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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2012

Schedule of components of income (loss) before provision for (benefit from) income taxes

The components of income (loss) before provision for (benefit from) income taxes during the three years ended December 31, 2012 consisted of the following:



	2012			2011			2010
	(in thousands)
United States	$	256,816		$	343,515		$	(719,859	)
Foreign	(269,197		)	(283,070		)	(34,767		)
Income (loss) before provision for (benefit from) income taxes	$	(12,381	)	$	60,445		$	(754,626	)

Schedule of components of provision for (benefit from) income taxes

The components of provision for (benefit from) income taxes during the three years ended December 31, 2012 consisted of the following:



	2012			2011			2010
	(in thousands)
Current taxes:
United States	$	2,057		$	22,275		$	—
Foreign	(1,865		)	(561		)	—
State	1,902			8,655			—
Total current taxes	$	2,094		$	30,369		$	—
Deferred taxes:
United States	$	31,308		$	19,629		$	—
Foreign	—			(32,692		)	—
State	5,352			1,960			—
Total deferred taxes	$	36,660		$	(11,103	)	$	—
Provision for (benefit from) income taxes	$	38,754		$	19,266		$	—

Reconciliation of the provision for (benefit from) income taxes

The difference between the Company’s “expected” tax provision (benefit), as computed by applying the U.S. federal corporate tax rate to income (loss) before provision for (benefit from) income taxes, and actual tax is reconciled as follows:



	2012			2011			2010
	(in thousands)
Income (loss) before provision for (benefit from) income taxes	$	(12,381	)	$	60,445		$	(754,626	)
Expected tax provision (benefit)	(4,333		)	21,156			(256,574		)
State taxes, net of federal benefit	7,075			10,624			(46,108		)
Foreign rate differential	62,425			43,629			632
Tax credits	(1,980		)	(51,086		)	(23,292		)
Unbenefited operating losses	(30,364		)	(6,286		)	322,551
Non-deductible expenses	3,198			1,953			2,158
Rate change	3,275			—			—
Other	(542		)	(724		)	633
Provision for (benefit from) income taxes	$	38,754		$	19,266		$	—

Schedule of unrecognized tax benefits

Unrecognized tax benefits during the two years ended December 31, 2012 consisted of the following:



	2012			2011
	(in thousands)
Unrecognized tax benefits beginning of year	$	4,360		$	2,374
Gross change for current year positions	598			2,569
Increase for prior period positions	—			—
Decrease for prior period positions	—			—
Decrease due to settlements and payments	—			—
Decrease due to statute limitations	(852		)	(583		)
Unrecognized tax benefits end of year	$	4,106		$	4,360

Schedule of deferred tax assets and liabilities

The components of the deferred taxes were as follows:



	As of December 31,
	2012			2011
	(in thousands)
Deferred tax assets:
Net operating loss	$	777,687		$	870,367
Tax credit carryforwards	147,074			167,759
Property and equipment	10,701			15,537
Intangibles	63,353			71,076
Deferred revenues	44,867			59,939
Stock-based compensation	83,979			90,563
Inventories	56,564			23,883
Accrued expenses	27,945			30,636
Unrealized loss	—			245
Gross deferred tax assets	1,212,170			1,330,005
Valuation allowance	(1,211,561		)	(1,329,775		)
Total deferred tax assets	609			230
Deferred tax liabilities:
Unrealized gain	(376		)	—
Contingent milestone and royalty payment obligation	(50,904		)	(14,241		)
Acquired intangibles	(229,696		)	(229,696		)
Net deferred tax liabilities	$	(280,367	)	$	(243,707	)

- Definition

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

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