008 – 2010
State of Oregon	2008 – 2010
France	2007 – 2010
Sweden	2006 – 2010
United Kingdom	2005 – 2010
Belgium	2009 – 2010

- 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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- Definition

Tabular disclosure of income tax examinations that an enterprise is currently subject to or that have been completed in the current period typically including a description of the examination, the jurisdiction conducting the examination, the tax year(s) under examination, the likelihood of an unfavorable settlement, the range of possible losses, the liability recorded, the increase or decrease in the liability from the prior period, and any penalties and interest that have been recorded.

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