INCOME TAXES

3 Months Ended

Mar. 31, 2012

INCOME TAXES

INCOME TAXES

Note 7 INCOME TAXES

The Company estimates its annual effective tax rate at the end of each quarter. In making these estimates, the Company considers, among other things, annual pre-tax income, the geographic mix of pre-tax income and the application and interpretations of tax laws, treaties and judicial developments, in collaboration with its tax advisors, and possible outcomes of audits.

The following table presents the provision for income taxes and the effective tax rates:

	Three Months Ended
	March 31,			March 31,
	2012			2011
	(in thousands, except for percentages)
Income before income taxes	$	24,732		$	84,348
Provision for income taxes	(4,345		)	(9,795		)
Effective tax rate	17.57		%	11.61		%

The Company’s effective tax rate for the three months ended March 31, 2012 was lower than the statutory federal income tax rate of 35%.  The Company’s tax provision was lower than it otherwise would have been due to income recognized in lower tax rate jurisdictions as a result of a reorganization of its subsidiary structure implemented on January 1, 2011 and the recognition of certain refundable R&D credits. The effective tax rate for the three months ended March 31, 2011 was lower than the statutory federal income tax rate of 35% primarily due to tax rate benefits of certain earnings from the Company’s operations in jurisdictions with lower tax rates than the US.  These benefits result primarily from the January 1, 2011 reorganization of its subsidiary structure.

The Company files U.S., state and foreign income tax returns in jurisdictions with varying statutes of limitations. The 2001 through 2011 tax years generally remain subject to examination by federal and most state tax authorities. For significant foreign jurisdictions, the 2001 through 2011 tax years generally remain subject to examination by their respective tax authorities.

Currently, the Company has tax audits in progress in various foreign jurisdictions. To the extent the final tax liabilities are different from the amounts originally accrued, the increases or decreases are recorded as income tax expense or benefit in the consolidated statements of operations. While the Company believes that the resolution of these audits will not have a material adverse impact on the Company’s results of operations, the outcome is subject to uncertainty.

At March 31, 2012 and December 31, 2011, the Company had $23.9 million and $25.2 million of unrecognized tax benefits, respectively, which, if recognized, would affect the effective tax rate.  Also at March 31, 2012 and December 31, 2011, the Company had $43.5 million and $42.8 million of unrecognized tax benefits, respectively, which, if recognized, would result in adjustments to other tax accounts, primarily deferred tax assets.

Increases or decreases in unrecognizable tax benefits could occur over the next 12 months due to tax law changes, unrecognized tax benefits established in the normal course of business, or due to the conclusion of ongoing tax audits in various jurisdictions around the world.  While it is reasonably possible that some or all of these events may occur within the next 12 months, the Company is not able to accurately estimate the range of any potential change in unrecognized tax benefits that would result from the occurrence of such events.  The calculation of unrecognized tax benefits involves dealing with uncertainties in the application of complex global tax regulations. The Company regularly assesses its tax positions in light of legislative, bilateral tax treaty, regulatory and judicial developments in the countries in which the Company does business.