NetZero 2011 Annual Report Download - page 145

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Table of Contents
UNITED ONLINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
10. INCOME TAXES (Continued)
The provision for income taxes reconciled to the amount computed by applying the statutory federal rate to income before taxes as follows
(in thousands):
The significant components of net deferred tax balances were as follows (in thousands):
The Company had a valuation allowance of $8.8 million and $7.5 million at December 31, 2011 and 2010, respectively, to reduce deferred
tax assets to an amount that is more likely than not to be realized in future periods. The valuation allowance relates primarily to net operating
losses and foreign tax credits.
F-37
Year Ended December 31,
2011
2010
2009
Federal taxes at statutory rate of 35%
$
26,392
$
31,470
$
41,380
State taxes, net
1,662
2,846
3,493
Nondeductible executive compensation
1,992
3,873
6,377
Effects of foreign income
(3,300
)
(3,321
)
(2,706
)
Foreign distribution
9,890
9,636
8,127
Foreign tax credit
(7,869
)
(6,807
)
(5,871
)
Changes in uncertain tax positions
(3,732
)
(1,448
)
(2,669
)
Other differences, net
(1,359
)
(21
)
13
Provision for income taxes
$
23,676
$
36,228
$
48,144
December 31,
2011
2010
Deferred tax assets:
Net operating loss and foreign tax credit carryforwards
$
51,046
$
54,051
Stock
-
based compensation
3,212
3,156
Other, net
13,781
11,153
Total gross deferred tax assets
68,039
68,360
Less: valuation allowance
(8,777
)
(7,510
)
Total deferred tax assets after valuation allowance
59,262
60,850
Deferred tax liabilities:
Amortization of acquired intangible assets
(76,069
)
(84,039
)
Depreciation and amortization
(11,704
)
(5,288
)
Total deferred tax liabilities
(87,773
)
(89,327
)
Net deferred tax liabilities
$
(28,511
)
$
(28,477
)
December 31,
2011 2010
Current deferred tax assets, net
$
15,587
$
14,200
Non
-
current deferred tax liabilities, net
(44,098
)
(42,677
)
Net deferred tax liabilities
$
(28,511
)
$
(28,477
)