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Income Taxes | 12 Months Ended
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Dec. 31, 2014
Income Taxes | Note 16. Income Taxes U.S and foreign components of consolidated loss before income taxes for the years ended December 2014, 2013 and 2012, was as follows (in thousands):
|  | Year Ended December 31, |
|  | 2014 |  |  | 2013 |  |  | 2012 |
Loss before income taxes: |  |  |  |  |  |  |  |  |  |  |  |
U.S. |  | $ | (38,928 | ) |  | $ | (44,035 | ) |  | $ | (16,360 | )
Foreign |  |  | 368 |  |  |  | 916 |  |  |  | 685 |
Loss before income taxes |  | $ | (38,560 | ) |  | $ | (43,119 | ) |  | $ | (15,675 | )
The provision for income taxes for the years ended December 2014, 2013 and 2012, was as follows (in thousands):
|  | Year Ended December 31, |
|  | 2014 |  |  | 2013 |  |  | 2012 |
Provision for income taxes: |  |  |  |  |  |  |  |  |  |  |  |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Foreign |  | $ | 168 |  |  | $ | 191 |  |  | $ | 180 |
Federal |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
State |  |  | 1 |  |  |  | 0 |  |  |  | 0 |
Total Current |  |  | 169 |  |  |  | 191 |  |  |  | 180 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Foreign |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Federal |  |  | 22 |  |  |  | 21 |  |  |  | 48 |
State |  |  | 4 |  |  |  | 6 |  |  |  | 14 |
Total Deferred |  |  | 26 |  |  |  | 27 |  |  |  | 62 |
Provision for income taxes |  | $ | 195 |  |  | $ | 218 |  |  | $ | 242 |
The difference between the provision for income taxes and the amount computed by applying the federal statutory income tax rate to loss before taxes for the years ended December 31, 2014, 2013 and 2012, was as follows (in thousands):
|  | Year Ended December 31, |
|  | 2014 |  |  | 2013 |  |  | 2012 |
Federal statutory tax |  | $ | (13,110 | ) |  | $ | (14,661 | ) |  | $ | (5,329 | )
Stock-based compensation |  |  | (8 | ) |  |  | (10 | ) |  |  | 99 |
Lobbying expenses |  |  | 33 |  |  |  | 107 |  |  |  | 51 |
Warrants |  |  | (3,367 | ) |  |  | 4,926 |  |  |  | (706 | )
Foreign rate differential |  |  | 43 |  |  |  | (121 | ) |  |  | (53 | )
Expiration of federal net operating losses and credits—tax effected |  |  | 0 |  |  |  | 0 |  |  |  | 4,352 |
Change in valuation allowance |  |  | 16,576 |  |  |  | 9,955 |  |  |  | 1,809 |
Other |  |  | 28 |  |  |  | 22 |  |  |  | 19 |
Provision for income taxes |  | $ | 195 |  |  | $ | 218 |  |  | $ | 242 |
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes at the enacted rates. The significant components of the Company’s deferred tax assets at December 31, 2014 and 2013, were as follows (in thousands):
|  | December 31, |
|  | 2014 |  |  | 2013 |
Deferred tax assets: |  |  |  |  |  |  |  |
Net operating loss carryforwards |  | $ | 151,100 |  |  | $ | 142,500 |
Research and development credit carryforwards |  |  | 33,800 |  |  |  | 32,100 |
Capitalized research and development |  |  | 15,500 |  |  |  | 12,300 |
Deferred compensation |  |  | 5,800 |  |  |  | 4,900 |
Capital loss carryforwards |  |  | 3,700 |  |  |  | 3,900 |
Other |  |  | 3,200 |  |  |  | 3,300 |
Total deferred tax assets |  |  | 213,100 |  |  |  | 199,000 |
Valuation allowance |  |  | (213,100 | ) |  |  | (199,000 | )
Net deferred tax assets |  |  | 0 |  |  |  | 0 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Amortization of goodwill |  |  | 115 |  |  |  | 89 |
Total deferred tax liabilities |  | $ | 115 |  |  | $ | 89 |
The valuation allowance increased by $14.1 million for the year ended December 31, 2014, compared to the increase of $8.5 million and a decrease of $0.8 million for the years ended December 31, 2013 and 2012, respectively. The Company believes that, based on a number of factors, the available objective evidence creates sufficient uncertainty regarding the realizability of the deferred tax assets such that a full valuation allowance has been recorded. These factors include the Company’s history of net losses since its inception, the need for regulatory approval of the Company’s products prior to commercialization, expected near-term future losses and the absence of taxable income in prior carryback years. The Company expects to maintain a full valuation allowance until circumstances change. Undistributed earnings of the Company’s foreign subsidiary, Cerus Europe B.V., amounted to approximately $4.6 million at December 31, 2014. The earnings are considered to be permanently reinvested and accordingly, no deferred U.S. income taxes have been provided thereon. Upon distribution of those earnings in the form of dividends or otherwise, the Company would be subject to U.S. income taxes. The unrecognized deferred tax liability for unrepatriated earnings at December 31, 2014, was approximately $1.7 million. In the event all foreign undistributed earnings were remitted to the U.S., any incremental tax liability would be fully offset by the Company’s domestic net operating loss. For the year ended December 31, 2014, the Company reported pretax net losses of $38.6 million on its consolidated statement of operations and calculated taxable losses for both federal and state taxes. The difference between reported net loss and taxable loss are due to temporary differences between book accounting and the respective tax laws. At December 31, 2014, the Company had federal and state net operating loss carryforwards of approximately $416 million and $255 million, respectively. The net operating loss carryforwards for federal and state expire at various dates beginning in 2015 through 2034. The Company’s net operating losses do not include $2.2 million related to windfall tax deductions associated with stock based compensation. The stock based compensation windfall deductions, if utilized, would serve to reduce any income taxes payable. At December 31, 2014, the Company had federal research and development credit carryforwards of approximately $22.5 million that expire in various years between 2018 and 2034. The state research and development credits are approximately $17.1 million as of December 31, 2014, have an indefinite carryover period. The utilization of net operating loss carryforwards, as well as research and development credit carryforwards, is limited by current tax regulations. These net operating loss carryforwards, as well as research and development credit carryforwards, will be utilized in future periods if sufficient income is generated. The Company believes it more likely than not that its tax positions would be recognized upon review by a taxing authority having full knowledge of all relevant information. The Company’s ability to utilize certain loss carryforwards and certain research credit carryforwards are subject to limitations pursuant to the ownership change rules in accordance with Section 382 of the Internal Revenue Code of 1986 and with Section 383 of the Internal Revenue Code of 1986, as well as similar state provisions. The Company will recognize accrued interest and penalties related to unrecognized tax benefits in its income tax expense. To date, the Company has not recognized any interest and penalties in its consolidated statements of operations, nor has it accrued for or made payments for interest and penalties. The Company had no unrecognized tax benefits as of December 31, 2014 and 2013. The Company’s tax years 2010 through 2013 remain subject to examination by the taxing jurisdictions due to unutilized net operating losses and research credits.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
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