Income taxes (Notes)

9 Months Ended

Dec. 31, 2012

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The provision for income taxes reflects tax on foreign earnings and federal and state tax on U.S. earnings.  The Company had an effective tax rate of 34.1% for the nine-month period ended December 31, 2012 and 11.0% for the nine-month period ended December 31, 2011.  The Company's effective tax rate was higher in the December 31, 2012 period due to certain tax expenses associated with the acquisition of SMSC.

On January 2, 2013, the American Taxpayer Relief Act of 2012 was signed into law by the President which retroactively extends the research and experimentation tax credit for two years through 2013.  As a result of the law change, the Company expects in the quarter ending March 31, 2013, to retroactively receive a one-time tax benefit of $5.6 million for research activities incurred during calendar year 2012.  Likewise, the ongoing benefit from this credit will be reflected in the Company's effective tax rate beginning in the quarter ending March 31, 2013.

At December 31, 2012, the Company had $181.4 million of unrecognized tax benefits.  Unrecognized tax benefits increased by $110.9 million compared to March 31, 2012 primarily as a result of the unrecognized tax benefits from the acquisition of SMSC, ongoing accrual for uncertain tax positions and the accrual of deficiency interest on these positions.

The Company files U.S. federal, U.S. state, and foreign income tax returns.  For U.S. federal, and in general for U.S. state tax returns, the fiscal 2009 through fiscal 2012 tax years remain open for examination by tax authorities.  The Internal Revenue Service (I.R.S.) is currently auditing the Company's fiscal years ended March 31, 2009 and 2010.  For foreign tax returns, the Company is generally no longer subject to income tax examinations for years prior to fiscal 2005.

The Company recognizes liabilities for anticipated tax audit issues in the U.S. and other tax jurisdictions based on its estimate of whether, and the extent to which, additional tax payments are more likely than not.  The Company believes that it has appropriate support for the income tax positions taken on its tax returns and that its accruals for tax liabilities are adequate for all open years based on an assessment of many factors including past experience and interpretations of tax laws applied to the facts of each matter.

The Company believes that it maintains appropriate reserves to offset any potential income tax liabilities that may arise upon final resolution of matters for open tax years.  If such reserve amounts ultimately prove to be unnecessary, the resulting reversal of such reserves would result in tax benefits being recorded in the period the reserves are no longer deemed necessary.  If such amounts prove to be less than an ultimate assessment, a future charge to expense would be recorded in the period in which the assessment is determined.  Although the timing of the resolution and/or closure of audits is highly uncertain, the Company does not believe it is reasonably possible that its unrecognized tax benefits would materially change in the next 12 months.