XML 63 R18.htm IDEA: XBRL DOCUMENT
v2.4.0.8

INCOME TAXES | 12 Months Ended
--- | ---
Jun. 30, 2014
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES For financial reporting purposes, the components of income before provision for income taxes were as follows (in thousands):
|  | Years Ended June 30,
|  | 2014 |  | 2013 |  | 2012
Domestic |  | $ | 44,551 |  |  | $ | 17,860 |  |  | $ | 41,490 |
Foreign |  | 150,060 |  |  | 73,893 |  |  | 82,533 |
|  | $ | 194,611 |  |  | $ | 91,753 |  |  | $ | 124,023 |
The components of the Company’s provision for income taxes consisted of the following (in thousands):
|  | Years Ended June 30,
|  | 2014 |  | 2013 |  | 2012
Current |  |  |  |  |  |
Foreign |  | $ | 2,451 |  |  | $ | 1,790 |  |  | $ | 2,040 |
Federal |  | 16,516 |  |  | 8,515 |  |  | 17,437 |
State |  | 109 |  |  | 581 |  |  | 2,854 |
Current tax expense |  | 19,076 |  |  | 10,886 |  |  | 22,331 |
Deferred |  |  |  |  |  |
Foreign |  | — |  |  | — |  |  | — |
Federal |  | (1,507 | ) |  | (130 | ) |  | (217 | )
State |  | 105 |  |  | 507 |  |  | (680 | )
Deferred tax expense |  | (1,402 | ) |  | 377 |  |  | (897 | )
Provision for income taxes |  | $ | 17,674 |  |  | $ | 11,263 |  |  | $ | 21,434 |
Significant components of the Company’s deferred tax assets and liabilities consisted of the following (in thousands):
|  | June 30,
|  | 2014 |  | 2013
Deferred tax assets |  |  |  |
Allowance for doubtful accounts |  | $ | 200 |  |  | $ | 337 |
Stock-based compensation |  | 1,038 |  |  | 833 |
Accrued expenses |  | 455 |  |  | 191 |
Research and development credits |  | 345 |  |  | — |
State tax |  | 570 |  |  | — |
Other |  | 353 |  |  | 323 |
Total deferred tax assets |  | 2,961 |  |  | 1,684 |
Deferred tax liabilities |  |  |  |
Basis difference for fixed assets |  | (477 | ) |  | (829 | )
Other |  | — |  |  | (118 | )
Total deferred tax liabilities |  | (477 | ) |  | (947 | )
Valuation allowance |  | (345 | ) |  | — |
Net deferred tax assets |  | $ | 2,139 |  |  | $ | 737 |
As of June 30, 2014, the Company had California research tax credit carry-forwards, net of ASC 740-10 unrecognized tax benefits, of approximately $1.1 million. The California research credits can be carried forward indefinitely. Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. In the fourth quarter of fiscal 2014, the Company determined that it is more likely than not that our deferred tax asset for California research credits will not be realized as for the foreseeable future the Company is expecting to generate credits in excess of its ability to use such attributes. As a result, the Company established a valuation allowance of $345,000 for the amount of California deferred tax assets that may not be realized as of June 30, 2014. As a result of certain realization requirements of ASC 718, Compensation - Stock Compensation, the table of deferred tax assets and liabilities shown above does not include certain deferred tax assets as of June 30, 2014, that arose directly from (or the use of which was postponed by) tax deductions related to equity compensation that are greater than the compensation recognized for financial reporting. Equity will be increased by approximately $541,000 if and when such deferred tax assets are ultimately realized. The Company uses ASC 740 ordering when determining when excess tax benefits have been realized. The effective tax rate differs from the applicable U.S. statutory federal income tax rate as follows:
|  | Years Ended June 30,
|  | 2014 |  | 2013 |  | 2012
Statutory rate |  | 35.0 | % |  | 35.0 | % |  | 35.0 | %
Stock-based compensation |  | 0.4 |  |  | 0.8 |  |  | — |
State tax expense |  | — |  |  | 0.7 |  |  | 1.0 |
Tax rate differential, foreign income |  | (25.3 | ) |  | (24.2 | ) |  | (23.0 | )
Federal research and development credits |  | (0.3 | ) |  | (0.4 | ) |  | — |
Other permanent items |  | (0.7 | ) |  | 0.4 |  |  | 4.3 |
Effective tax rate |  | 9.1 | % |  | 12.3 | % |  | 17.3 | %
The Company had increased foreign operations in fiscal 2014 as compared to fiscal 2013 and in fiscal 2013 as compared to fiscal 2012, which resulted in the generation more income on a comparative year over year basis in foreign jurisdictions that have lower tax rates than the U.S. It is the practice and intention of the Company to reinvest the earnings of its non-U.S. subsidiaries in those operations. As of June 30, 2014, the Company has not made a provision for U.S. or additional foreign withholding taxes on approximately $347.0 million of the excess of the amount for financial reporting over the tax basis of investments in foreign subsidiaries that are essentially permanent in duration. Generally, such amounts become subject to U.S. taxation upon the remittance of dividends and under certain other circumstances. It is not practicable to estimate the amount of deferred tax liability related to investments in these foreign subsidiaries. While management believes that the Company has adequately provided for all tax positions, amounts asserted by tax authorities could be greater or less than the recorded position. Accordingly, the Company's provisions on federal, state and foreign tax-related matters to be recorded in the future may change as revised estimates are made or the underlying matters are settled or otherwise resolved. A reconciliation of the beginning and ending balances of the unrecognized tax benefits during the years ended June 30, 2014 2013 and 2012 consists of the following (in thousands):
|  | Years Ended June 30,
|  | 2014 |  | 2013 |  | 2012
|  | (In thousands)
Unrecognized benefit—beginning of period |  | $ | 11,455 |  |  | $ | 7,825 |  |  | $ | 2,020 |
Gross increases—current year tax positions |  | 3,871 |  |  | 3,806 |  |  | 4,697 |
Gross increases (decreases)—prior year tax positions |  | (213 | ) |  | (176 | ) |  | 1,108 |
Gross Decreases - prior year tax positions due to statue lapse |  | $ | (199 | ) |  |  |  |
Unrecognized benefit—end of period |  | $ | 14,914 |  |  | $ | 11,455 |  |  | $ | 7,825 |
Included in the gross unrecognized tax benefits balance as of June 30, 2014 are $14.5 million of tax positions which would affect income tax expense if recognized. The Company recognizes interest and penalties related to unrecognized tax benefits within the income tax expense line in the accompanying Consolidated Statement of Operations and Comprehensive Income. Accrued interest and penalties are included within the related tax liability line in the Consolidated Balance Sheet. As of June 30, 2014, the Company had $695,000 accrued interest related to uncertain tax matters. The Company does not expect its unrecognized tax benefits as of June 30, 2014 will materially change within the next 12 months. The Company files income tax returns in the United States, various states and certain foreign jurisdictions. Tax years 2011 through 2014 are subject to examination by the U.S. federal tax authorities. Tax years 2010 through 2014 are subject to examination by the state tax authorities. Tax year 2014 is subject to examination by the foreign tax authorities. There are no income tax examinations currently in process.

X
- Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration