Income Taxes
 12 Months Ended
Dec. 31, 2014
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes
The reconciliation of income tax computed at the federal statutory tax rate to the benefit for income taxes from continuing operations is as follows (in thousands):
 
Years ended December 31,
 
2014
 
2013
 
2012
Tax at statutory rate
$
(7,713
)
 
$
(38,821
)
 
$
(41,291
)
State taxes, net of federal benefit
(375
)
 
(6,399
)
 
(4,868
)
Change in valuation allowance
(640
)
 
216,586

 
668

Federal and state net operating losses, (addition) removal of limitations
(2,882
)
 
(173,288
)
 
42,121

Share-based compensation
4,366

 
2,761

 
2,597

Credits and other
(432
)
 
(2,192
)
 
89

Income tax benefit
$
(7,676
)
 
$
(1,353
)
 
$
(684
)

Income tax benefit from continuing operations consists of the following (in thousands):
 
Years ended December 31,
 
2014
 
2013
 
2012
Current:
 
 
 
 
 
Federal
$
(7,713
)
 
$
(1,491
)
 
$
(629
)
State
(279
)
 
(200
)
 
2

Foreign
69

 
(79
)
 
21

Total current tax benefit provision
(7,923
)
 
(1,770
)
 
(606
)
Deferred:
 
 
 
 
 
Federal
203

 
335

 
(71
)
State
44

 
82

 
(7
)
Total deferred tax provision (benefit)
247

 
417

 
(78
)
Income tax benefit
$
(7,676
)
 
$
(1,353
)
 
$
(684
)

In addition, current income tax expense of $8.1 million, $1.7 million and $0.4 million from discontinued operations was recorded for the years ended December 31, 2014, 2013 and 2012, respectively.
Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of deferred tax assets and liabilities are shown below. A full valuation allowance has been recorded, as realization of such assets is uncertain (in thousands):
 
As of December 31,
 
2014
 
2013
Deferred tax assets:
 
 
 
Net operating loss carryforwards
$
189,140

 
$
195,634

Capitalized research expenses and credits
21,555

 
21,874

Depreciation
3,169

 
2,870

Stock options
8,745

 
9,033

Accruals and reserves
4,400

 
6,248

Deferred revenue and other, net
8,797

 
815

Total deferred tax assets
235,806

 
236,474

Valuation allowance
(235,773
)
 
(236,413
)
Deferred tax assets
33

 
61

Deferred tax liabilities
(616
)
 
(399
)
Net deferred tax liabilities
$
(583
)
 
$
(338
)

At December 31, 2014, federal and state tax net operating loss carryforwards totaled approximately $483.1 million and $436.0 million, respectively. The federal tax loss carryforwards will begin to expire in 2019, unless previously utilized. The state tax loss carryforwards began to expire in 2010.
At December 31, 2014, federal and California research and development tax credit carryforwards totaled approximately, $8.9 million and $17.3 million respectively. The federal research and development tax credit carryforwards will begin to expire in 2027 unless previously utilized. The California research and development credit will carryforward indefinitely.
Pursuant to Internal Revenue Code, or IRC, Sections 382 and 383, annual use of net operating loss and research and development credit carryforwards may be limited in the event of a cumulative change in ownership of more than 50% within a three-year period. During the year ended December 31, 2013, the Company completed an analysis under IRC Sections 382 and 383 from June 7, 2006 through December 31, 2012, and determined that several ownership changes occurred during this period with the last one occurring in December 2010. However, these ownership changes did not result in the forfeiture of any net operating losses or research and development credits. As a result, as of December 31, 2013, the reinstated deferred tax assets for federal and state net operating losses totaled $507.5 million and $449.8 million, respectively, and federal and California research and development credits of $8.5 million and $16.2 million, respectively, generated through December 31, 2013. In addition, a corresponding increase to the valuation allowance was recorded as of December 31, 2014. Upon reinstatement of these operating losses and research and development credits, the Company recorded $5.5 million of related unrecognized tax benefits. The Company is in the process of completing the Section 382 analysis through December 31, 2014 and the Company does not believe that they have experienced any additional ownership changes.
The Company's income tax return recognizes the impact of an uncertain income tax position at the largest amount that is more-likely-than-not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained.
Following is a tabular reconciliation of unrecognized tax benefit activity for the three years ended December 31, 2014 (excluding interest and penalties) (in thousands):
Beginning balance, January 1, 2012
$
2,533

Reduction due to tax provision that reversed in the current year
(2,533
)
Ending balance, December 31, 2012
—

Additions based on tax positions related to the current year
997

Additions based on tax positions related to prior years
4,522

Ending balance, December 31, 2013
5,519

Additions based on tax positions related to the current year
1,748

Additions based on tax positions related to prior years
(22
)
Ending balance, December 31, 2014
$
7,245


The Company recognizes interest and/or penalties related to income tax matters in income tax expense. The Company had no accruals for interest or penalties in the consolidated balance sheets at December 31, 2014 and 2013, and has not recognized any interest or penalties in the statements of operations for the years ended December 31, 2014, 2013 or 2012.
The unrecognized tax benefits as of December 31, 2014, if recognized, would not impact income tax expense or effective tax rate as long as deferred tax assets remain subject to a full valuation allowance.
The Company is subject to taxation in the United States, foreign and various state jurisdictions. The tax years for 1996 and forward are subject to examination by federal and California tax authorities due to the carryforward of unutilized net operating losses and research and development credits. The Company does not expect any changes to unrecognized tax benefits over the next twelve months.