LifeLock 2013 Annual Report Download - page 50

temporary differences. As of December 31, 2013, we had U.S. federal and state net operating losses of approximately $199.4 million and $147.3 million,
respectively, which will continue to reduce the amount of cash taxes to be paid.
In consideration of all available positive and negative evidence, including our historical operating results, current financial condition, and potential
future taxable income, we released substantially all of our valuation allowance on deferred tax assets in the fourth quarter of 2013. As a result, we recorded an
income tax benefit of $39.1 million for the year ended December 31, 2013 compared with income tax benefit of $13.7 million for the year ended December 31,
2012. At December 31, 2013, we retained a valuation allowance related to certain state net operating losses that are expected to expire in 2014 and 2015.
As a result of the acquisition of ID Analytics in the year ended December 31, 2012, we recorded a deferred tax liability related to the book and tax basis
difference resulting from our purchase accounting. The recognition of this deferred tax liability offset $8.5 million of the acquired gross deferred tax assets. A
valuation allowance was established in the purchase price allocation f or the remaining $1.0 million of acquired gross deferred tax assets. This resulted in the
recognition of a net deferred tax liability that has been recognized in our purchase price allocation. As a result of the recognition of this net deferred tax liability,
we concluded that the deferred tax assets we had recognized prior to the acquisition for which we had previously recorded a valuation allowance were more
likely than not of being realized. Accordingly, we reduced our valuation allowance for these deferred tax assets, which is recorded as an income tax benefit of
$14.2 million in our consolidated statements of operations for the year ended December 31, 2012.
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Consumer revenue $340,121 $ 254,678 $ 193,949 33.5% 31.3%
Enterprise revenue 29,537 21,750 - 35.8% NM
Total revenue $369,658 $ 276,428 $ 193,949
Consumer revenue for the year ended December 31, 2013 was $340.1 million, an increase of $85.4 million, or 33.5%, over consumer revenue for the
year ended December 31, 2012. The increase in our consumer revenue from 2012 to 2013 related primarily to an increase in the number of our members,
which grew from approximately 2.5 million as of December 31, 2012 to approximately 3.0 million as of December 31, 2013, an increase of 21%. In addition,
our monthly average revenue per member increased 11% to $10.32 for the year ended December 31, 2013 from $9.28 for the year ended December 31, 2012.
The increase in members and monthly average revenue per member resulted from the continued success of our LifeLock Ultimate service offering and our
advertising and marketing campaigns designed to increase the overall awareness of our services and identity theft.
Revenue from our consumer segment for the year ended December 31, 2012 was $254.7 million, an increase of $60.7 million, or 31 .3%, over revenue
of $193.9 million for the year ended December 31, 2011. The increase in our consumer revenue from 2011 to 2012 related primarily to an increase in the
number of our members, which grew from 2.1 million as of December 31, 2011 to approximately 2.5 million as of December 31, 2012, an increase of 20%. In
addition, our monthly average revenue per member increased 9% to $9.28 for the year ended December 31, 2012 from $8.54 for the year ended December 31,
2011. The increase in members and monthly average revenue per member resulted from the introduction of our LifeLock Ultimate service offering and our
advertising and marketing campaigns designed to increase the overall awareness of our services and identity theft.
Enterprise revenue for the year ended December 31, 2013 was $29.5 million, an increase of $7.8 million, or 35.8%, over enterprise revenue for the
year ended December 31, 2012. Enterprise revenue increased in 2013 compared to 2012 even though enterprise transactions decreased. The enterprise revenue
increased as the lower revenue per transaction volume from a large telecommunication customer was replaced by higher revenue per transactions from other
enterprise customers. In addition, we acquired ID Analytics on March 14, 2012 and, accordingly, our enterprise revenue for the year ended December 31, 2012
only includes the revenue contributed by ID Analytics since that date.
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