INCOME TAXES (Tables)

12 Months Ended

Mar. 31, 2014

Income Tax Disclosure [Abstract]

Income before Income Tax Expense

Income before income tax expense consisted of the following (in thousands):

	Year Ended March 31,
	2014			2013			2012
Domestic	$	80,515		$	66,735		$	49,525
Foreign	(2,659		)	(2,999		)	1,393
	$	77,856		$	63,736		$	50,918

Components of Income Tax Expense

The components of the income tax expense are as follows (in thousands):

	Year Ended March 31,
	2014			2013			2012
Current income tax expense:
Federal	$	20,123		$	15,826		$	10,585
State	2,260			2,266			1,421
Foreign	1,174			1,035			1,032
	23,557			19,127			13,038
Deferred income tax expense (benefit):
Federal	5,347			5,161			5,603
State	96			320			44
Foreign	(250		)	(1,481		)	(195		)
	5,193			4,000			5,452
	$	28,750		$	23,127		$	18,490

Federal Statutory Income Tax Rate

The income tax expense computed using the federal statutory income tax rate differs from NetScout’s effective tax rate primarily due to the following:

	Year Ended March 31,
	2014		2013		2012
Statutory U.S. federal tax rate	35.0	%	35.0	%	35.0	%
State taxes, net of federal tax effect	2.8		3.6		3.2
Research and development tax credits	(1.9	)	(2.1	)	(2.1	)
Tax rate differential of foreign operations	0.2		0.7		0.1
Domestic production activities deduction	(2.7	)	(2.9	)	(2.4	)
Change in valuation allowance	2.0		0.4		0.4
Transaction costs	—		0.7		1.5
Other	1.5		0.9		0.6
	36.9	%	36.3	%	36.3	%

Components of Net Deferred Tax Assets

The components of net deferred tax assets are as follows (in thousands):

	Year Ended March 31,
	2014			2013
Assets:
Accrued expenses	$	3,954		$	5,290
Depreciation	140			—
Deferred revenue	8,873			6,752
Reserves	1,006			1,325
Net operating loss carryforwards	23,730			26,096
Tax credit carryforwards	3,628			2,284
Share-based compensation	2,125			1,550
Other	233			352
	43,689			43,649
Liabilities:
Intangible assets	(25,659		)	(21,934		)
Valuation allowance	(4,941		)	(3,795		)
Depreciation	—			(113		)
	$	13,089		$	17,807

Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits for the fiscal years ended March 31, 2014, 2013 and 2012 is as follows (in thousands):

	Year Ended March 31,
	2014		2013		2012
Balance at April 1,	$	370	$	335	$	383
Additions based on tax positions related to the current year	51		35		34
Decrease relating to settlements with taxing authorities	—		—		(82		)
Balance at March 31,	$	421	$	370	$	335