Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Income (Loss) Before Income Tax Provision

Income (loss) before income tax provision consists of the following (in thousands):

	Year ended December 31,
	2012			2011			2010
United States	$	(19,319	)	$	(4,925	)	$	66,036
International		10,234			16,558			(60,597	)
Income (loss) before provision for income taxes	$	(9,085	)	$	11,633		$	5,439

Provision for Income Taxes

The provision for income taxes consists of the following (in thousands):

	Year ended December 31,
	2012			2011			2010
Current:
Federal	$	3,994		$	3,184		$	7,940
State		433			755			1,820
International		1,193			1,222			755
Deferred:
Federal		(2,053	)		(3,618	)		2,267
State		(1,362	)		(392	)		(1,768	)
International		(353	)		1,703			(1,240	)
Total provision for income taxes	$	1,852		$	2,854		$	9,774

Reconciliation of Provision for Income Taxes

The differences between the provision for income taxes computed at the U.S. federal statutory rate and the Company’s actual provision for income taxes are as follows (in thousands):

	Year ended December 31,
	2012			2011			2010
Provision for income taxes at U.S. Federal statutory rate	$	(3,180	)	$	4,071		$	1,904
State taxes		(604	)		1,053			(469	)
Differential in rates on foreign earnings		(5,181	)		(9,924	)		(1,842	)
Losses for which no benefit is taken		7,279			9,185			6,880
Change in valuation allowance		(1,104	)		—			(450	)
Change in liabilities for uncertain tax positions		1,708			(1,540	)		1,261
Non-deductible stock-based compensation		1,996			1,882			1,940
Research credits		—			(2,138	)		(1,404	)
Non-deductible acquisition related expenses		—			—			1,289
Non-deductible meals and entertainment		232			237			165
Adjustments related to tax positions taken during prior years		619			(255	)		—
Foreign income inclusion		317			—			403
Adjustment related to property and equipment		—			—			182
Tax-exempt investment income		(248	)		(71	)		(180	)
Other		18			354			95
Total provision for income taxes	$	1,852		$	2,854		$	9,774

Components of Deferred Tax Assets and Liabilities

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

	December 31,
	2012			2011			2010
Deferred tax assets:
Reserves and accruals	$	31,999		$	31,208		$	33,741
Net operating loss carryovers		27,522			24,852			27,431
Research and development credit carryovers		13,704			13,500			12,136
Deferred stock-based compensation		7,684			6,643			6,063
Other tax credits		2,207			2,764			2,813
Total deferred tax assets		83,116			78,967			82,184
Valuation allowance		(34,347	)		(28,354	)		(26,557	)
Net deferred tax assets		48,769			50,613			55,627
Deferred tax liabilities:
Depreciation and amortization		(5,485	)		(5,434	)		(3,320	)
Intangibles		(11,656	)		(17,668	)		(26,172	)
Other		(483	)		(135	)		(1,066	)
Net deferred tax liabilities	$	(17,624	)	$	(23,237	)	$	(30,558	)

Activities Related to Valuation Allowance

The following table summarizes the activity related to the Company’s valuation allowance (in thousands):

	Year ended December 31,
	2012		2011		2010
Balance at beginning of period	$	28,354	$	26,557	$	18,025
Additions		5,993		1,797		8,532
Deductions		—		—		—
Balance at end of period	$	34,347	$	28,354	$	26,557

Activities Related to Gross Unrecognized Tax Benefits

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

	Year ended December 31,
	2012			2011			2010
Balance at beginning of period	$	52.5		$	48.4		$	47.0
Increases in balances related to tax positions taken during current year		0.6			6.6			7.8
Expiration of the statute of limitations for the assessment of taxes		(0.9	)		(2.1	)		(5.3	)
Decreases in balances related to tax positions taken during prior years		(0.1	)		(0.4	)		(1.1	)
Balance at end of period	$	52.1		$	52.5		$	48.4