Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Components of Income Before Income Taxes

For financial reporting purposes, income before income taxes includes the following components (in thousands):

	Years Ended December 31,
	2012			2011		2010
United States	$	(4,192	)	$	47,099	$	44,400
Foreign		69,460			17,214		4,302
Total	$	65,268		$	64,313	$	48,702

Income Tax Expense (Benefit)

The expense (benefit) for income taxes consists of the following (in thousands):

	Years Ended December 31,
	2012			2011		2010
Federal
Current	$	1,236		$	4,150	$	1,812
Deferred		56			6,456		12,352
Total		1,292			10,606		14,164
State
Current		1,150			1,649		1,685
Deferred		(142	)		621		(725	)
Total		1,008			2,270		960
Foreign
Current		9,258			5,149		6,366
Deferred		4,864			436		17
Total		14,122			5,585		6,383
Total	$	16,422		$	18,461	$	21,507

Summary of Differences Between Income Tax Expense Computed at Statutory Federal Income Tax Rate and Per Consolidated Statements of Income

Differences between the income tax expense computed at the statutory federal income tax rate and per the consolidated statements of income are summarized as follows (in thousands):

	Years Ended December 31,
	2012			2011			2010
Tax expense at federal rate of 35%	$	22,844		$	22,510		$	17,045
State income taxes, net of federal benefit		655			1,475			695
Change in valuation allowance		(2,680	)		251			(1,587	)
Foreign tax rate differential		(8,940	)		(1,572	)		1,304
Unrecognized tax benefit increase (decrease)		(1,665	)		(1,882	)		328
Effect of intellectual property transfer		—			(2,100	)		2,200
Tax effect of foreign operations		5,311			373			919
Acquisition Costs		2,659			—			—
Tax benefit of R&D costs		(1,749	)		—			—
Other		(13	)		(594	)		603
Income tax provision	$	16,422		$	18,461		$	21,507

 

Deferred Tax Assets and Liabilities Result from Differences in Timing of Recognition of Certain Income and Expense Items for Tax and Financial Accounting Purposes

The sources of these differences at each balance sheet date are as follows (in thousands):

	December 31,
	2012			2011
Deferred income tax assets:
Net operating loss carryforwards	$	99,021		$	5,382
Foreign tax credits		19,359			1,909
Compensation		20,668			19,466
Deferred revenue		13,281			13,128
Tax basis in investments		17,723			3,367
Deferred acquisition costs		88			2,480
Deferred alliance costs		—			8,287
Other		8,356			2,211
Gross deferred income tax assets		178,496			56,230
Less: valuation allowance		(37,941	)		(8,135	)
Net deferred income tax assets	$	140,555		$	48,095
Deferred income tax liabilities:
Depreciation and amortization	$	(57,957	)	$	(8,685	)
Total deferred income tax liabilities		(57,957	)		(8,685	)
Net deferred income taxes	$	82,598		$	39,410
Deferred income taxes / liabilities included in the balance sheet are:
Deferred income tax asset - current	$	34,342		$	25,944
Deferred income tax asset - noncurrent		63,370			13,466
Deferred income tax liability - current		(174	)		—
Deferred income tax liability - noncurrent		(14,940	)		—
Net deferred income taxes	$	82,598		$	39,410

Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31 is as follows (in thousands):

	2012			2011			2010
Balance of unrecognized tax benefits at beginning of year	$	4,012		$	8,414		$	10,916
Increases for tax positions of prior years		10,729			—			398
Decreases for tax positions of prior years		(4	)		(310	)		—
Increases for tax positions established for the current period		49			750			421
Decreases for settlements with taxing authorities		(27	)		(36	)		(3,000	)
Reductions resulting from lapse of applicable statute of limitation		(1,697	)		(4,678	)		(308	)
Adjustment resulting from foreign currency translation		17			(128	)		(13	)
Balance of unrecognized tax benefits at end of year	$	13,079		$	4,012		$	8,414