Classmates.com 2009 Annual Report Download - page 141
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Table of Contents
UNITED ONLINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
10. INCOME TAXES (Continued)
The significant components of net deferred tax balances were as follows (in thousands):
The Company had a valuation allowance of $13.5 million and $9.7 million at December 31, 2009 and 2008, respectively, to reduce deferred
tax assets to an amount that is more likely than not to be realized in future periods. The valuation allowance as of December 31, 2009 relates
primarily to certain stock-based compensation that is expected to be limited under Section 162(m) of the Internal Revenue Code of 1986, as
amended (the "Code"), foreign net operating losses and foreign tax credits.
At December 31, 2009 and 2008, the Company had gross unrecognized tax benefits of $9.7 million and $11.8 million, respectively, all of
which, if recognized, would have an impact on the Company's effective income tax rate.
The Company recognizes interest and penalties for uncertain tax positions in income tax expense. The Company had $3.0 million and
$3.9 million accrued for interest and penalties relating to uncertain tax positions at December 31, 2009 and 2008, respectively, all of which is
included in income taxes payable.
F-37
December 31,
2009
2008
Deferred tax assets:
Net operating loss and foreign tax
credits carryforwards
$
58,227
$
61,242
Stock
-
based compensation
11,905
11,243
Other, net
13,356
6,885
Total gross deferred tax assets
83,488
79,370
Less: valuation allowance
(13,497
)
(9,721
)
Total deferred tax assets after
valuation allowance
69,991
69,649
Deferred tax liabilities:
Amortization of acquired intangible
assets
(94,905
)
(109,200
)
Depreciation and amortization
(4,077
)
(5,113
)
Total deferred tax liabilities
(98,982
)
(114,313
)
Net deferred tax liabilities
$
(28,991
)
$
(44,664
)
December 31,
2009 2008
Current portion of deferred tax assets, net
$
15,797
$
16,170
Long
-
term portion of deferred tax
liabilities, net
(44,788
)
(60,834
)
Net deferred tax liabilities
$
(28,991
)
$
(44,664
)