INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2012

Components of consolidated loss before income taxes

The following table presents the U.S. and foreign components of consolidated loss before income taxes (in thousands):

	Year Ended December 31,
	2012				2011				2010
(LOSS) INCOME BEFORE INCOME TAXES:
U.S.		$	(36,248	)		$	(26,778	)		$	(15,722	)
Foreign			(10,301	)			22				7,659
Loss before income taxes		$	(46,549	)		$	(26,756	)		$	(8,063	)

Provision (benefit) for income taxes

The following table presents the (benefit) provision for income taxes (in thousands):

	Year Ended December 31,
	2012			2011		2010
(BENEFIT) PROVISION FOR INCOME TAXES:
Current:
Federal	$	(28	)	$	-	$	-
State		568			106		37
Foreign		1,104			1,038		2,222
Subtotal		1,644			1,144		2,259
Deferred:
Federal		(35,329	)		-		-
State		(1,811	)		-		-
Foreign		(357	)		261		(89	)
Subtotal		(37,497	)		261		(89	)
Income tax (benefit) provision	$	(35,853	)	$	1,405	$	2,170

Difference between the provision (benefit) for income taxes and the amount computed by federal statutory income tax rate

The difference between the (benefit) provision for income taxes and the amount computed by applying the federal statutory income tax rate (35%) to loss before taxes is explained as follows (in thousands):

	Year Ended December 31,
	2012			2011			2010
Tax at federal statutory rate	$	(16,292	)	$	(9,364	)	$	(2,822	)
State taxes, net		(1,136	)		(1,740	)		(1,646	)
Non-deductible stock compensation		3,470			453			626
Non-deductible acquisition costs		410			878			-
Foreign rate differential		4,353			1,274			(547	)
Research credits		-			(692	)		(991	)
Change in valuation allowance		(26,795	)		10,461			7,026
Other		137			135			524
Income tax (benefit) provision	$	(35,853	)	$	1,405		$	2,170

Significant components of the deferred tax assets and liabilities

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's assets and liabilities are as follows (in thousands):

	December 31,
	2012			2011
Deferred tax assets:
Net operating loss carryforwards	$	75,622		$	57,677
Tax credit carryforwards		50,704			47,513
Deferred revenue		1,537			1,632
Capitalized research and development costs		394			487
Intangibles		21,175			20,462
Share-based compensation		5,808			4,284
Accrued compensation		1,775			2,025
Accrued warranty		446			570
Inventory reserves		5,664			4,860
Reserves and other		13,216			10,928
Depreciation and amortization		6,731			21,323
Other, net		6,069			1,742
Total deferred tax assets		189,141			173,503
Valuation allowance for deferred tax assets		(130,979	)		(154,107	)
Net deferred tax assets		58,162			19,396
Net deferred tax liabilities:
Acquired intangible assets		(45,397	)		(2,459	)
Acquired tangible assets		(7,701	)		-
Cancellation of debt		(9,669	)		(9,669	)
Foreign earnings		(3,282	)		(5,139	)
Other, net		(1,296	)		(1,315	)
Total deferred tax liabilities		(67,345	)		(18,582	)
Net deferred tax (liabilities) assets	$	(9,183	)	$	814

Unrecognized tax benefits

The following table presents the Company's total amount of gross unrecognized tax benefits (in thousands):

	2012			2011
Unrecognized tax benefits, beginning of year	$	16,480		$	20,758
Gross increases - tax positions in prior period		3,027			517
Gross decreases - tax positions in prior period		(376	)		(201	)
Gross increases - current period tax positions		1,282			1,203
Settlements		-			(5,797	)
Unrecognized tax benefits, end of year	$	20,413		$	16,480