Income Taxes (Tables)

12 Months Ended

Sep. 30, 2012

The provision for income taxes was as follows during fiscal 2012, 2011, and 2010:


	2012			2011			2010
	(In thousands)
Current:
Federal	$	42,502		$	22,019		$	10,190
State		4,899			2,873			4,406
Foreign		3,959			(251	)		6,490

		51,360			24,641			21,086

Deferred:
Federal		(6,843	)		59			7,761
State		(925	)		(112	)		(644	)
Foreign		647			1,305			(356	)

		(7,121	)		1,252			6,761

Total provision	$	44,239		$	25,893		$	27,847

Deferred Tax Assets and Liabilities

Deferred tax assets and liabilities at September 30, 2012 and 2011 were as follows:


	2012			2011
	(In thousands)
Deferred tax assets:
Net operating loss carryforward	$	22,120		$	9,373
Research credit carryforward		2,310			1,388
Capital loss carryforward		91			21
Investments		1,141			1,235
Accrued compensation		1,297			1,586
Share-based compensation		20,109			24,489
Deferred revenue		3,577			1,042
Accrued lease costs		1,774			2,526
Property and equipment		3,629			4,239
Other		14,183			5,988

		70,231			51,887
Less valuation allowance		(5,425	)		(3,422	)

		64,806			48,465

Deferred tax liabilities:
Intangible assets		(31,364	)		(20,541	)
Prepaid expense		(3,405	)		(3,942	)
Other		(1,019	)		(1,040	)

		(35,788	)		(25,523	)

Deferred tax assets, net	$	29,018		$	22,942

Reconciliation Between Federal Statutory Income Tax Rate and Effective Tax Rate

The reconciliation between the U.S. federal statutory income tax rate of 35% and our effective tax rate is shown below for fiscal 2012, 2011 and 2010:


	2012			2011			2010
	(In thousands)
Income tax provision at U.S. federal statutory rate	$	47,685		$	34,117		$	32,306
State income taxes, net of U.S. federal benefit		3,663			2,770			2,452
Foreign taxes		(3,616	)		(9,867	)		(4,721	)
Intercompany dividend		2,692			3,822			—
Research credits		(375	)		(2,559	)		(353	)
Domestic production deduction		(3,054	)		(2,494	)		(1,204	)
Tax audit settlements		(1,203	)		1,524			308
Other		(1,553	)		(1,420	)		(941	)

Recorded income tax provision	$	44,239		$	25,893		$	27,847

Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:


	2012			2011			2010
	(in thousands)
Gross unrecognized tax benefits upon adoption on October 1	$	9,539		$	12,286		$	18,587
Gross increases for tax positions in prior periods		64			547			—
Gross decreases for tax positions in prior periods		(2,035	)		—			(7,025	)
Gross increases based on tax positions related to the current year		681			1,000			724
Decreases for settlements and payments		(748	)		(4,294	)		—

Gross unrecognized tax benefits at September 30	$	7,501		$	9,539		$	12,286

- 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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