ServiceMagic 2012 Annual Report Download - page 71

IAC/INTERACTIVECORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Included in "Other current assets" in the accompanying consolidated balance sheet at December 31, 2012 and 2011 is a current deferred
tax asset of $20.3 million and $41.0 million , respectively, and included in "Other non-current assets" in the accompanying consolidated balance
sheet at December 31, 2012 and 2011 is a non-current deferred tax asset of $0.1 million and $1.4 million , respectively. In addition, included in
"Accrued expenses and other current liabilities" in the accompanying consolidated balance sheet at December 31, 2011 is a current deferred tax
liability of $0.4 million .
At December 31, 2012 , the Company has federal and state net operating losses ("NOLs") of $29.6 million and $92.1 million ,
respectively. If not utilized, the federal NOLs will expire at various times between 2023 and 2032, and the state NOLs will expire at various
times between 2013 and 2032. Utilization of federal NOLs will be subject to limitations under Section 382 of the Internal Revenue Code of
1986, as amended. In addition, utilization of certain state NOLs may be subject to limitations under state laws similar to Section 382 of the
Internal Revenue Code of 1986. At December 31, 2012, the Company has foreign NOLs of $46.5 million available to offset future income. Of
these foreign NOLs, $40.0 million can be carried forward indefinitely and $6.5 million will expire at various times between 2013 and 2032.
During 2012, the Company recognized tax benefits related to NOLs of $2.1 million . Included in this amount is $0.6 million of tax benefits of
acquired attributes which was recorded as a reduction in goodwill. At December 31, 2012 , the Company has $8.9 million of federal capital
losses and $248.4 million
of state capital losses. If not utilized, the federal and state capital losses will expire between 2013 and 2017. Utilization
of capital losses will be limited to the Company's ability to generate future capital gains.
At December 31, 2012 , the Company has tax credit carryforwards of $14.9 million . Of this amount, $4.6 million related to federal credits
for foreign taxes, $8.8 million related to state tax credits for research activities, and $1.4 million related to various state and local tax credits. Of
these credit carryforwards, $10.2 million can be carried forward indefinitely and $4.6 million will expire within ten years.
During 2012 , the Company's valuation allowance increased by $15.7 million primarily due to an unbenefited other-than-temporary
impairment and unrealized losses in long-term marketable equity securities included in accumulated other comprehensive income and an
increase in federal net operating losses. At December 31, 2012 , the Company has a valuation allowance of $60.8 million
related to the portion of
tax loss carryforwards and other items for which it is more likely than not that the tax benefit will not be realized.
A reconciliation of the income tax provision (benefit) to the amounts computed by applying the statutory federal income tax rate to
December 31,
2012
2011
(In thousands)
Deferred tax assets:
Accrued expenses
$
13,708
$
25,130
Net operating loss carryforwards
27,177
31,000
Tax credit carryforwards
5,095
10,518
Stock-based compensation
66,962
84,543
Income tax reserves, including related interest
60,596
57,016
Fair value investments
11,474
578
Equity method investments
13,809
12,850
Other
14,089
21,912
Total deferred tax assets
212,910
243,547
Less valuation allowance
(60,783
)
(45,084
)
Net deferred tax assets
152,127
198,463
Deferred tax liabilities:
Property and equipment
(6,018
)
(16,264
)
Investment in subsidiaries
(373,652
)
(374,282
)
Intangible and other assets
(60,830
)
(56,597
)
Other
(14,602
)
(11,437
)
Total deferred tax liabilities
(455,102
)
(458,580
)
Net deferred tax liability
$
(302,975
)
$
(260,117
)