XML 68 R22.htm IDEA: XBRL DOCUMENT
v2.4.0.8

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2013
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES (Loss) income from continuing operations before income taxes consists of the following (in thousands):
| Year ended December 31,
| 2013 |  | 2012 |  | 2011
United States | $ | (31,521 | ) |  | $ | (27,068 | ) |  | $ | (14,164 | )
International | 8,369 |  |  | 9,373 |  |  | 15,531 |
(Loss) income from continuing operations before income taxes | $ | (23,152 | ) |  | $ | (17,695 | ) |  | $ | 1,367 |
The components of the benefit from income taxes consist of the following (in thousands):
| Year ended December 31,
| 2013 |  | 2012 |  | 2011
Current: |  |  |  |  |
Federal | $ | (38,243 | ) |  | $ | 857 |  |  | $ | (95 | )
State | 93 |  |  | 212 |  |  | 529 |
International | 1,988 |  |  | 1,193 |  |  | 1,222 |
Deferred: |  |  |  |  |
Federal | (10,543 | ) |  | (2,053 | ) |  | (3,618 | )
State | 3,023 |  |  | (1,362 | ) |  | (392 | )
International | (1,059 | ) |  | (353 | ) |  | 1,703 |
Total benefit from income taxes | $ | (44,741 | ) |  | $ | (1,506 | ) |  | $ | (651 | )
The differences between the (benefit from) provision for income taxes computed at the U.S. federal statutory rate at 35% and the Company’s actual (benefit from) provision for income taxes are as follows (in thousands):
| Year ended December 31,
| 2013 |  | 2012 |  | 2011
(Benefit from) provision for income taxes at U.S. Federal statutory rate | $ | (8,103 | ) |  | $ | (6,193 | ) |  | $ | 478 |
State taxes | 2,940 |  |  | (824 | ) |  | (1,034 | )
Differential in rates on foreign earnings | (1,396 | ) |  | (4,880 | ) |  | (9,565 | )
Losses for which no benefit is taken | 4,311 |  |  | 7,279 |  |  | 9,185 |
Change in valuation allowance | (996 | ) |  | (1,104 | ) |  | 1,822 |
Change in liabilities for uncertain tax positions | (35,742 | ) |  | 1,495 |  |  | (1,666 | )
Non-deductible stock-based compensation | 981 |  |  | 1,974 |  |  | 1,854 |
Research and development tax credits | (5,044 | ) |  | — |  |  | (2,006 | )
Non-deductible meals and entertainment | 346 |  |  | 208 |  |  | 213 |
Adjustments related to tax positions taken during prior years | (1,154 | ) |  | 619 |  |  | (255 | )
Tax-exempt investment income | (304 | ) |  | (248 | ) |  | (71 | )
Other | (580 | ) |  | 168 |  |  | 394 |
Total (benefit from) provision for income taxes | $ | (44,741 | ) |  | $ | (1,506 | ) |  | $ | (651 | )
The Company operates in multiple jurisdictions and its profits are taxed pursuant to the tax laws of these jurisdictions. Our effective income tax rate may be affected by changes in or interpretations of tax laws and tax agreements in any given jurisdiction, utilization of net operating loss and tax credit carry forwards, changes in geographical mix of income and expense, and changes in management's assessment of matters such as the ability to realize deferred tax assets. The benefit from income taxes for the year ended December 31, 2013 included a release of $39.0 million of tax reserves, including accrued interests and penalties, for our 2008 and 2009 tax years in the U.S., as a result of the expiration of the applicable statute of limitations for those tax years. On January 2, 2013, the enactment in the U.S. of the American Taxpayer Relief Act of 2013 extended retroactively through the end of calendar year 2013 the U.S federal research and development tax credit which had expired on December 31, 2011. As a result, the income tax benefit for the year ended December 31, 2013 included a $2.4 million tax benefit from the reinstatement of the 2012 U.S. federal research tax credit. The components of net deferred tax assets included in the Consolidated Balance Sheets are as follows (in thousands):
| December 31,
| 2013 |  | 2012
Deferred tax assets: |  |  |
Reserves and accruals | $ | 29,235 |  |  | $ | 31,999 |
Net operating loss carryovers | 27,253 |  |  | 27,522 |
Research and development credit carryovers | 18,391 |  |  | 13,704 |
Deferred stock-based compensation | 7,554 |  |  | 7,684 |
Other tax credits | 2,738 |  |  | 2,207 |
Gross deferred tax assets | 85,171 |  |  | 83,116 |
Valuation allowance | (38,644 | ) |  | (34,347 | )
Gross deferred tax assets after valuation allowance | 46,527 |  |  | 48,769 |
Deferred tax liabilities: |  |  |
Depreciation and amortization | (3,590 | ) |  | (5,485 | )
Intangibles | (6,227 | ) |  | (11,656 | )
Other | (738 | ) |  | (483 | )
Gross deferred tax liabilities | (10,555 | ) |  | (17,624 | )
Net deferred tax assets | $ | 35,972 |  |  | $ | 31,145 |
The following table summarizes the activity related to the Company's valuation allowance (in thousands):
| Year ended December 31,
| 2013 |  | 2012 |  | 2011
Balance at beginning of period | $ | 34,347 |  |  | $ | 28,354 |  |  | $ | 26,557 |
Additions | 6,364 |  |  | 5,993 |  |  | 1,797 |
Deductions | (2,067 | ) |  | — |  |  | — |
Balance at end of period | $ | 38,644 |  |  | $ | 34,347 |  |  | $ | 28,354 |
Management regularly assesses the ability to realize deferred tax assets recorded based upon the weight of available evidence, including such factors as recent earnings history and expected future taxable income on a jurisdiction by jurisdiction basis. In the event that the Company changes its determination as to the amount of realizable deferred tax assets, the Company will adjust its valuation allowance with a corresponding impact to the provision for income taxes in the period in which such determination is made. As of December 31, 2013, the Company had a valuation allowance of $38.6 million, which primarily relates to foreign net operating losses and a portion of its U.S. California tax credits. As of December 31, 2013, the Company had $96.4 million and $85.3 million of foreign and U.S. California state net operating loss carryforwards ("NOL"), respectively. There is no expiration to the utilization of the foreign NOL, while the U.S. California NOL will begin to expire at various dates beginning in 2014 through 