8x8 2016 Annual Report Download - page 47

Download and view the complete annual report

Please find page 47 of the 2016 8x8 annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 149

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149

GAINONPATENTSALE
Years Ended March 31, Year-over-Year Change
2016 2015 2014 2015 to 2016 2014 to 2015
(dollaramountsinthousands)
Gain on patent sale $ - $ (1,000) $ - $ 1,000 100.0% $ (1,000) 100.0%
Percentage of total revenue 0.0% -0.6% 0.0%
In June 2012, we entered into a patent purchase agreement for the sale of a family of United States patents. We recognized a gain of slightly less than $12.0
million, net of transaction costs, in the first fiscal quarter of 2013, approximately $1.0 million in the fourth fiscal quarter of 2013, and approximately $1.0 million
in the second fiscal quarter of 2015 due to the third party purchaser entering into a license agreement with its customer. The gain on patent sale has been recorded
as a reduction of operating expenses in the consolidated statements of operations.
INTERESTINCOMEANDOTHER,NET
Years Ended March 31, Year-over-Year Change
Years Ended March 31, Year-over-Year Change
2016 2015 2014 2015 to 2016 2014 to 2015
(dollaramountsinthousands)
Interest income and other, net $ 1,107 $ 833 $ 742 $ 274 32.9% $ 91 12.3%
Percentage of total revenue 0.5% 0.5% 0.6%
This item primarily consisted of interest income earned on our cash, cash equivalents and investments and amortization or accretion of investments in fiscal 2016,
2015 and 2014.
(BENEFIT)PROVISIONFORINCOMETAXES
Years Ended March 31, Year-over-Year Change
2016 2015 2014 2015 to 2016 2014 to 2015
(dollaramountsinthousands)
(Benefit) provision for income taxes $ (847) $ 2,789 $ 2,219 $ (3,636) -130.4% $ 570 25.7%
Percentage of total revenue -0.4% 1.7% 1.7%
We recorded an income tax benefit of ($0.8) million in fiscal year 2016, all of which related to net loss from operations. During the fourth quarter of fiscal 2016,
we evaluated the need for a valuation allowance against our net deferred tax assets and determined that a decrease of $1.1 million was needed as certain California
net operating losses carryforwards having expired in fiscal 2016.
We recorded an income tax provision of $2.8 million in fiscal year 2015, all of which related to net income from operations. During the fourth quarter of fiscal
2015, we evaluated the need for a valuation allowance against our net deferred tax asset and determined that a decrease of $1.5 million was needed as certain
California net operating losses carryforwards having expired in fiscal 2015.
At March 31, 2016, we had net operating loss carryforwards for federal and state income tax purposes of approximately $137.9 million and $38.7 million,
respectively that expire at various dates between 2017 and 2036. In addition, at March 31, 2016, we had research and development credit carryforwards for federal
and state tax reporting purposes of approximately $4.5 million and $6.2 million, respectively. The federal income tax credit carryforwards will expire between
2021 and 2036, while the California income tax credit will carry forward indefinitely. Under the ownership change limitations of the Internal Revenue Code of
1986, as amended, the amount and benefit from the net operating losses and credit carryforwards may be limited in certain circumstances.
43