Rosetta Stone 2009 Annual Report Download - page 108

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Table of Contents
ROSETTA STONE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
15. INCOME TAXES (Continued)
Despite enacting certain tax planning strategies during the year ended December 31, 2009, neither subsidiary has produced sustainable pretax profits as of
December 31, 2009. Company management will monitor actual results and updated projections on a quarterly basis. When and if the subsidiaries realize or
realistically anticipate sustainable profitability, the Company will assess the appropriateness of releasing the valuation allowance in whole or in part. Although
management believes that these assets could ultimately be fully utilized, future performance cannot be assured.
The components of income (loss) before income taxes are as follows (in thousands):
Year Ended December 31,
2009 2008 2007
United States $ 19,030 $ 36,109 $ 14,825
Foreign 1,417 (8,782) (6,811)
Income before income taxes $ 20,447 $ 27,327 $ 8,014
The provision for taxes on income consists of the following (in thousands):
Year Ended December 31,
2009 2008 2007
Current:
Federal $ 7,555 $ 12,842 $ 5,311
State 1,864 2,788 1,429
Foreign 140 34 —
Total current $ 9,559 $ 15,664 $ 6,740
Deferred:
Federal $ (1,917) $ (1,946) $ (944)
State (430) (283) (361)
Foreign (128) — —
Total deferred (2,475) (2,229) (1,305)
Provision for income taxes $ 7,084 $ 13,435 $ 5,435
F-32