Digital River 2006 Annual Report Download - page 97
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The provision (benefit) for income taxes is composed of the following (in thousands):
2006 2005 2004
Year Ended December 31,
As Restated(1) As Restated(1)
Current tax expense (benefit):
United States federal ............................ $34,362 $ 20,825 $ —
State and local ................................ 2,160 1,484 —
International .................................. 2,915 3,825 1,079
Total current provision for income taxes.............. 39,437 26,134 1,079
Deferred tax expense (benefit):
United States federal ............................ (10,136) (10,288) —
State and local ................................ (637) (647) —
International .................................. 8 (324) —
Total deferred provision (benefit) for income taxes ...... (10,765) (11,259) —
Provision for income taxes........................ $28,672 $ 14,875 $1,079
(1) See Note 2, “Restatement of Consolidated Financial Statements,” in Notes to Consolidated Financial
Statements.
The following is a reconciliation of the difference between the actual provision for income taxes and the
provision computed by applying the federal statutory rate of 35% to income before income taxes (in
thousands):
2006 2005 2004
Year Ended December 31,
As Restated(1) As Restated(1)
Tax expense at statutory rate ....................... $31,319 $ 24,986 $ 12,455
State taxes, net of federal benefit ................... 1,469 1,359 1,484
International rate differential ....................... (3,193) (1,561) 128
Tax Credits ................................... (1,909) — —
Non-deductible goodwill and earn-out compensation ..... — — 183
Nondeductible expense and other ................... 986 1,801 1,012
Change in valuation allowance ..................... — (11,710) (14,183)
Total ........................................ $28,672 $ 14,875 $ 1,079
(1) See Note 2, “Restatement of Consolidated Financial Statements,” in Notes to Consolidated Financial
Statements.
93
DIGITAL RIVER, INC.
Notes to Consolidated Financial Statements — (Continued)