Zynga 2013 Annual Report Download - page 94

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Table of Contents
In determining the need for a valuation allowance, we weigh both positive and negative evidence in the various taxing jurisdictions in
which it operates to determine whether it is more likely than not that deferred tax assets are recoverable. In assessing the ultimate realizability of
net deferred tax assets, we consider our past performance, available tax strategies, and expected future taxable income. At December 31, 2013
and December 31, 2012, we recorded a valuation allowance of $92.1 million and $90.4 million, respectively, against our net deferred tax assets,
as we believe it is more likely than not that these benefits will be not be realized.
Net operating loss and tax credit carryforwards as of December 31, 2013 are as follows (in thousands):
Pursuant to authoritative guidance, the benefit of stock options will only be recorded to stockholders’ equity when cash taxes payable is
reduced. As of December 31, 2013, the portion of net operating loss carryforwards related to stock options is approximately $397.1 million, the
benefit of which will be credited to additional paid-in capital when realized. The federal and state net operating loss carryforwards are subject to
various annual limitations under Section 382 of the Internal Revenue Code.
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):
As of December 31, 2013, of that amount, approximately $61.8 million represents the amount of unrecognized tax benefits that would, if
recognized, impact our effective income tax rate.
90
Year Ended December 31,
2013
2012
Recorded as:
Current deferred tax assets
$
16,293
$
30,122
Non
-
current deferred tax assets
7,424
—
Non
-
current deferred tax liabilities
—
(
24,584
)
Net deferred tax assets
$
23,717
$
5,538
Amount
Expiration years
Net operating losses, federal
$
283,150
2029
-
2033
Net operating losses, state
$
203,175
2022
-
2033
Tax credit, federal
$
73,560
2021
-
2023
Tax credits, state
$
43,662
2018
-
indefinite
Net operating losses, foreign
$
—
2018
-
2020
Tax credits, foreign
$
—
2018
-
2019
December 31, 2010
$
15,183
Additions based on tax positions related to 2011
30,841
Additions for tax positions of prior years
2,318
Reductions for tax positions of prior years
(9
)
December 31, 2011
48,334
Additions based on tax positions related to 2012
51,222
Reductions for tax positions of prior years
(835
)
December 31, 2012
98,721
Additions based on tax positions related to 2013
16,414
Additions for tax positions of prior years
18,356
December 31, 2013
$
133,491