Income Taxes (Tables)

12 Months Ended

Jan. 27, 2013

Schedule of components of income tax expense

The (benefit) provision for taxes consists of the following:



	Fiscal Year Ended
(in thousands)	January 27, 2013			January 29, 2012			January 30, 2011
Current tax provision
Federal	$	7,100		$	2,336		$	3,178
State	784			569			444
Foreign	5,745			4,615			2,822
Subtotal	13,629			7,520			6,444
Deferred tax (benefit) provision
Federal	(15,812		)	(4,417		)	(1,631		)
State	(148		)	1,232			(5		)
Foreign	(39,359		)	757			1,952
Subtotal	(55,319		)	(2,428		)	316
(Benefit) provision for taxes	$	(41,690	)	$	5,092		$	6,760

Schedule of income tax reconciliation

The (benefit) provision for taxes reconciles to the amount computed by applying the statutory federal rate to income before taxes as follows:



	Fiscal Year Ended
(in thousands)	January 27, 2013			January 29, 2012			January 30, 2011
Federal income tax at statutory rate	$	86		$	32,963		$	27,766
State income taxes, net of federal benefit	(2,472		)	(263		)	581
Foreign taxes at rates less than federal rates	(9,655		)	(16,269		)	(16,367		)
Tax credits generated	(5,328		)	(2,222		)	(1,234		)
Changes in valuation allowance	2,703			1,814			(879		)
Changes in uncertain tax positions	132			(3,235		)	2,755
Deemed dividends	1,101			1,250			1,056
Equity compensation	793			(1,312		)	1,639
Permanent differences	1,571			1,592			1,652
Sales exclusion - foreign jurisdiction	(10,689		)	(11,017		)	(9,429		)
Dividend and U.S. tax on foreign earnings	(23,443		)	—			—
Revaluation of deferred taxes assets and liabilities	3,510			—			—
Other	1			1,791			(780		)
(Benefit) provision for taxes	$	(41,690	)	$	5,092		$	6,760

Schedule of deferred tax assets and liabilities

The deferred tax assets and deferred tax liabilities are classified in the consolidated balance sheets as follows:



(in thousands)	January 27, 2013			January 29, 2012
Deferred tax assets
Current	$	7,473		$	5,339
Non-current	33,563			—
Subtotal	41,036			5,339
Deferred tax liabilities
Current	(4,221		)	(4,041		)
Non-current	(2,042		)	(1,000		)
Subtotal	(6,263		)	(5,041		)
Net deferred tax assets	$	34,773		$	298

Schedule of components of deferred tax assets and deferred tax liabilities

The components of the net deferred income tax assets at January 27, 2013 and January 29, 2012 are as follows:



(in thousands)	January 27, 2013			January 29, 2012
Current deferred tax asset:
Deferred revenue	$	1,889		$	2,346
Inventory reserve	567			347
Payroll and related accruals	2,444			1,926
Bad debt reserve	323			359
Accrued service fees	626			405
Other deferred assets	2,593			508
Valuation allowance	(969		)	(552		)
Total current deferred tax asset	7,473			5,339
Non-current deferred tax asset:
Research and development charges	2,900			3,708
Research credit carryforward	49,257			11,967
Acquired NOL carryforward	28,595			16,489
Payroll and related accruals	5,389			4,497
Stock-based compensation	8,456			10,248
Other deferred assets	3,395			772
Valuation allowance	(7,351		)	(5,065		)
Total non-current deferred tax asset	90,641			42,616
Current deferred tax liability:
Inventory reserve - foreign	(1,618		)	(2,115		)
Bad debt reserve - foreign	(773		)	(671		)
Depreciation - foreign	(1,744		)	(1,074		)
Other current deferred tax liability	(86		)	(181		)
Total current deferred tax liability	(4,221		)	(4,041		)
Non-current deferred tax liability:
Domestic tax on foreign earnings	—			(23,443		)
Purchase accounting deferred tax liability	(49,181		)	(14,159		)
Depreciation and amortization	(8,504		)	(5,760		)
Other non-current deferred tax liability	(1,435		)	(254		)
Total non-current deferred tax liability	(59,120		)	(43,616		)
Net deferred tax asset	$	34,773		$	298

Schedule of valuation of allowances

The following table summarizes the changes in these allowances during fiscal years 2013, 2012 and 2011:



	Fiscal Year Ended
(in thousands)	January 27, 2013		January 29, 2012		January 30, 2011
Beginning balance	$	5,617	$	5,053	$	6,502
Additions	2,703		564		2,767
Releases	—		—		(4,216		)
Ending balance	$	8,320	$	5,617	$	5,053

Schedule of gross unrecognized tax benefits

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits (before federal impact of state items) is as follows:



	Fiscal Year Ended
(in thousands)	January 27, 2013			January 29, 2012			January 30, 2011
Beginning balance	$	13,759		$	17,011		$	13,795
Additions based on tax positions related to the current year	695			835			449
Additions for tax positions of prior years	—			—			3,592
Reductions for tax positions of prior years	(647		)	(4,087		)	—
Reductions for settlements with tax authorities	(663		)	—			(825		)
Ending balance	$	13,144		$	13,759		$	17,011

Schedule of liability for uncertain tax positions

The liability for uncertain tax positions is reflected on the consolidated balance sheets as follows:



	Fiscal Year Ended
(in thousands)	January 27, 2013		January 29, 2012
Accrued liabilities	$	188	$	437
Other long-term liabilities	10,887		11,159
Total accrued taxes	$	11,075	$	11,596

- 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.

+ References+ Details

- Definition

Tabular disclosure of valuation allowances to reduce deferred tax assets to net realizable value, including identification of the deferred tax asset more likely than not will not be fully realized and the corresponding amount of the valuation allowance.

+ References+ Details