Juno 2013 Annual Report Download - page 24

Table of Contents
tangible or intangible assets on our balance sheet that, due to changes in value or in our strategy, may have to be expensed in future periods. Write-
downs or impairments of assets, whether tangible or intangible, could adversely and materially impact our financial condition and results of operations.
Foreign, state and local governments may attempt to impose additional income taxes, sales and use taxes, value added taxes or other taxes on our
business activities and Internet-based transactions, including our past sales, which could decrease our ability to compete, reduce our sales, or
have a material adverse effect on our business, financial condition, results of operations, and cash flows.
We are subject to income and various other taxes in the U.S. and numerous foreign jurisdictions. Significant judgment is required in evaluating our
consolidated provision for income taxes. During the ordinary course of business, there are many transactions for which the ultimate tax determination is
uncertain. In addition, our effective income tax rates could be adversely affected by earnings being less than anticipated in countries where we have
lower statutory rates and more (or determined to be more by a particular taxing jurisdiction) than anticipated in countries where we have higher statutory
rates, by changes in the valuation of our deferred tax assets and liabilities, by increases in the applicable tax rates, or by, among other factors, changes in
the relevant tax, accounting and other laws, regulations, principles, and interpretations. We are under audit and subject to audit in various jurisdictions,
and such jurisdictions may assess additional income and other taxes against us. For example, we are under an Internal Revenue Service audit which, if
finally determined in an unfavorable manner, could result in a significant liability. Although we believe our tax estimates are reasonable, the final
determination of tax audits and any related litigation could be materially different from our historical income tax provisions, and our historical
recognition of other tax matters. The results of an audit or litigation could have a material adverse effect on our business, financial condition, results of
operations, and cash flows.
In connection with our Internet-based transactions, a number of states, including California, have adopted or have been considering legislation or
policy initiatives, including those that would facilitate a finding of nexus to exist between Internet companies with the states, aimed at expanding the
reach of sales and use taxes or imposing state income or other taxes on various innovative theories, including agency attribution from independent third-
party service providers. Such legislation or initiatives could result in the imposition of additional sales and use taxes, or the payment of state income or
other taxes, on certain transactions conducted over the Internet. Our costs may increase as a result of our activities related to advertisers and other third
parties, and advertisers and other third parties may choose to not do business with us or limit their business activities, in order to avoid nexus with
certain states. If such legislation is enacted, or such initiatives are instituted, and unless overturned by the courts, the legislation or initiatives could
subject us to substantially increased tax liabilities for past and future sales or state income or other taxes, require us to collect additional sales and use
taxes, cause our future sales to decrease, or otherwise negatively impact our business, financial condition, results of operations, and cash flows, and
thus have a material adverse effect on us.
We face risks relating to operating and doing business internationally that could adversely affect our businesses and results of operations.
Our businesses operate in a number of countries outside the U.S. Conducting international operations involves risks and uncertainties, including:
•adverse fluctuations in foreign currency exchange rates;
•potentially adverse tax consequences, including the complexities of foreign value added taxes and restrictions on the repatriation of
earnings;
•increased financial accounting, tax and reporting burdens and complexities;
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