8. Income Taxes

Net operating losses – U.S.

The Company has generated net operating losses for tax purposes (“NOLs”). The following table summarizes the activity for NOLs for the six months ended June 30, 2016:


December 31, 2015	$	(26,070	)
U.S. GAAP pretax income		37,534
State income taxes		(718	)
Impact of 382 limit		(3,324	)
Income tax differences:
Temporary		(21,937	)
Permanent		6,832

June 30, 2016	$	(7,683	)

During the quarter ended June 30, 2016, the remaining balance of $17,863 of NOLs that were generated from stock-based compensation amounts recognized for tax purposes at the time options are exercised (at the intrinsic value) or restricted stock is vested (at fair value of the share price) in excess of amounts previously expensed at the date of grant for U.S. GAAP purposes were utilized to reduce the Company’s tax liability with a corresponding credit to additional paid-in capital.

A summary of the components of the gross and tax affected deferred tax asset as of June 30, 2016 is as follows:


Stock-based compensation	$	9,899
Deferred rent liability		5,366
NOLs		4,195
Accrued expenses		5,050
Incentive compensation		(5,330	)
Fixed assets		(5,865	)
Other		(104	)

Total U.S. deferred components		13,211
U.S. income tax rate		38.74	%

U.S. tax affected		5,118

Japan		238

Total tax affected	$	5,356

Net operating losses – Non-U.S.

The Company’s foreign subsidiaries generated NOLs outside the U.S. The following table summarizes the activity for these NOLs for the six months ended June 30, 2016:


December 31, 2015	$	(10,746	)
Foreign subsidiaries loss		(4,994	)

June 30, 2016	$	(15,740	)

At June 30, 2016 and December 31, 2015, a deferred tax asset related to these NOLs has been fully offset by a valuation allowance of $2,983 and $2,051, respectively.