Enom 2010 Annual Report Download - page 127
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Table of Contents
Demand Media, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(In thousands, except per share amounts)
10. Income Taxes (Continued)
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities as of December 31,
2009 and 2010 are presented below:
2009 2010
Deferred tax assets
Accrued liabilities not currently deductible $ 3,404 $ 5,424
Intangible assets—excess of financial statement amortization over tax 8,045 9,352
Indirect federal impact of deferred state taxes 652 678
Deferred revenue 4,262 4,973
Net operating losses 26,113 22,532
Stock-based compensation 896 3,783
Other 228 394
43,600 47,136
Deferred tax liabilities
Deferred registration costs (13,078) (16,461)
Prepaid expenses (1,892) (2,009)
Goodwill not amortized for financial reporting (10,745) (14,155)
Intangible assets—excess of financial statement basis over tax basis (13,051) (9,201)
Property and equipment (4,822) (5,292)
(43,588) (47,118)
Valuation allowance (11,436) (14,421)
Net deferred tax liabilities $ (11,424)$ (14,403)
Current $(13,339)$ (15,248)
Noncurrent 1,915 845
$(11,424)$ (14,403)
The Company had federal net operating loss ("NOL") carryforwards of approximately $72,000 and $62,000 as of December 31, 2009 and 2010,
respectively, which expire between 2020 and 2029. In addition, as of December 31, 2009 and 2010 the Company had state NOL carryforwards of
approximately $10,000, which expire between 2013 and 2029.
Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, provide for annual limitations on the utilization of net operating loss and credit
carryforwards if the Company were to undergo an ownership change, as defined in Section 382. Changes in the Company's equity structure and the
acquisitions by the Company of eNom, Trails, Maps a La Carte, Pagewise and Pluck resulted in such an ownership change. Currently, the Company does not
expect the utilization of its net operating loss and tax credit carry-forwards in the near term to be materially affected as no significant limitations are expected
to be placed on these carry-forwards as a result of its previous ownership changes.
F-31