Income Taxes (Tables)

12 Months Ended

Dec. 31, 2011

Income Taxes [Abstract]

Income (loss) before provision for (benefit from) income taxes

Income (loss) before provision for (benefit from) income taxes consists of the following:

	Year ended December 31,
	2011			2010			2009
	(In thousands)
United States	$	(4,925	)	$	66,036		$	9,749
International		16,558			(60,597	)		(19,484	)
	$	11,633		$	5,439		$	(9,735	)

Provision for (benefit from) income taxes

The provision for income taxes consists of the following:

	Year ended December 31,
	2011			2010			2009
	(In thousands)
Current:
Federal	$	3,184		$	7,940		$	3,768
State		755			1,820			(1,661	)
International		1,222			755			471
Deferred:
Federal		(3,618	)		2,267			4,225
State		(392	)		(1,768	)		7,036
International		1,703			(1,240	)		565
	$	2,854		$	9,774		$	14,404

Reconciliation of provision for (benefit from) income taxes

Harmonic’s provision for income taxes differed from the amount computed by applying the statutory U.S. federal income tax rate to the income (loss) before income taxes as follows:

	Year ended December 31,
	2011			2010			2009
	(In thousands)
Provision for (benefit from) income taxes at U.S. Federal statutory rate	$	4,071		$	1,904		$	(3,407	)
State taxes		1,053			(469	)		(1,661	)
Differential in rates on foreign earnings		(9,924	)		(1,842	)		(1,768	)
Losses for which no benefit is taken		9,185			6,880			8,980
Change in valuation allowance		—			(450	)		8,150
Change in liabilities for uncertain tax positions		(1,540	)		1,261			2,390
Non-deductible stock-based compensation		1,882			1,940			1,811
Research credits		(2,138	)		(1,404	)		(1,163	)
Non-deductible acquisition related expenses		—			1,289			—
Other		265			665			1,072
	$	2,854		$	9,774		$	14,404

Components of deferred tax assets and liabilities

Deferred tax assets (liabilities) comprise the following:

	December 31,
	2011			2010			2009
	(In thousands)
Deferred tax assets:
Reserves and accruals	$	31,208		$	33,741		$	19,876
Net operating loss carryovers		24,852			27,431			21,925
Depreciation and amortization		—			—			7,440
Research and development credit carryovers		13,500			12,136			14,930
Deferred stock-based compensation		6,643			6,063			4,703
Other tax credits		2,764			2,813			3,883
Other		—			—			292
Total deferred tax assets		78,967			82,184			73,049
Valuation allowance		(28,354	)		(26,557	)		(18,025	)
Net deferred tax assets		50,613			55,627			55,024
Deferred tax liabilities:
Depreciation and amortization		(5,434	)		(3,320	)		—
Intangibles		(17,668	)		(26,172	)		(7,331	)
Other		(135	)		(1,066	)		—
Net deferred tax liabilities	$	(23,237	)	$	(30,558	)	$	(7,331	)

Activity related to the Company's valuation allowance

The following table summarizes the activity related to the Company’s valuation allowance:

	Year ended December 31,
	2011		2010		2009
	(In thousands)
Balance at beginning of period	$	26,557	$	18,025	$	1,904
Additions		1,797		8,532		16,121
Deductions		—		—		—
Balance at end of period	$	28,354	$	26,557	$	18,025

Activity related to the Company's gross unrecognized tax benefits

The following table summarizes the activity related to the Company’s gross unrecognized tax benefits:

	Year ended December 31,
	2011			2010			2009
	(In millions)
Balance at beginning of period	$	48.4		$	47.0		$	46.5
Increases related to tax positions		6.6			7.8			1.7
Expiration of the statute of limitations for the assessment of taxes and release of other tax contingencies		(2.5	)		(6.4	)		(1.2	)
Balance at end of period	$	52.5		$	48.4		$	47.0