Under Armour 2015 Annual Report Download - page 81

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Deferred tax assets and liabilities consisted of the following:
December 31,
(In thousands) 2015 2014
Deferred tax asset
Stock-based compensation $ 40,406 $ 35,161
Allowance for doubtful accounts and other reserves 33,821 24,774
Accrued expenses 19,999 11,398
Foreign net operating loss carryforward 19,600 16,302
Deferred rent 13,991 11,005
Inventory obsolescence reserves 11,956 8,198
Tax basis inventory adjustment 10,019 5,845
U. S. net operating loss carryforward 9,217 4,733
Foreign tax credits 6,151 5,131
State tax credits, net of federal tax impact 4,966 4,245
Deferred compensation 2,080 1,858
Other 6,346 4,592
Total deferred tax assets 178,552 133,242
Less: valuation allowance (24,043) (15,550)
Total net deferred tax assets 154,509 117,692
Deferred tax liability
Property, plant and equipment (31,069) (17,638)
Intangible assets (22,820) (7,010)
Prepaid expenses (8,766) (6,424)
Other (627) (612)
Total deferred tax liabilities (63,282) (31,684)
Total deferred tax assets, net $ 91,227 $ 86,008
In connection with the Company’s acquisition of MyFitnessPal (see Note 3), the Company acquired $21.1
million in deferred tax assets associated with approximately $89.1 million in federal and state net operating loss
(“NOLs”) carryforwards and $1.4 million in tax credit carryforwards. The acquisition resulted in a “change of
ownership” within the meaning of Section 382 of the Internal Revenue Code, and, as a result, such NOLs are
subject to an annual limitation.
As of December 31, 2015, the Company had $9.9 million in deferred tax assets associated with
approximately $60.4 million in federal and state net operating losses and $1.4 million in tax credit carryforwards
from the acquisition of MyFitnessPal remaining, which will expire beginning 2033 through 2035. Based upon the
historical taxable income and projections of future taxable income over periods in which these NOLs will be
deductible, the Company believes that it is more likely than not that the Company will be able to fully utilize
these NOLs before the carry-forward periods expire beginning 2033 through 2035, and therefore a valuation
allowance is not required.
As of December 31, 2015, the Company had $19.6 million in deferred tax assets associated with
approximately $75.3 million in foreign net operating loss carryforwards, which will expire beginning 2017
through 2021. As of December 31, 2015, the Company believes certain deferred tax assets associated with
foreign net operating loss carryforwards will expire unused based on the Company’s projections. Therefore, a
valuation allowance of $6.8 million was recorded against the Company’s net deferred tax assets in 2015.
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