Annual report pursuant to Section 13 and 15(d)

Income Taxes (Tables)

v2.4.0.6
Income Taxes (Tables)
12 Months Ended
Jun. 30, 2012
Income Tax Disclosure [Abstract]
Schedule of Income before Income Taxes, Domestic and Foreign
The components of income before income taxes are as follows:
Year ended June 30,
(In thousands)
2012
2011
2010
Domestic income before income taxes
$
607,146

$
752,163

$
122,219

Foreign income before income taxes
366,948

357,903

168,962

Total income before income taxes
$
974,094

$
1,110,066

$
291,181

Schedule of Components of Income Tax Expense (Benefit)
The provision for income taxes is comprised of the following:
(In thousands)
Year ended June 30,
2012
2011
2010
Current:
Federal
$
(699
)
$
225,192

$
63,687

State
51

2,095

8,799

Foreign
24,383

31,578

30,225

$
23,735

$
258,865

$
102,711

Deferred:
Federal
$
188,882

$
40,908

$
(9,258
)
State
3,721

26,458

(3,689
)
Foreign
1,741

(10,653
)
(10883
)
194,344

56,713

(23,830
)
Provision for income taxes
$
218,079

$
315,578

$
78,881

Schedule of Deferred Tax Assets and Liabilities
The significant components of deferred income tax assets and liabilities are as follows:
(In thousands)
As of June 30,
2012
2011
Deferred tax assets:
Tax credits and net operating losses
$
66,392

$
62,020

Employee benefits accrual
78,112

83,328

Stock-based compensation
37,300

63,625

Capitalized R&D expenses
57,192

79,815

Inventory reserves
57,736

53,217

Non-deductible reserves
45,682

45,154

Deferred profit
—

91,302

Unearned revenue
9,991

26,632

Other
57,464

59,275

Gross deferred tax assets
409,869

564,368

Valuation allowance
(40,479
)
(30,722
)
Net deferred tax assets
$
369,390

$
533,646

Deferred tax liabilities:
Unremitted earnings of foreign subsidiaries not permanently reinvested
$
(22,746
)
$
(25,131
)
Depreciation and amortization
(10,202
)
(20,254
)
Deferred profit
(37,906
)
—

Unrealized gain on investments
(1,070
)
(2,215
)
Total deferred tax liabilities
(71,924
)
(47,600
)
Total net deferred tax assets
$
297,466

$
486,046

Schedule of Effective Income Tax Rate Reconciliation
The reconciliation of the United States federal statutory income tax rate to KLA-Tencor’s effective income tax rate is as follows:
Year ended June 30,
2012
2011
2010
Federal statutory rate
35.0
%
35.0
%
35.0
%
State income taxes, net of federal benefit
0.4
%
2.5
%
0.6
%
Effect of foreign operations taxed at various rates
(9.9
)%
(9.0
)%
(9.6
)%
Research and development tax credit
(1.1
)%
(1.2
)%
(1.2
)%
Net change in tax reserves
(2.8
)%
2.1
%
0.5
%
Domestic manufacturing benefit
(0.7
)%
(1.9
)%
(1.7
)%
Effect of stock-based compensation
1.3
%
1.4
%
4.0
%
Other
0.2
%
(0.5
)%
(0.5
)%
Effective income tax rate
22.4
%
28.4
%
27.1
%
Summary of Income Tax Contingencies
A reconciliation of the gross unrecognized tax benefit is as follows:
Year ended June 30,
(In thousands)
2012
2011
2010
Unrecognized tax benefits at the beginning of the period
$
78,337

$
53,492

$
49,738

Increases for tax positions taken in prior years
4,172

5,228

6,553

Decreases for tax positions taken in prior years
(1,002
)
—

(1,897
)
Increases for tax positions taken in current year
15,663

32,152

10,912

Decreases for settlements with taxing authorities
(43,464
)
(11,786
)
—

Decreases for lapsing of the statute of limitations
(2,867
)
(749
)
(11,814
)
Unrecognized tax benefits at the end of the period
$
50,839

$
78,337

$
53,492

Baidu