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F-22
Taxes
From time to time, various federal, state and other jurisdictional tax authorities undertake reviews of the Company and its
filings. In evaluating the exposure associated with various tax filing positions, we accrue charges for possible exposures. We believe
any adjustments that may ultimately be required as a result of any of these reviews will not be material to our consolidated financial
statements.
Indemnifications
In the normal course of business, we have provided certain indemnities, commitments and guarantees under which we may be
required to make payments in relation to certain transactions. These indemnities include intellectual property indemnities to our
customers, indemnities to our directors and officers to the maximum extent permitted under the laws of the State of Delaware,
indemnifications related to our lease agreements and indemnifications to sellers or buyers in connection with acquisitions and
dispositions, respectively. In addition, our advertiser and distribution partner agreements contain certain indemnification provisions
which are generally consistent with those prevalent in our industry. We have not incurred significant obligations under
indemnification provisions historically and do not expect to incur significant obligations in the future. Accordingly, we have not
recorded any liability for these indemnities, commitments and guarantees in the accompanying balance sheets.
9. Income Taxes
Income (loss) before income taxes from continuing operations consisted of the following (in thousands):
2014
2013
2012
Domestic ......................................................................................................... $ (267,758) $ (11,555) $ (4,042)
Foreign ............................................................................................................ (3,104) 193 129
Loss from continuing operation before income taxes ................................... $ (270,862) $ (11,362) $ (3,913)
The income tax benefit (expense) from continuing operations consisted of the following (in thousands):
2014
2013
2012
Current (expense) benefit:
Federal ............................................................................................................ $ - $ - $-
State ................................................................................................................ (58) (276) 285
International .................................................................................................... (99) (69) 105
Deferred (expense) benefit:
Federal ............................................................................................................ 14,028 (2,136) (2,042)
State ................................................................................................................ 831 (398) 719
International .................................................................................................... 11 23 (18)
Total income tax benefit (expense) from continuing operations .................. $ 14,713 $ (2,856) $ (951)
The reconciliation of the federal statutory income tax rate of 35% to our effective income tax rate from continuing operations is
as follows (in thousands):
2014
2013
2012
Expected income tax benefit (expense) at U.S. statutory rate ......................... $ 94,801 $ 3,977 $ 1,370
Difference between U.S. and foreign taxes ..................................................... 21 12 9
State tax (expense) benefit, net of federal taxes .............................................. 4,828 (131) (312)
N
on-deductible stock-based compensation ..................................................... (3,845) (2,832) (994)
Meals and entertainment ................................................................................. (129) (266) (276)
Goodwill impairment ...................................................................................... (25,841) - -
N
on-deductible officer compensation ............................................................. (43) - -
State rate changes ............................................................................................ (865) (253) 1,521
Indirect federal impact of state deferred taxes ................................................ - 110 (223)
Valuation allowance ........................................................................................ (53,463) (3,648) (2,019)
Other ............................................................................................................... (751) 175 (27)
Total income tax expense from continuing operations ................................. $ 14,713 $ (2,856) $ (951)