Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Pre-tax earnings by significant geographical locations

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



	Year Ended December 31,
	2012		2011		2010
United States	$	180,022	$	192,219	$	248,357
Foreign	111,890		118,860		114,343
	$	291,912	$	311,079	$	362,700

Provisions for income taxes

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



	Year Ended December 31,
	2012			2011			2010
Current tax expense (benefit):
Federal	$	53,187		$	62,858		$	79,551
State	(3,075		)	9,262			16,511
Foreign	21,138			24,452			32,883
	71,250			96,572			128,945
Deferred tax expense (benefit):
Federal	3,194			(5,185		)	(10,183		)
State	1,887			(993		)	(1,571		)
Foreign	(9,775		)	(1,967		)	(2,865		)
	(4,694		)	(8,145		)	(14,619		)
Total provision	$	66,556		$	88,427		$	114,326

Deferred tax assets (liabilities)

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



	December 31,
	2012			2011
Allowance for doubtful accounts	$	1,123		$	595
Accrued product warranties	3,099			2,964
Inventory basis differences	9,225			10,295
Accrued liabilities	7,206			9,499
Deferred revenue	2,205			2,568
Current net operating loss	8,085			844
Other	(1,025		)	(1,602		)
Foreign accrued liabilities	—			1,402
Foreign other	1,042			878
Net current deferred tax assets	$	30,960		$	27,443

Net operating loss carry-forwards	$	11,588		$	28,826
Credit carry-forwards	7,034			6,175
Domestic depreciation	(7,222		)	(8,682		)
Supplemental Executive Retirement Plan	7,491			7,684
Stock-based compensation	13,745			11,978
Intangibles	(15,999		)	(22,436		)
Deferred revenue	—			5,599
Accrued Liabilities	6,033			—
Other	4,018			7,561
Foreign credit carry-forwards	3,590			—
Foreign intangibles	(1,259		)	—
Foreign net operating loss carry-forwards	8,119			—
Foreign other	(78		)	—
Valuation allowance	(4,837		)	(5,062		)
Net long-term deferred tax assets	$	32,223		$	31,643

Foreign depreciation	$	3,196		$	3,431
Foreign intangibles	(12,522		)	(23,074		)
Foreign net operating loss carry-forwards	5,336			2,877
Foreign other	504			1,189
Valuation allowance	(4,510		)	(1,660		)
Long-term deferred tax liabilities	$	(7,996	)	$	(17,237	)

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,
	2012		2011		2010
Statutory federal tax rate	35.0	%	35.0	%	35.0	%
Increase (decrease) in rates resulting from:
Foreign rate differential	(10.4	)	(3.8	)	(1.9	)
Foreign, federal and state income tax credits	(2.7	)	(2.9	)	(1.5	)
State taxes	0.3		2.2		2.6
Non-deductible expenses	0.7		(1.2	)	(1.6	)
Other	(0.1	)	(0.9	)	(1.1	)
Effective tax rate	22.8	%	28.4	%	31.5	%

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,
	2012			2011			2010
Balance, beginning of year	$	29,200		$	30,949		$	8,297
Increases related to current year tax positions	7,220			1,225			2,339
Increases related to prior year tax positions	1,559			4,192			1,561
Decreases related to prior year tax positions	(343		)	(4,608		)	(11		)
Acquisitions	—			—			25,716
Lapse of statute of limitations	(1,887		)	(2,558		)	(6,953		)
Settlements	(606		)	—			—
Balance, end of year	$	35,143		$	29,200		$	30,949

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	2009 – 2011
State of California	2008 – 2011
State of Massachusetts	2009 – 2011
State of Oregon	2009 – 2011
Sweden	2007 – 2011
United Kingdom	2006 – 2011
Belgium	2011

- 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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