LogMeIn, Inc. - 10-K filing on 2014-03-10

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

The domestic and foreign components of income before provision for income taxes are as follows (in thousands):


	Years Ended December 31,
	2011		2012			2013
Domestic	$	9,423	$	7,789		$	10,389
Foreign		372		(1,532	)		(11,857	)

Total income (loss) before provision for income taxes	$	9,795	$	6,257		$	(1,468	)

The provision for income taxes is as follows (in thousands):


	Years Ended December 31,
	2011			2012			2013
Current
Federal	$	5,477		$	8,324		$	5,480
State		235			1,181			1,346
Foreign		140			126			952

Total		5,852			9,631			7,778

Deferred
Federal		(2,022	)		(4,926	)		(1,379	)
State		188			44			(177	)
Foreign		16			(2,058	)		(8	)

Total		(1,818	)		(6,940	)		(1,564	)

Total provision for income taxes	$	4,034		$	2,691		$	6,214

A reconciliation of the Company’s effective tax rate to the statutory federal income tax rate is as follows:


	For the Years Ended December 31,
	2011			2012			2013
Statutory tax rate		35.0	%		35.0	%		35.0	%
Change in valuation allowance		—			(10.8	)		—
Impact of permanent differences		4.6			15.6			(82.3	)
Foreign tax rate differential		0.3			(11.5	)		(346.9	)
Research and development credits		(2.6	)		—			23.1
State taxes, net of federal benefit		3.4			13.8			(51.9	)
Impact of uncertain tax positions		2.0			0.8			(3.6	)
Other		(1.5	)		0.1			3.4

Effective tax rate		41.2	%		43.0	%		(423.2	)%

The Company has deferred tax assets related to temporary differences and operating loss carryforwards as follows (in thousands):


	December 31,
	2012			2013
Deferred tax assets:
Net operating loss carryforwards	$	3,222		$	2,375
Deferred revenue		1,715			627
Amortization		897			1,211
Research and development credit carryforwards		383			404
Bad debt reserves		71			56
Stock compensation associated with non-qualified awards		8,242			10,423
Depreciation		—			326
Other		2,136			2,369

Total deferred tax assets		16,666			17,791
Deferred tax asset valuation allowance		(2,463	)		(2,836	)

Net deferred tax assets		14,203			14,955

Deferred tax liabilities:
Depreciation		(313	)		(1,212	)
Goodwill amortization		(655	)		(1,236	)
Other		—			(14	)

Total deferred tax liabilities		(968	)		(2,462	)

Total	$	13,235		$	12,493

The Company has provided liabilities for uncertain tax provisions as follows (in thousands):


	Years Ended December 31,
	2012		2013
Beginning balance	$	198	$	251
Gross decreases — tax positions in prior period		—		—
Gross increases — tax positions in current period		53		53

Ending balance	$	251	$	304