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Income Taxes | 12 Months Ended
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Dec. 31, 2014
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The following is a geographical breakdown of income before the provision for income taxes:
| Year Ended
| December 31, 2014 |  | December 31, 2013 |  | December 31, 2012
| (In thousands)
Domestic | $ | 48,327 |  |  | $ | 34,678 |  |  | $ | 25,794 |
Foreign | 177 |  |  | 351 |  |  | 1,281 |
Income before provision for income taxes | $ | 48,504 |  |  | $ | 35,029 |  |  | $ | 27,075 |
The provision for income taxes consists of the following:
| Year Ended
| December 31, 2014 |  | December 31, 2013 |  | December 31, 2012
| (In thousands)
Current: |  |  |  |  |
Federal | $ | 14,063 |  |  | $ | 8,218 |  |  | $ | 7,181 |
State | 2,274 |  |  | 1,621 |  |  | 1,006 |
Foreign | 192 |  |  | 447 |  |  | 154 |
Total current income taxes | 16,529 |  |  | 10,286 |  |  | 8,341 |
Deferred: |  |  |  |  |
Federal | 1,603 |  |  | 1,287 |  |  | 2,169 |
State | 84 |  |  | (263 | ) |  | 651 |
Foreign | (230 | ) |  | (260 | ) |  | (264 | )
Total deferred income taxes | 1,457 |  |  | 764 |  |  | 2,556 |
Total provision for income taxes | $ | 17,986 |  |  | $ | 11,050 |  |  | $ | 10,897 |
The provision for income taxes differs from the amount computed by applying the statutory federal tax rate as follows:
| Year Ended
| December 31, 2014 |  | December 31, 2013 |  | December 31, 2012
| (In thousands)
U.S. federal tax provision at statutory rate | $ | 16,998 |  |  | $ | 12,260 |  |  | $ | 9,476 |
State taxes | 1,533 |  |  | 883 |  |  | 1,077 |
Non-deductible expenses | 809 |  |  | 297 |  |  | 530 |
Acquisition costs | 229 |  |  | — |  |  | 431 |
Share-based compensation expense | 461 |  |  | 407 |  |  | 403 |
Research tax credits | (818 | ) |  | (1,430 | ) |  | — |
Domestic production deduction | (1,127 | ) |  | (816 | ) |  | (601 | )
Other | (99 | ) |  | (551 | ) |  | (419 | )
Total provision for income taxes | $ | 17,986 |  |  | $ | 11,050 |  |  | $ | 10,897 |
Significant components of our deferred tax assets (liabilities) are as follows:
| December 31, 2014 |  | December 31, 2013
| (In thousands)
Deferred tax assets (liabilities): |  |  |
Deferred revenue | $ | 12,639 |  |  | $ | 11,074 |
Stock compensation | 6,287 |  |  | 7,447 |
Inventory related items | 2,713 |  |  | 2,947 |
Tax credit carry forwards | 2,168 |  |  | 3,160 |
Reserves and accruals | 327 |  |  | — |
Loss carry forwards | 12 |  |  | 64 |
Other, net | — |  |  | 5 |
Subtotal | 24,146 |  |  | 24,697 |
Less: valuation allowance | — |  |  | (39 | )
Total net deferred tax assets | 24,146 |  |  | 24,658 |
Intangibles | (26,485 | ) |  | (26,604 | )
Depreciation and amortization | (14,331 | ) |  | (12,077 | )
Reserves and accruals | — |  |  | (353 | )
Other, net | (194 | ) |  | — |
Total deferred tax liabilities | (41,010 | ) |  | (39,034 | )
Net deferred tax liabilities | $ | (16,864 | ) |  | $ | (14,376 | )
Deferred income tax assets (liabilities) are provided for temporary differences that will result in future tax deductions or future taxable income, as well as the future benefit of tax credit carry forwards. We recognize deferred tax assets to the extent that we believe these assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing temporary differences, projected future taxable income, tax planning strategies, and results of recent operations. On the basis of this evaluation, as of December 31, 2014, no valuation allowances have been recorded in any jurisdiction. As of December 31, 2014, we have an immaterial amount of state net operating loss carryforwards available for income tax purposes. For income tax purposes, we have California research tax credits carryforwards of $7.9 million. Federal research tax credit carryforwards from prior years have been utilized or have expired. California credits are available indefinitely to reduce cash taxes otherwise payable. Pursuant to the requirements of ASC 718, we do not include unrealized stock option attributes as components of our gross deferred tax assets. The tax-effected amounts of gross unrealized net operating loss and business tax credit carryforwards excluded under ASC 718 for the year ended December 31, 2014 are immaterial. In general, it is the practice and intention to reinvest the earnings of our non-U.S. subsidiaries in those operations. As of December 31, 2014, we have not made a provision for U.S. federal income and state income taxes on accumulated and current earnings of $0.8 million related to our foreign subsidiaries because these earnings are intended to be indefinitely reinvested in operations outside the United States. If we expect to distribute those earnings in the form of dividends or otherwise, we would be subject to U.S. and state income taxes reported as a component of income tax expense, in the amount of $0.3 million. This amount may be reduced by any foreign tax credits available at the time of repatriation. We file income tax returns in the United States and various states and foreign jurisdictions. In the normal course of business, we are subject to examination by taxing authorities, including major jurisdiction as the United States, California and United Kingdom and Germany. In 2012, we concluded audits by IRS and California Franchise Tax Board for years 2008 and 2009. However, all of the net operating loss and research credit carryforwards that may be used in future years are subject to adjustment, if and when utilized. As such our federal and California tax years remain open from 1996 and 1992, respectively. In late 2014, we were contacted by the IRS for a limited scope audit for tax years 2011 and 2012. At this time, we do not believe results of this audit will have a material impact on our financial statements. The aggregate change in the balance of gross unrecognized tax benefits, which excludes interest and penalties, is as follows:
| (In thousands)
Year Ended December 31, 2011 | $ | 5,796 |
Increases related to tax positions taken during a prior period | 43 |
Increases related to tax positions related to MTS | 1,066 |
Decreases related to tax positions taken during the prior period | — |
Increases related to tax positions taken during the current period | 422 |
Decreases related to settlements | (33 | )
Decreases related to expiration of statute of limitations | (379 | )
Year Ended December 31, 2012 | $ | 6,915 |
Increases related to tax positions taken during a prior period | 406 |
Decreases related to tax positions taken during the prior period | (79 | )
Increases related to tax positions taken during the current period | 764 |
Decreases related to settlements | — |
Decreases related to expiration of statute of limitations | (32 | )
Year Ended December 31, 2013 | $ | 7,974 |
Increases related to tax positions taken during a prior period | 63 |
Decreases related to tax positions taken during the prior period | (89 | )
Increases related to tax positions taken during the current period | 801 |
Decreases related to settlements | — |
Decreases related to expiration of statute of limitations | (264 | )
Year Ended December 31, 2014 | $ | 8,485 |
As of December 31, 2014, the total amount of gross unrecognized tax benefits, if realized, would affect our tax expense by approximately $7.3 million. We recognize interest and/or penalties related to uncertain tax positions in operating expenses, which for 2014 was immaterial. We do not believe there will be any material changes in our unrecognized tax positions over the next twelve months.

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- 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
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