XML 26 R11.htm IDEA: XBRL DOCUMENT  v2.3.0.11
Provision For Income Taxes
 6 Months Ended
Jun. 30, 2011
Provision For Income Taxes  
Provision For Income Taxes

Note 6 – Provision for income taxes:

 

     Six months ended
June 30,		  
     2010     2011  
     (In thousands)  

Expected tax expense, at the U.S. federal statutory income tax rate of 35%

    $ 1,525      $ 4,115   

Non–U.S. tax rates

      (185 )      (876 ) 

Incremental U.S. tax on earnings of non-U.S. subsidiaries

      2,328        2,742   

State income taxes and other, net

      (69 )      154   
                

Total income tax expense

    $ 3,599      $ 6,135   
                

In the first quarter of 2011, we recognized a $2.1 million provision for deferred income taxes related to the undistributed earnings of our Canadian subsidiary attributable to the $7.5 million patent litigation settlement gain discussed in Note 10.

Under GAAP, we are required to recognize a deferred income tax liability with respect to the incremental U.S. (federal and state) and foreign withholding taxes that would be incurred when undistributed earnings of a foreign subsidiary are subsequently repatriated, unless management has determined that those undistributed earnings are permanently reinvested for the foreseeable future. Prior to March 31, 2010, we had not recognized a deferred income tax liability related to incremental income taxes on the pre-2005 undistributed earnings of our Taiwanese subsidiary, as those earnings were deemed to be permanently reinvested. We are required to reassess the permanent reinvestment conclusion on an ongoing basis to determine if our intentions have changed. At the end of March 2010, and based primarily upon changes in our cash management plans, we determined that all of the undistributed earnings of our Taiwanese subsidiary can no longer be considered to be permanently reinvested in Taiwan. Accordingly, in the first quarter of 2010 we recognized an aggregate $1.9 million provision for deferred income taxes on the pre-2005 undistributed earnings of our Taiwanese subsidiary. Consequently, all of the undistributed earnings of our non-U.S. operations are now considered to be not permanently reinvested.