Stamps.com 2015 Annual Report Download - page 71

Year Ended December 31,
2015 2014 2013
Net(loss)income $ (4,198) $ 36,882 $ 44,153
      
Basic-weightedaveragecommonshares  16,436  16,011  15,691
Dilutiveeffectofcommonstockequivalents  —(1)  406  607
Diluted-weightedaveragecommonshares  16,436  16,417  16,298
      
Net(loss)incomepershare:      
Basic $ (0.26) $ 2.30 $ 2.81
Diluted $ (0.26) $ 2.25 $ 2.71
TABLE OF CONTENTS
STAMPS.COM INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
Internet Advertising
WerecognizeInternetadvertisingexpensebasedonthespecificsoftheindividualagreements.Underpartnerandaffiliate
agreements,thirdpartiesreferprospectstoourwebsite,andwepaythethirdpartieswhenthecustomercompletesthecustomer
registrationprocess,orinsomecases,uponthefirstsuccessfulbillingofacustomer.Werecordtheseexpensesonamonthlybasisas
prospectsaresuccessfullyconvertedtocustomers.UnderInternetsearchadvertising,werecordexpensesbasedonactual“click
activity”onourdisplayedadvertisementsfollowingtargetedkeywordsearches.
General and Administrative
Generalandadministrativeexpenseprincipallyconsistsofcompensationandrelatedcostsforexecutiveandadministrative
personnel,feesforlegalandotherprofessionalservices,depreciationofequipmentandsoftwareusedforgeneralcorporatepurposes
andamortizationofintangibleassets.
Income Taxes
WeaccountforincometaxesinaccordancewithFinancialAccountingStandardsBoard(“FASB”)ASCTopicNo.740,Income
Taxes(“ASC740”),whichrequiresthatdeferredtaxassetsandliabilitiesberecognizedusingenactedtaxratesfortheeffectof
temporarydifferencesbetweenthebookandtaxbasisofrecordedassetsandliabilities.ASC740alsorequiresthatdeferredtaxassets
bereducedbyavaluationallowanceifitismorelikelythannotthatsomeorallofthenetdeferredtaxassetswillnotberealized.We
recordavaluationallowancetoreduceourgrossdeferredtaxassets,whichareprimarilycomprisedofU.S.FederalandStatetaxloss
carry-forwards,totheamountthatismorelikelythannot(alikelihoodofmorethan50percent)toberealized.Inorderforustorealize
ourdeferredtaxassets,wemustbeabletogeneratesufficienttaxableincome.Weevaluatetheappropriatenessofourdeferredtax
assetsandrelatedvaluationallowanceinaccordancewithASC740basedonallavailablepositiveandnegativeevidence.Asof
December31,2015and2014wedonothaveanyvaluationallowancerecordedtoreduceourgrossdeferredtaxassetsaswebelieve
wehavemetthemorelikelythannotthresholdwewillrealizeourtaxlosscarry-forwardsintheforeseeablefuture.
Net (loss) Income per Share
Net(loss)incomepersharerepresentsnetincomeattributabletocommonstockholdersdividedbytheweightedaveragenumber
ofcommonsharesoutstandingduringareportedperiod.Thedilutednetincomepersharereflectsthepotentialdilutionthatcouldoccur
ifsecuritiesorothercontractstoissuecommonstock,includingstockoptions(commonlyandhereafterreferredtoas“commonstock
equivalents”),wereexercisedorconvertedintocommonstock.Dilutednetincomepershareiscalculatedbydividingnet(loss)income
duringareportedperiodbythesumoftheweightedaveragenumberofcommonsharesoutstandingpluscommonstockequivalentsfor
theperiod.
Thefollowingtablereconcilesshareamountsutilizedtocalculatebasicanddilutednet(loss)incomepershare(inthousands,
exceptpersharedata):
(1) Commonequivalentsharesareexcludedfromthediluted(loss)earningspersharecalculationastheireffectisanti-dilutive.The
sharesrelatedtothe2015contingentconsiderationarenotincludedbecausetheyareanti-dilutive.
F-12