8x8 2013 Annual Report Download - page 57

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55
The Company also received a $1.7 million allowance for tenant improvements. In accordance with the guidance in ASC 840-
20, Leases, the Company accounts for its headquarters facility operating lease as follows:
Rent Holidays. The Company recognizes the related rent expense on a straight-line basis at the earlier of the first rent payment
or the date of possession of the leased property. The difference between the amounts charged to expense and the rent paid is
recorded as deferred lease incentives and amortized over the lease term.
Rent Escalations. The Company recognizes escalating rent provisions on a straight-line basis over the lease term. The
difference between the amounts charged to expense and the rent paid is recorded as deferred lease incentives and amortized
over the lease term.
Tenant Improvement Allowance. The tenant improvement allowance is deferred and amortized on a straight-line basis over the
life of the lease as a reduction to rent expense.
In the second quarter of fiscal 2013, the Company received a $1.7 million allowance for reimbursement for the cost of tenant
improvements that the Company included in cash flows from operating activities. At March 31, 2013, total deferred rent
included in other accrued liabilities and non-current liabilities was $0.2 million and $1.8 million, respectively. At March 31,
2012, total deferred rent included in other accrued liabilities and non-current liabilities was less than $0.1 million and $0,
respectively.
2. INCOME TAXES
For the years ended March 31, 2013, 2012 and 2011, the Company recorded a provision (benefit) for income taxes of
$9,733,000, ($62,354,000) and $55,000, respectively. The provision for the year ended March 31, 2013 was attributable to
federal and state current and deferred taxes. For the year ended March 31, 2012, the Company recorded a benefit for income
taxes of $62.4 million which was primarily attributable to the release of a significant portion of the valuation allowance related
to the Company’s deferred tax assets. The provision for the year ended March 31, 2011 was attributable to foreign and state
current tax. The components of the consolidated provision for income taxes for fiscal 2013, 2012 and 2011 consisted of the
following (in thousands):
Current:
2013
2012
2011
Federal
$
-
$
-
$
-
State
473
76
53
Foreign
-
(8)
2
473
68
55
Deferred
Federal
$
7,465
$
(56,665)
$
-
State
1,795
(5,757)
-
Foreign
-
-
-
Total deferred tax provision (benefit)
9,260
(62,422)
-
Income tax provision (benefit) $ 9,733 $ (62,354) $ 55
March 31,
The Company's income before income taxes included $0, $0 and $3,000 of foreign subsidiary income for the fiscal years ended
March 31, 2013, 2012 and 2011, respectively.