Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Components of net income before income taxes

Income Tax Provision/(Benefit). The components of net income from continuing operations before income taxes are as follows (in thousands):

	2013			2012			2011
Domestic	$	63,278		$	103,917		$	89,791
Foreign		(1,759	)		(26,693	)		(13,819	)
Total	$	61,519		$	77,224		$	75,972

Schedule of Components of Income Tax Expense (Benefit)

The income tax provision related to continuing operations consists of the following (in thousands):

	2013			2012			2011
Current:
Federal	$	7,260		$	32,121		$	25,096
State		453			4,133			111
Foreign		4,273			2,658			3,554
		11,986			38,912			28,761
Deferred:
Federal		1,130			(832	)		3,190
State		2,329			(3,977	)		384
Foreign		(5,277	)		(5,758	)		1,355
		(1,818	)		(10,567	)		4,929
Total income tax provision	$	10,168		$	28,345		$	33,690

Schedule of Effective Income Tax Rate Reconciliation

The difference between our income tax provision computed at the statutory Federal income tax rate and our financial statement income tax related to continuing operations is summarized as follows (in thousands):

	2013			2012			2011
Provision at Federal rate of 35%	$	21,532		$	27,028		$	26,590
State income taxes, net of Federal impact		1,808			101			322
Research and experimentation credits		(16,683	)		(3,651	)		(3,036	)
Tax uncertainties		4,878			1,333			—
Section 199 manufacturing deduction		(2,263	)		(4,246	)		(972	)
Foreign rate differential		1,133			3,108			3,564
Valuation allowance for deferred tax assets		(3,312	)		3,550			3,395
Other impact of foreign operations		2,088			672			3,470
Other		987			450			357
Total income tax provision	$	10,168		$	28,345		$	33,690

Net deferred income tax liabilities

Deferred Income Taxes. Net deferred income tax liabilities as of December 31, 2013 and 2012 are as follows (in thousands):

	2013			2012
Deferred income tax assets	$	68,829		$	90,374
Deferred income tax liabilities		(48,830	)		(64,320	)
Valuation allowance		(17,741	)		(22,888	)
Net deferred income tax liabilities	$	2,258		$	3,166

The components of net deferred income tax assets (liabilities)

The components of our net deferred income tax assets (liabilities) as of December 31, 2013 and 2012 are as follows (in thousands):

	2013			2012
Net current deferred income tax assets:
Accrued expenses and reserves	$	12,429		$	19,322
Stock-based compensation		3,929			4,354
Total current deferred income tax assets		16,358			23,676
Less: valuation allowance		(1,273	)		(1,432	)
Net current deferred income tax assets	$	15,085		$	22,244
Net non-current deferred income tax assets:
Client contracts and related intangibles	$	(952	)	$	(8,229	)
NOL carryforwards		11,505			15,482
Property and equipment		4,097			12,999
Deferred revenue		1,209			1,700
Facility abandonment		189			606
Other		678			44
Total non-current deferred income tax assets		16,726			22,602
Less: valuation allowance		(9,279	)		(20,006	)
Net non-current deferred income tax assets	$	7,447		$	2,596
Net non-current deferred income tax liabilities:
Purchased R&D	$	-		$	222
Software		88			269
Client contracts and related intangibles		(4,104	)		393
Goodwill		(3,846	)		(4,207	)
NOL carryforwards		27,500			25,276
Property and equipment		(4,812	)		(13,609	)
Convertible debt securities		(35,116	)		(37,415	)
Deferred revenue		4,470			4,858
Contingent payments		836			836
Facility abandonment		1,892			1,413
Other		7			1,740
Total non-current deferred income tax liabilities		(13,085	)		(20,224	)
Less: valuation allowance		(7,189	)		(1,450	)
Net non-current deferred income tax liabilities	$	(20,274	)	$	(21,674	)

A reconciliation of the beginning and ending balances of our liability for unrecognized tax benefits

A reconciliation of the beginning and ending balances of our liability for unrecognized tax benefits is as follows (in thousands):

	2013			2012			2011
Balance, beginning of year	$	4,029		$	4,114		$	954
Additions based on tax positions related to current year		1,292			276			—
Additions for tax positions of prior years		4,597			933			3,249
Reductions for tax positions of prior years		(401	)		(764	)		(89	)
Lapse of statute of limitations		-			(530	)		—
Balance, end of year	$	9,517		$	4,029		$	4,114