INCOME TAXES

Income Tax Provision

The domestic and foreign components of income (loss) before income taxes from continuing operations were as follows:



	Year ended December 31,
	2014			2013			2012
Domestic	$	(10,342	)	$	(7,622	)	$	(2,322	)
Foreign	(7,603		)	(19,325		)	(8,009		)
Income (loss) from continuing operations before provision for income taxes	$	(17,945	)	$	(26,947	)	$	(10,331	)

The provision for (benefit from) income taxes from continuing operations was as follows:



	Year ended December 31,
	2014			2013			2012
Current tax provision (benefit):
U.S. Federal	$	(1,712	)	$	(81	)	$	(714	)
State and local	(550		)	126			(3,296		)
Foreign	205			79			1,211
Total current provision for (benefit from) income taxes	(2,057		)	124			(2,799		)
Deferred tax provision (benefit):
U.S. Federal	—			—			—
State and local	—			—			—
Foreign	(102		)	3,140			(310		)
Total deferred provision for (benefit from) income taxes	(102		)	3,140			(310		)
Total provision for (benefit from) income taxes from continuing operations	$	(2,159	)	$	3,264		$	(3,109	)

Tax Rate Reconciliation

The effective tax rates for the years ended December 31, 2014, 2013 and 2012 were 12.0%, negative 12.1% and 30.1%, respectively. These effective tax rates differ from the U.S. Federal statutory rate of 35% due to the inability to recognize tax benefits on losses, state taxes, non-deductible expenses such as certain acquisition related payments, variations from the U.S. tax rate in foreign jurisdictions and taxes on repatriations of foreign profits. The following is a reconciliation of the effective tax rate from continuing operations for the years ended December 31, 2014, 2013 and 2012 to the U.S. Federal statutory rate of 35%:



	Year ended December 31,
	2014			2013			2012
Provision for (benefit from) continuing operations at Federal statutory rate of 35%	$	(6,281	)	$	(9,431	)	$	(3,616	)
State income taxes, net of Federal income tax effect	(357		)	(2		)	(2,143		)
Change in valuation allowance	(3,427		)	7,949			2,545
Taxes related to foreign income	5,628			949			(2,646		)
Nondeductible expenses and others	2,278			3,799			2,751
Provision for (benefit from) income tax	$	(2,159	)	$	3,264		$	(3,109	)

Deferred Taxes Assets (Liabilities)

Deferred income taxes are provided for the tax effect of temporary differences between the financial reporting basis and the tax basis of assets and liabilities. Net deferred tax assets were included in other current assets and other assets in the accompanying Consolidated Balance Sheets. Significant temporary differences at December 31, 2014 and 2013 were as follows:



	As of December 31,
	2014			2013
Current deferred tax assets (liabilities):
Allowance for doubtful accounts	$	124		$	201
Accrued and other current liabilities	1,444			1,057
Accrued compensation liabilities	2,925			1,972
Current deferred tax assets (liabilities), gross, total	4,493			3,230
Valuation allowance	(2,900		)	(1,689		)
Total current deferred tax asset, net of valuation allowance	1,593			1,541
Non-current deferred tax assets (liabilities):
Property and equipment	2,152			2,217
Goodwill and intangibles	7,825			10,990
Accrued and other non-current liabilities	2,138			2,410
Deferred compensation	2,581			2,542
Tax loss carry-forwards	146,644			149,296
Non-current deferred tax assets (liabilities), gross, total	161,340			167,455
Valuation allowance	(155,951		)	(160,590		)
Total non-current deferred tax asset (liabilities), net of valuation allowance	5,389			6,865
Deferred tax assets (liabilities), net of valuation allowance, total	$	6,982		$	8,406

