Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Income Before The Provision for Income Taxes

Income before the provision for income taxes is attributable to the following jurisdictions (in thousands) for years ended December 31:

	2012		2011		2010
United States	$	186,301	$	144,928	$	92,979
Foreign		124,489		65,949		58,301
Total	$	310,790	$	210,877	$	151,280

Components of Income Taxes

The provision (benefit) for income taxes for the years ended December 31 consists of the following (in thousands):

	2012			2011			2010
Current:
Federal	$	62,886		$	45,817		$	31,337
State		4,551			2,578			2,545
Foreign		29,551			17,375			13,496
Total current		96,988			65,770			47,378
Deferred:
Federal		2,295			1,538			(1,308	)
State		417			132			(93	)
Foreign		(5,109	)		(3,898	)		(2,593	)
Total deferred		(2,397	)		(2,228	)		(3,994	)
Total provision	$	94,591		$	63,542		$	43,384

Summary of Provision for Income Taxes and U.S. Federal Tax Rate

The provision for income taxes differs from amounts computed by applying the U.S. federal tax rate of 35% to income before income taxes for the years ended December 31 due to the following (in thousands):

	2012					2011					2010
Computed “expected” tax expense	$	108,777		35.00	%	$	73,807		35.00	%	$	52,948		35.00	%
Changes resulting from:
Foreign income tax differential		(11,695	)	(3.76	)		(8,333	)	(3.95	)		(7,074	)	(4.68	)
State taxes net of federal benefits		3,858		1.24			1,923		0.91			1,279		0.85
Foreign-sourced nontaxable income		(8,840	)	(2.84	)		(4,423	)	(2.10	)		(3,873	)	(2.56	)
Other		2,491		0.76			568		0.27			104		0.07
Provision for income taxes	$	94,591		30.40	%	$	63,542		30.13	%	$	43,384		28.68	%

Summary of Deferred Tax Assets and Liabilities

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at December 31 are as follows (in thousands):

	2012			2011
Deferred tax assets:
Accounts receivable, principally due to the allowance for doubtful accounts	$	4,028		$	3,251
Accrued expenses not currently deductible for tax		2,257			2,995
Stock based compensation		8,226			8,289
Foreign tax credit		177			177
Net operating loss carry forwards		4,291			3,168
Fixed assets		580			—
Other		643			363
Deferred tax assets before valuation allowance		20,202			18,243
Valuation allowance		(1,382	)		(1,709	)
Deferred tax assets, net		18,820			16,534
Deferred tax liabilities:
Property and equipment, principally due to differences between book and tax depreciation		—			(4,020	)
Intangibles—including goodwill		(165,270	)		(139,126	)
Basis difference in investment in foreign subsidiaries		(26,926	)		—
Other		(769	)		—
Deferred tax liabilities		(192,965	)		(143,146	)
Net deferred tax liabilities	$	(174,145	)	$	(126,612	)

Summary of Classified Deferred Tax Balances Based on Net Current and Noncurrent Items

The Company’s deferred tax balances are classified in its balance sheets based on net current items and net non-current items as of December 31 as follows (in thousands):

	2012			2011
Current deferred tax assets and liabilities:
Current deferred tax assets	$	6,464		$	6,140
Long term deferred tax assets and liabilities:
Long term deferred tax assets		12,357			10,394
Long term deferred tax liabilities		(192,966	)		(143,146	)
Net long term deferred tax liabilities		(180,609	)		(132,752	)
Net deferred tax liabilities	$	(174,145	)	$	(126,612	)

Reconciliation of Unrecognized Tax Benefits

A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits including interest for the years ended December 31, 2012, 2011 and 2010 is as follows (in thousands):

Unrecognized tax benefits at December 31, 2009		3,601
Additions based on tax provisions related to the current year		549
Deductions based on settlement/expiration of prior year tax positions		(680	)
Unrecognized tax benefits at December 31, 2010		3,912
Additions based on tax provisions related to the current year		524
Additions based on tax provisions related to the prior year		1,010
Deductions based on settlement/expiration of prior year tax positions		(452	)
Unrecognized tax benefits at December 31, 2011	$	4,994
Additions based on tax provisions related to the current year		1,870
Additions based on tax provisions related to the prior year		716
Deductions based on settlement/expiration of prior year tax positions		(503	)
Unrecognized tax benefits at December 31, 2012	$	7,077