Income Taxes

9 Months Ended

Dec. 31, 2011

Income Taxes [Abstract]

Income Taxes

Note 15. Income Taxes

The Company recorded tax provisions of $2.9 million and $49.0 million for the third quarter and the first nine months of fiscal 2012, respectively, representing effective tax rates of 2% and 11%, respectively. The rate for the third quarter of fiscal 2012 included a net discrete benefit of $15.3 million relating primarily to lapses of statutes of limitation. The Company recorded tax provisions of $27.9 million and $120.4 million for the third quarter and the first nine months of fiscal 2011, respectively, representing effective tax rates of 15% and 20%, respectively. The rate for the third quarter of fiscal 2011 included a benefit of $6.4 million for the retroactive extension of the federal research credit.

The difference between the U.S. federal statutory tax rate of 35% and the Company’s effective tax rate is primarily due to income earned in lower tax rate jurisdictions, for which no U.S. income tax has been provided, as the Company intends to permanently reinvest these earnings outside of the U.S.

The Company’s total gross unrecognized tax benefits as of December 31, 2011, determined in accordance with FASB authoritative guidance for measuring uncertain tax position, decreased by $19.0 million in the third quarter of fiscal 2012 to $65.0 million. The decrease was primarily attributable to lapses of statutes of limitation. The total amount of unrecognized tax benefits that, if realized in a future period, would favorably affect the effective tax rate was $41.4 million as of December 31, 2011. It is reasonably possible that changes to our unrecognized tax benefits could be significant in the next twelve months due to tax audit settlements and lapses of statutes of limitation. As a result of uncertainties regarding tax audit settlements and their possible outcomes, an estimate of the range of increase or decrease that could occur in the next twelve months cannot be made.

The Company’s policy is to include interest and penalties related to income tax liabilities within the provision for income taxes on the consolidated statements of income. The balance of accrued interest and penalties recorded in the condensed consolidated balance sheet as of December 31, 2011 was $1.8 million. The decrease of interest and penalties included in the Company’s provision for income taxes totaled $757 thousand and $409 thousand in the three and nine months ended December 31, 2011, respectively.

The Company is no longer subject to U.S. federal audits by taxing authorities for years through fiscal 2008. The Company is no longer subject to U.S. state audits for years through fiscal 2004, except for fiscal years 1996 through 2001 which are still open for audit purposes. The Company is no longer subject to tax audits in Ireland for years through fiscal 2007.