Pandora 2016 Annual Report Download - page 105

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In the ordinary course of business, we are party to certain contractual agreements under which we may provide
indemnifications of varying scope, terms and duration to customers, vendors, lessors, business partners and other parties with
respect to certain matters, including, but not limited to, losses arising out of breach of such agreements, services to be provided
by us or from intellectual property infringement claims made by third parties. In addition, we have entered into indemnification
agreements with directors and certain officers and employees that will require us, among other things, to indemnify them
against certain liabilities that may arise by reason of their status or service as directors, officers or employees. Such
indemnification provisions are accounted for in accordance with guarantor’s accounting and disclosure requirements for
guarantees, including indirect guarantees of indebtedness of others. To date, we have not incurred, do not anticipate incurring
and therefore have not accrued for, any costs related to such indemnification provisions.
€
While the outcome of these matters cannot be predicted with certainty, we do not believe that the outcome of any claims
under indemnification arrangements will have a material adverse effect on our consolidated financial position, results of
operations or cash flows.
Table of Contents
Pandora Media,€Inc.
Notes to Consolidated Financial Statements - Continued
94
9.€€€€€€€€€€€€€€€€€€€€€€ Provision for Income Taxes
Loss before provision for income taxes by jurisdiction consists of the following:
Eleven Months Ended€
€December 31, Twelve Months Ended December 31,
2013 2014 2015
(in thousands)
Jurisdiction
Domestic $(24,005) $ (24,230) $ (163,460)
Foreign (2,918)(5,592)(7,751)
Loss before provision for income taxes $(26,923) $ (29,822) $ (171,211)
The provision for income taxes consists of the following:
Eleven Months Ended€
€December 31, Twelve Months Ended December 31,
2013 2014 2015
(in thousands)
Current
Federal $—$—$—
State and local 7 353 9
International 87 231 214
Total current income tax expense $94 $584 $223
Deferred
Federal (10,166)(9,996)(17,943)
State and local (2,027)(6,238)(2,174)
Valuation allowance 12,193 16,234 18,344
Total deferred income tax expense (benefit) $—$—$(1,773)
Total provision for (benefit from) income taxes $94 $584 $(1,550)
The provision for income taxes decreased by $2.1 million during the twelve months ended December 31, 2015 as a result
of benefits recognized from the valuation allowance release through acquisition accounting and state income taxes computed
without the benefit of stock options.
The following table presents a reconciliation of the statutory federal rate and our effective tax rate: