Juno 2014 Annual Report Download - page 22

Table of Contents
change in the future, such change may result in changes to our reporting units for impairment testing purposes, which may result in additional impairment
charges. In addition, from time to time, we record 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 and 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;
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