Income Taxes (Tables)

12 Months Ended

Jun. 30, 2014

Schedule of Income Tax Expense (Benefit)

Income tax expense consists of the following:


	Year ended June 30,
(In thousands)	2014			2013			2012
Current:
Federal	$	97,442		$	80,333		$	67,492
State		3,541			6,021			4,647

Total Current		100,983			86,354			72,139

Deferred:
Federal		(666	)		660			(2,192	)
State		746			(431	)		2,326
Foreign		(2,865	)		(2,051	)		(1,735	)
Change in valuation allowance		3,442			1,605			1,851

Total Deferred		657			(217	)		250

Total income tax expense	$	101,640		$	86,137		$	72,389

Schedule of Income (Loss) Before Income Taxes

Income (loss) before income taxes consists of the following:


	Year ended June 30,
(In thousands)	2014			2013			2012
United States	$	292,081		$	243,556		$	189,702
Foreign		(14,216	)		(10,280	)		(5,162	)

		277,865			233,276			184,540

Schedule of Differences Between Statutory Federal Income Tax Rate and Income Taxes Reported in Consolidated Statements of Operations

The differences between income taxes at the statutory federal income tax rate and income taxes reported in the consolidated statements of comprehensive income were as follows:


	Year ended June 30,
	2014			2013			2012
Federal income tax expense at the statutory rate		35.0	%		35.0	%		35.0	%
State income taxes, net of federal benefit		1.6			1.7			2.7
Research and development credits, net of the federal tax on state credits		(0.2	)		(1.0	)		(1.3	)
Uncertain tax positions, net of federal benefit on state positions		(0.1	)		0.2			0.2
Incentive stock option and employee stock purchase plan expense		(0.3	)		(0.5	)		1.0
Change in valuation allowance		1.2			0.7			1.0
Basis difference, disposition of foreign subsidiary		(1.9	)		0.0			0.0
Other, net		1.3			0.8			0.6

		36.6	%		36.9	%		39.2	%

Schedule of Components of Deferred Tax Assets and Liabilities

The significant components of the Company’s deferred tax assets and liabilities were comprised of the following at June 30, 2014 and 2013:


	Year ended June 30,
(In thousands)	2014			2013
Deferred tax assets:
Net operating loss carryforwards	$	76,986		$	8,336
Property, plant and equipment		2,947			3,103
Accrued vacation		1,551			1,269
Allowance for doubtful accounts		3,285			2,771
Stock compensation expense		25,952			21,135
Capital loss carryover		0			1,424
Research and development credits		11,207			5,367
Uncertain state tax positions		555			1,247
Other, net		312			643

Total gross deferred tax assets		122,795			45,295
Less valuation allowance		(41,420	)		(8,218	)

Total deferred tax assets		81,375			37,077

Deferred tax liabilities:
Intangible assets		71,750			438

Total deferred tax liabilities		71,750			438

Net deferred tax assets		9,625			36,639

Current net deferred tax asset		6,386			8,007
Long term net deferred tax asset		3,239			28,632

Net deferred tax asset	$	9,625		$	36,639

Summary of Net Operating Loss and Research Credit Carryforwards

At June 30, 2014, the Company had the following net operating loss and research credit carryforwards, with their respective expiration periods. Certain carryforwards are subject to the limitations of Section 382 and 383 of the Internal Revenue Code as indicated.


(In thousands)	Amount		Subject to sections 382, 383		Expires beginning in year		through
Carryforwards
Federal net operating loss	$	164,504		Yes		2027		2033
Utah net operating loss		229,900		No		2015		2024
California net operating loss		155,834		Yes		2016		2033
Oklahoma net operating loss		14,142		Yes		2023		2033
Foreign net operating losses (various jurisdictions)		27,183		No		Various		Various
Federal research credit		3,250		Yes		2025		2032
Utah research credit		8,296		No		2021		2028
California research credit		2,565		Yes		n/a		n/a

Schedule of Reconciliation of Beginning and Ending Unrecognized Tax Benefits

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


	Year ended June 30,
(In thousands)	2014			2013		2012
Unrecognized tax benefits at the beginning of year	$	10,918		$	10,208	$	9,648
Gross increases—current year tax positions		1,785			710		560
Gross increases—prior year tax positions		350			—		—
Gross increases—acquisitions		14,180
Gross decreases—prior year tax positions		(2,995	)

Unrecognized tax benefits at end of year	$	24,238		$	10,918	$	10,208

Interest and penalties in year-end balance	$	620		$	270	$	—

Crescendo Biosciences, Inc.

Schedule of Components of Deferred Tax Assets and Liabilities

The components of deferred tax assets, deferred tax liabilities, and the liability for unrecognized tax benefits that were included in the allocation of Crescendo’s purchase consideration are as follows:


(In thousands)
Deferred tax assets:
Net operating loss carryforwards	$	70,048
Research and development credits		5,815
Other, net		312

Total gross deferred tax assets		76,175
Less valuation allowance		(29,760	)

Total deferred tax assets		46,415

Deferred tax liabilities:
Intangible assets		72,005
Stock compensation expense		4,443

Total deferred tax liabilities		76,448

Net deferred tax liability		30,033

Liability for unrecognized tax benefits	$	14,180