Income Taxes (Text Block)

6 Months Ended

Jun. 30, 2014

Income Tax Disclosure [Abstract]

Income Taxes [Text Block]

Income Taxes

Our tax provisions as a percentage of income (loss) before tax typically differ from the federal statutory rate of 35%, and may vary from period to period, due to fluctuations in the forecast mix of earnings in domestic and international jurisdictions, new or revised tax legislation and accounting pronouncements, tax credits, state income taxes, adjustments to valuation allowances, and uncertain tax positions, among other items.

Our tax expense for the three and six months ended June 30, 2014 was lower than the federal statutory rate of 35% due to the forecasted mix of earnings in domestic and international jurisdictions, estimated benefits of foreign tax credits, the benefit of certain interest expense deductions, and an election under U.S. Internal Revenue Code Section 338 with respect to a foreign acquisition in 2007.

Our tax expense for the three months ended June 30, 2013 was lower than the federal statutory rate of 35% due to the forecasted mix of earnings in domestic and international jurisdictions, the benefit of certain interest expense deductions, and an election under U.S. Internal Revenue Code Section 338 with respect to a foreign acquisition in 2007. Our tax benefit for the six months ended June 30, 2013 reflects the favorable discrete tax benefit for the retroactive extension of the 2012 research and experimentation credit in the amount of $4.0 million. The American Taxpayer Relief Act of 2012 was signed into law on January 2, 2013 and extended several business tax provisions including the research and experimentation credit. Our annual estimated effective tax rate for 2013 was favorably impacted due to the forecasted mix of earnings in domestic and international jurisdictions, the benefit of certain interest expense deductions, and an election under U.S. Internal Revenue Code Section 338 with respect to a foreign acquisition in 2007. 

We classify interest expense and penalties related to unrecognized tax liabilities and interest income on tax overpayments as components of income tax expense. The net interest and penalties expense recognized were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
	(in thousands)
Net interest and penalties expense	$	1,782	$	168	$	1,239	$	339

Accrued interest and penalties recorded were as follows:

	June 30, 2014		December 31, 2013
	(in thousands)
Accrued interest	$	2,020	$	2,078
Accrued penalties	4,426		3,075

Unrecognized tax benefits related to uncertain tax positions and the amount of unrecognized tax benefits that, if recognized, would affect our effective tax rate were as follows:

	June 30, 2014		December 31, 2013
	(in thousands)
Unrecognized tax benefits related to uncertain tax positions	$	39,262	$	28,615
The amount of unrecognized tax benefits that, if recognized, would affect our effective tax rate	38,044		27,694

Through June 30, 2014, we have increased our unrecognized tax benefits related to uncertain tax positions by $10.6 million and related penalties due to tax positions relating to various intercompany transactions.

We believe it is reasonably possible that our unrecognized tax benefits may decrease by approximately $2.0 million within the next twelve months due to the expiration of the statute of limitations. At June 30, 2014, we are not able to reasonably estimate the timing of future cash flows related to our uncertain tax positions.