Income Taxes

Our loss before provision for income taxes was as follows (in thousands):



	Years Ended December 31,
	2014			2013			2012
United States	$	(20,980	)	$	(41,696	)	$	(30,743	)
Foreign	1,653			306			156
Loss before provision for income taxes	$	(19,327	)	$	(41,390	)	$	(30,587	)

The tax provision for the years ended December 31, 2014, 2013 and 2012 consists primarily of taxes attributable to foreign operations. The components of the provision for income taxes are as follows (in thousands):



	Years Ended December 31,
	2014			2013			2012
Current provision (benefit):
Federal	$	—		$	—		$	—
State	5			5			7
Foreign	(371		)	(45		)	178
Total current provision	(366		)	(40		)	185
Deferred provision (benefit):
Federal	—			(59		)	(62		)
State	—			(7		)	(7		)
Foreign	110			19			154
Total deferred provision	110			(47		)	85
Total provision for (benefit from) income taxes	$	(256	)	$	(87	)	$	270

Reconciliation of the provision for income taxes calculated at the statutory rate to our provision for (benefit from) income taxes is as follows (in thousands):



	Years Ended December 31,
	2014			2013			2012
Tax benefit at federal statutory rate	$	(6,571	)	$	(14,073	)	$	(10,399	)
State taxes	249			(1,948		)	(1,063		)
Research and development credits	(57		)	(195		)	—
Foreign operations taxed at different rates	447			(108		)	7
Stock-based compensation	(2		)	117			312
Other nondeductible items	(364		)	(1,272		)	204
Change in federal statutory rate	—			—			1,493
Change in valuation allowance	6,042			17,392			9,716
Provision for (benefit from) income taxes	$	(256	)	$	(87	)	$	270

Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, and (b) operating losses and tax credit carryforwards.

Significant components of our deferred tax assets and liabilities are as follows (in thousands):



	December 31,
	2014			2013
Deferred tax assets:
Net operating losses	$	70,666		$	67,507
Credits	4,421			4,194
Deferred revenues	2,697			1,198
Stock-based compensation	2,988			3,043
Reserves and accruals	2,701			3,626
Depreciation	2,295			2,247
Intangible assets	4,639			4,208
Capital losses	933			—
Unrealized gain/loss	148			112
Other assets	101			159
Total deferred tax assets:	91,589			86,294
Deferred tax liabilities:
Other	(186		)	—
Total deferred tax liabilities:	(186		)	—
Valuation allowance	(91,513		)	(86,294		)
Net deferred tax liabilities	$	(110	)	$	—

ASC Topic 740 requires that the tax benefit of NOL, temporary differences and credit carryforwards are recorded as an asset to the extent that management assesses that realization is “more likely than not.” Realization of the future tax benefits is dependent on our ability to generate sufficient taxable income within the carryforward period. Because of our history of operating losses, management believes that recognition of the deferred tax assets arising from the above-mentioned future tax benefits is currently not more likely than not to be realized and, accordingly, has provided a valuation allowance against our deferred tax assets. Accordingly, the net deferred tax assets in all the Company's jurisdictions have been fully reserved by a valuation allowance. The net valuation allowance increased by $5.2 million, $14.6 million and $8.6 million during the years ended December 31, 2014, 2013 and 2012, respectively. At such time as it is determined that it is more likely than not that the deferred tax assets are realizable, the valuation allowance will be reduced.

The following table sets forth the Company's federal, state and foreign NOL carryforwards and federal research and development tax credits as of December 31, 2014 (in thousands):



	December 31, 2014
	Amount		Expiration Years
Net operating losses, federal	$	196,941	2022-2034
Net operating losses, state	146,916		2015-2034
Tax credits, federal	5,141		2022-2034
Tax credits, state	5,975		Do not expire
Net operating losses, foreign	3,241		Various
Tax credits, foreign	$	16	Various

Current federal and California tax laws include substantial restrictions on the utilization of NOLs and tax credit carryforwards in the event of an ownership change of a corporation. Accordingly, the Company's ability to utilize NOLs and tax credit carryforwards may be limited as a result of such ownership changes. Such a limitation could result in the expiration of carryforwards before they are utilized.

During the current year we determined that the undistributed earnings of our India subsidiary will be repatriated to the United States, and accordingly, we have provided a deferred tax liability totaling $0.2 million as December 31, 2014. The Company has not provided for U.S. federal and state income taxes on all of the remaining non-U.S. subsidiaries’ undistributed earnings as of December 31, 2014, because such earnings are intended to be indefinitely reinvested. As of December 31, 2014, cumulative un-remitted foreign earnings that are considered to be permanently invested outside the United States and on which no U.S. taxes have been provided were approximately $0.1 million. The residual U.S. tax liability, if such amounts were remitted, would be nominal.

We adopted ASC's Topic 740's provision for accounting for uncertainty in income taxes on January 1, 2007. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):



	December 31,
	2014			2013			2012
Balance at beginning of year	$	8,306		$	7,429		$	6,611
Additions based on tax positions related to current year	346			1,116			718
Additions to tax provision of prior years	—			6			316
Reductions to tax provision of prior years	(814		)	(87		)	(29		)
Lapse of the applicable statute of limitations	—			(158		)	(187		)
Balance at end of year	$	7,838		$	8,306		$	7,429

We recognize interest and penalties as a component of our income tax expense. Total interest and penalties recognized in the consolidated statement of operations was $(47,000), $29,000 and $11,000, respectively, in 2014, 2013 and 2012. Total penalties and interest recognized in the balance sheet was $232,000 and $280,000, respectively, in 2014 and 2013. The total unrecognized tax benefits that, if recognized currently, would impact the Company's effective tax rate were $0.5 million and $1.0 million as of December 31, 2014 and 2013, respectively. We do not expect any material changes to our uncertain tax positions within the next 12 months. We are not subject to examination by United States federal or state tax authorities for years prior to 2002 and foreign tax authorities for years prior to 2008.