Yahoo 1998 Annual Report Download - page 56

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No provision for federal and state income taxes for 1997 and 1996 has been recorded
as the Company incurred net operating losses for these periods.
The provision for income taxes differs from the amount computed by applying the
statutory federal income tax rate as follows (in thousands):
Year Ended December 31,
1998 1997 1996
Income tax at the federal statutory
rate of 35% $ 15,195 $ (8,010) $ (817)
State income tax, net of federal benefit 1,937 (1,626) (112)
Non-deductible acquisition-related
charges 8,521 ––
Research tax credits (1,155) ––
Change in valuation allowances (6,770) 8,175 864
Other 99 1,461 65
$ 17,827 $–$–
Deferred income taxes reflect the tax effects of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and the
amounts used for income tax purposes. The components of the net deferred income
tax assets are as follows (in thousands):
Year Ended December 31,
1998 1997 1996
Deferred income tax assets:
Net operating loss and credit
carryforwards $ 148,249 $ 25,512 $ 4,303
Nondeductible reserves and
expenses 4,443 3,667 1,468
Gross deferred tax assets 152,692 29,179 5,771
Valuation allowance (135,063) (29,179) (5,771)
17,629 ––
Deferred income tax liabilities:
Unrealized investment gains (12,796) ––
Intangible assets (4,833) ––
Gross deferred tax liabilities (17,629) ––
$–$–$–
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