Net Operating Losses (“NOLs”) and Valuation Allowance

At December 31, 2014, the Company had net NOLs for U.S. Federal tax purposes of approximately $306,579. This total includes approximately $16,584 of tax losses that were not absorbed by Monster Worldwide, Inc. ("Monster") on its consolidated U.S. Federal tax returns through the spin off of the Company on April 1, 2003. NOLs expire at various dates through 2034. The NOL balance does not include a deduction in the amount of $5,186 attributable to stock options and restricted stock until such time as the Company recognizes the deferred tax asset associated with such deduction. The Company's utilization of NOLs is subject to an annual limitation imposed by Section 382 of the Internal Revenue Code, which may limit our ability to utilize all of the existing NOLs before the expiration dates. As of December 31, 2014, certain international subsidiaries had NOLs for local tax purposes of $106,017. With the exception of $98,594 of NOLs with an indefinite carry forward period as of December 31, 2014, these losses will expire at various dates through 2034, with $1,520 scheduled to expire during 2015.

ASC 740-10-30-5 requires that a valuation allowance be established when it is more likely than not that all or a portion of a deferred tax asset will not be realized. In making this assessment, management considers the level of historical taxable income, scheduled reversal of deferred tax liabilities, tax planning strategies, and projected future taxable income. As of December 31, 2014, $142,444 of the valuation allowance relates to the deferred tax asset for NOLs, $116,500 of which is U.S. Federal and state, and $25,944 of which is foreign, that management has determined will more likely than not expire prior to realization. The remaining valuation allowance of $16,407 relates to deferred tax assets on U.S. and foreign temporary differences that management estimates will not be realized due to the Company's U.S. and foreign tax losses.

Uncertain Tax Positions

As of December 31, 2014 and 2013, the Company's unrecognized tax benefits, including interest and penalties, which would lower the Company’s annual effective income tax rate if recognized in the future, were as follows:



	As of December 31,
	2014		2013
Gross unrecognized tax benefits excluding interest and penalties	$	2,634	$	3,086
Reduction of unrecognized tax benefit (a)	$	791	$	—
Unrecognized tax benefits, excluding interest and penalties	$	1,843	$	3,086
Accrued interest and penalties	554		786
Total unrecognized tax benefits that would impact effective tax rate	$	2,397	$	3,872

(a)

In July 2013, the FASB issued ASU No. 2013-11, “Presentation of Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists, an amendment to FASB Accounting Standards Codification Topic 740, Income Taxes" ("ASU 2013-11"). ASU 2013-11 clarifies that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward if such settlement is required or expected in the event the uncertain tax position is disallowed. The Company adopted the ASU 2013-11 prospectively on January 1, 2014.

The following table shows a reconciliation of the beginning and ending amounts of unrecognized tax benefits, exclusive of interest and penalties:



Balance at January 1, 2014	$	3,086
Additions based on tax positions related to the current year	160
Additions for tax positions of prior years	—
Reductions for tax positions of prior years	—
Settlements	—
Lapse of statute of limitations	(431		)
Currency Translation	(181		)
Balance at December 31, 2014	$	2,634

Estimated interest and penalties classified as part of the provision for income taxes in the Company’s Consolidated Statements of Operations and Other Comprehensive Income (Loss) for the years ended December 31, 2014, 2013 and 2012 were as follows:



	Year ended December 31,
	2014			2013		2012
Expense for (benefit of) estimated interest and penalties related to unrecognized tax benefits	$	(150	)	$	108	$	(909	)

Based on information available as of December 31, 2014, it is reasonably possible that the total amount of unrecognized tax benefits could decrease in the range of $400 to $700 over the next 12 months as a result of projected resolutions of global tax examinations and controversies and potential lapses of the applicable statutes of limitations.

In many cases, the Company’s unrecognized tax benefits are related to tax years that remain subject to examination by the relevant tax authorities. Tax years with NOLs remain open until such losses expire or the statutes of limitations for those years when the NOLs are used or expire. As of December 31, 2014, the Company's open tax years remain subject to examination by the relevant tax authorities and currently under income tax examination were principally as follows:



		Year
Earliest tax years remain subject to examination by the relevant tax authorities:
U.S. Federal		2011
Other U.S. state and local jurisdictions		2010
U.K.		2013
Australia		2010
Majority of other foreign jurisdictions		2009

The Company believes that its tax reserves are adequate for all years subject to examination above.