LeapFrog 2012 Annual Report Download - page 59
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LEAPFROG ENTERPRISES, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share data)
Employee-related expense accruals increased primarily due to greater achievement against Company
performance targets set as a part of the Company’s employee bonus programs for 2012 as compared to 2011.
10. Income Taxes
The Company’s income before taxes included the following components:
Years Ended December 31,
2012 2011 2010
United States ............................... $58,375 $15,430 $3,367
Foreign ................................... 3,573 3,335 2,608
Total ................................... $61,948 $18,765 $5,975
The components of the provision for (benefit from) income taxes were as follows:
Years Ended December 31,
2012 2011 2010
Current:
Federal ................................. $ 4 $ 4 $ (79)
State ................................... 140 40 (88)
Foreign ................................. (5,054) (1,734) 404
Total current ........................... (4,910) (1,690) 237
Deferred:
Federal ................................. (19,796) 314 314
State ................................... (1,278) 6 29
Foreign ................................. 1,480 233 450
Total deferred .......................... (19,594) 553 793
Grand total .......................... $(24,504) $(1,137) $1,030
The differences between the provision for income taxes and the income tax determined by applying the
statutory federal income tax rate of 35% were as follows:
Years Ended December 31,
2012 2011 2010
Income tax provision at the statutory rate ......... $21,682 $ 6,568 $ 2,091
State income taxes ......................... 2,946 818 1,160
Foreign tax rate differential .................... (265) (327) (265)
Interest and penalties ........................ 276 446 285
Nondeductible items ........................ 866 542 110
Release of unrecognized tax benefit .............. (6,412) (2,917) (453)
Change in valuation allowance ................. (43,638) (6,680) (2,245)
Other .................................. 41 413 347
Income tax (benefit) provision ............... $(24,504) $(1,137) $ 1,030
State income tax expense included interest and penalties of $0 for 2012, 2011 and 2010. The tax benefit for
2012 includes a $6,412 benefit from the recognition of previously unrecognized tax benefits, including $2,045
of accrued interest and penalties, due to expiring statute of limitations. The tax benefit for 2011 includes a
$2,917 benefit from the recognition of previously unrecognized tax benefits, including $961 of accrued interest
and penalties, due to expiring statute of limitations. The recognition of these benefits decreased other
long-term liabilities. The Company realized $23,298, $8,753 and $1,988 of previously unrecognized income
tax benefit attributable to domestic net operating loss and tax credit carryforwards for 2012, 2011 and 2010,
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