Income Taxes (Tables)

12 Months Ended

Jan. 26, 2014

Schedule of components of income tax expense

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



	Fiscal Year Ended
(in thousands)	January 26, 2014			January 27, 2013			January 29, 2012
Current tax provision
Federal	$	3,769		$	7,100		$	2,336
State	554			784			569
Foreign	14,962			5,745			4,615
Subtotal	19,285			13,629			7,520
Deferred tax provision (benefit)
Federal	23,938			(15,812		)	(4,417		)
State	(1,293		)	(148		)	1,232
Foreign	(5,945		)	(39,359		)	757
Subtotal	16,700			(55,319		)	(2,428		)
Provision (benefit) for taxes	$	35,985		$	(41,690	)	$	5,092

Schedule of income tax reconciliation

The provision (benefit) 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 26, 2014			January 27, 2013			January 29, 2012
Federal income tax at statutory rate	$	(44,968	)	$	86		$	32,963
State income taxes, net of federal benefit	(1,260		)	(2,472		)	(263		)
Foreign taxes at rates less than federal rates	(8,378		)	(9,655		)	(16,269		)
Tax credits generated	(5,523		)	(5,328		)	(2,222		)
Changes in valuation allowance	52,942			2,703			1,814
Goodwill impairment	40,840			—			—
Changes in uncertain tax positions	893			132			(3,235		)
Deemed dividends	726			1,101			1,250
Equity compensation	1,173			793			(1,312		)
Permanent differences	2,895			1,571			1,592
Sales exclusion - foreign jurisdiction	—			(10,689		)	(11,017		)
Dividend and U.S. tax on foreign earnings	—			(23,443		)	—
Revaluation of deferred taxes assets and liabilities	(12		)	3,510			—
Other	(3,343		)	1			1,791
Provision (benefit) for taxes	$	35,985		$	(41,690	)	$	5,092

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 26, 2014			January 27, 2013
Deferred tax assets
Current	$	2,946		$	7,473
Non-current	348			33,563
Subtotal	3,294			41,036
Deferred tax liabilities
Current	(930		)	(4,221		)
Non-current	(3,626		)	(2,042		)
Subtotal	(4,556		)	(6,263		)
Net deferred tax (liabilities) assets	$	(1,262	)	$	34,773

Schedule of components of deferred tax assets and deferred tax liabilities

The components of the net deferred income tax assets and liabilities at January 26, 2014 and January 27, 2013 are as follows:



(in thousands)	January 26, 2014			January 27, 2013
Current deferred tax asset:
Deferred revenue	$	2,773		$	1,889
Inventory reserve	3,032			567
Payroll and related accruals	2,133			2,444
Bad debt reserve	416			323
Accrued service fees	591			626
Other deferred assets	1,562			2,593
Valuation allowance	(7,321		)	(969		)
Total current deferred tax asset	3,186			7,473
Non-current deferred tax asset:
Research and development charges	2,109			2,900
Research credit carryforward	39,350			49,257
Acquired NOL carryforward	31,165			28,595
Payroll and related accruals	6,268			5,389
Stock-based compensation	5,732			8,456
Other deferred assets	3,567			3,395
Valuation allowance	(53,931		)	(7,351		)
Total non-current deferred tax asset	34,260			90,641
Current deferred tax liability:
Inventory reserve - foreign	(430		)	(1,618		)
Bad debt reserve - foreign	(223		)	(773		)
Depreciation - foreign	—			(1,744		)
Other current deferred tax liability	(517		)	(86		)
Total current deferred tax liability	(1,170		)	(4,221		)
Non-current deferred tax liability:
Purchase accounting deferred tax liability	(32,466		)	(49,181		)
Depreciation and amortization	(3,695		)	(8,504		)
Other non-current deferred tax liability	(1,377		)	(1,435		)
Total non-current deferred tax liability	(37,538		)	(59,120		)
Net deferred tax (liability) asset	$	(1,262	)	$	34,773

Schedule of valuation of allowances

The following table summarizes the changes in these allowances during fiscal years 2014, 2013 and 2012:



	Fiscal Year Ended
(in thousands)	January 26, 2014		January 27, 2013		January 29, 2012
Beginning balance	$	8,320	$	5,617	$	5,053
Additions	52,931		2,703		564
Releases	—		—		—
Ending balance	$	61,251	$	8,320	$	5,617

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 26, 2014			January 27, 2013			January 29, 2012
Beginning balance	$	13,144		$	13,759		$	17,011
Additions based on tax positions related to the current year	1,484			695			835
Reductions for tax positions of prior years	(214		)	(647		)	(4,087		)
Reductions for settlements with tax authorities	—			(663		)	—
Ending balance	$	14,414		$	13,144		$	13,759

Schedule of liability for uncertain tax positions

The liability for UTP is reflected on the consolidated balance sheets as follows:



	Fiscal Year Ended
(in thousands)	January 26, 2014		January 27, 2013
Deferred tax assets - non-current	$	12,095	$	—
Accrued liabilities	—		188
Other long-term liabilities	252		10,887
Total accrued taxes	$	12,347	$	11,075

- 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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- 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.

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