2031, if not utilized. As of December 31, 2013, the U.S. California NOL included approximately $8.8 million relating to stock options tax deductions. These amounts are not included in the Company’s gross or net deferred tax assets pursuant to applicable accounting guidance and, if and when realized, through a reduction in income tax payable, will be accounted for as a credit to additional paid-in capital. As of December 31, 2013, the Company had U.S. federal and California state tax credit carryforwards of approximately $5.9 million and $29.8 million, respectively. If not utilized, the U.S. federal tax credit carryforwards will begin to expire in 2031, while the California tax credit forward will not expire. In addition, as of December 31, 2013, the Company had U.S. federal alternative minimum tax ("AMT") credit carryforward of approximately $2.7 million, which will not expire. The Company has not provided U.S. federal and California state income taxes, as well as foreign withholding taxes, on approximately $77.5 million of cumulative undistributed earnings for certain non-U.S. subsidiaries, because such earnings are intended to be indefinitely reinvested. Determination of the amount of unrecognized deferred tax liability for temporary differences related to investment in these non-U.S. subsidiaries that are essentially permanent in duration is not practicable. The Company applies the provisions of the applicable accounting guidance regarding accounting for uncertainty in income taxes, which requires application of a more-likely-than-not threshold to the recognition and derecognition of uncertain tax positions. If the recognition threshold is met, the applicable accounting guidance permits the recognition of a tax benefit measured at the largest amount of such tax benefit that, in our judgment, is more than fifty percent likely to be realized upon settlement. It further requires that a change in judgment related to the expected ultimate resolution of uncertain tax positions be recognized in earnings in the period in which such determination is made. The following table summarizes the activity related to the Company’s gross unrecognized tax benefits (in millions):
| Year ended December 31,
| 2013 |  | 2012 |  | 2011
Balance at beginning of period | 52.1 |  |  | 52.5 |  |  | 48.4 |
Increase in balance related to tax positions taken during current year | 5.4 |  |  | 0.6 |  |  | 6.6 |
Decrease in balance as a result of a lapse of the applicable statues of limitations | (1.3 | ) |  | (0.9 | ) |  | (2.1 | )
Decrease in balance due to settlement with tax authorities | (32.1 | ) |  | — |  |  | — |
Increase in balance related to tax positions taken during prior years | 0.1 |  |  | — |  |  | — |
Decrease in balance related to tax positions taken during prior years | — |  |  | (0.1 | ) |  | (0.4 | )
Balance at end of period | 24.2 |  |  | 52.1 |  |  | 52.5 |
The total amount of unrecognized tax benefits that would affect the effective tax rate is approximately $24.2 million at December 31, 2013. The Company recognizes interest and penalties related to unrecognized tax positions in income tax expenses. During the year ended December 31, 2013, the Company reversed approximately $5.6 million of interest and penalties previously accrued, primarily resulting from the expiration of the statute of limitations on the Company's 2008 and 2009 U.S. corporate income tax return in September 2013. During the years ended December 31, 2012 and 2011, the Company recognized approximately $1.9 million and $0.2 million, respectively, of interest and penalties in income tax expenses. As of December 31, 2013 and December 31, 2012, the Company had approximately $1.5 million and $7.1 million of accrued interest and penalties related to uncertain tax positions, respectively. The Company files U.S. federal, state, and foreign income tax returns in jurisdictions with varying statutes of limitations during which such tax returns may be audited and adjusted by the relevant tax authorities. The U.S. Internal Revenue Service has concluded its audit for the 2008 and 2009 tax years. In addition, the statute of limitations on the Company's 2008 and 2009 U.S. corporate income tax return expired in September 2013 and, as a result, in 2013, the Company released $39.0 million of tax reserves, including accrued interests and penalties, for those tax years. The 2010 through 2012 tax years generally remain subject to examination by U.S. federal and most state tax authorities. In significant foreign jurisdictions, the 2006 through 2012 tax years generally remain subject to examination by their respective tax authorities. In 2013, the Israeli tax authority concluded its audit of a subsidiary of the Company for the years 2007 through 2011, and a final settlement was made with the Israeli tax authority. The settlement did not have a material impact on the Company's overall tax expense, deferred tax assets realization, effective tax rate, operating results or cash flow. The Company will continue to review its tax positions and provide for, or reverse, unrecognized tax benefits as issues arise. As of December 31, 2013, the Company anticipates that the balance of gross unrecognized tax benefits will decrease up to approximately $10 million due to expiration of the applicable statutes of limitations over the next 12 months. The Company's operations in Switzerland is subject to a reduced tax rate under the Switzerland tax holiday which requires various thresholds of investment and employment in Switzerland. The Company has met these various thresholds and the Switzerland tax holiday is effective through the end of 2018. The income tax benefits attributable to the Switzerland holiday were estimated to be approximately $1.5 million, $1.1 million and $0.7 million in 2013, 2012 and 2011, respectively, increasing diluted earnings per share by approximately $0.014, $0.009 and $0.006 in 2013, 2012 and 2011, respectively.

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