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,
	2016			2015			2014
Domestic	$	(5,768	)	$	3,607		$	(10,342	)
Foreign	(2,423		)	(1,354		)	(7,603		)
Income (loss) from continuing operations before provision for income taxes	$	(8,191	)	$	2,253		$	(17,945	)

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



	Year ended December 31,
	2016			2015		2014
Current tax provision (benefit):
U.S. Federal	$	—		$	—	$	(1,712	)
State and local	(11		)	18		(550		)
Foreign	981			439		205
Total current provision for (benefit from) income taxes	970			457		(2,057		)
Deferred tax provision (benefit):
U.S. Federal	—			—		—
State and local	—			—		—
Foreign	(228		)	189		(102		)
Total deferred provision for (benefit from) income taxes	(228		)	189		(102		)
Total provision for (benefit from) income taxes from continuing operations	$	742		$	646	$	(2,159	)

Tax Rate Reconciliation

The effective tax rates for the years ended December 31, 2016, 2015 and 2014 were negative 9.1%, 28.7% and 12.0%, respectively. These effective tax rates differ from the U.S. Federal statutory rate of 35% due to state income taxes, changes in valuation allowances in the U.S. and certain foreign jurisdictions which reduces or eliminates the effective tax rate on current year profits or losses, variations from the U.S. Federal statutory rate in foreign jurisdictions, taxes on repatriations of foreign profits, and non-deductible expenses. The effect of state tax rate changes in 2015 on deferred tax assets was offset by an increase in valuation allowance and has no net impact on effective tax rate.

The following is a reconciliation of the effective tax rate from continuing operations for the years ended December 31, 2016, 2015 and 2014 to the U.S. Federal statutory rate of 35%:



	Year ended December 31,
	2016			2015			2014
Provision for (benefit from) continuing operations at Federal statutory rate of 35%	$	(2,867	)	$	787		$	(6,281	)
State income taxes, net of Federal income tax effect	(7		)	11			(357		)
Change in valuation allowance	(5,045		)	447			(3,427		)
Taxes related to foreign income	8,901			2,140			5,628
Effect of state tax rate changes on deferred tax assets	—			(6,834		)	—
Nondeductible expenses	399			1,375			2,446
Others	(639		)	2,720			(168		)
Provision for (benefit from) income taxes	$	742		$	646		$	(2,159	)

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. As of December 31, 2015 the Company adopted ASU No. 2015-17, "Balance Sheet Classification of Deferred Taxes" on a prospective basis, which required that deferred tax assets and liabilities be classified as noncurrent in a classified statement of financial position. Accordingly, net deferred tax assets as of December 31, 2016 and 2015, have been classified as non-current in the accompanying Consolidated Balance Sheets. Significant temporary differences at December 31, 2016 and 2015 were as follows:



	As of December 31,
	2016			2015
Deferred tax assets (liabilities):
Allowance for doubtful accounts	$	157		$	122
Property and equipment	1,024			321
Goodwill and intangibles	3,879			5,381
Accrued compensation	3,011			2,666
Accrued liabilities and other	2,311			3,244
Tax loss carry-forwards	152,197			154,028
Deferred tax assets (liabilities) gross, total	162,579			165,762
Valuation allowance	(156,343		)	(159,298		)
Deferred tax assets (liabilities), net of valuation allowance, total	$	6,236		$	6,464

Net Operating Losses (“NOLs”) and Valuation Allowance

At December 31, 2016, the Company had net NOLs for U.S. Federal tax purposes of approximately $326,295. 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 2036. As December 31, 2015, the NOL balance did not include a deduction in the amount of $5,222 attributable to stock options and restricted stock until such time as the Company recognizes the deferred tax asset associated with such deduction. During 2016, the Company adopted ASU 2016-09, as a result the NOL balance was increased by the $5,222 previously unrecognized deductions related to stock options and restricted stock and the valuation allowance was increased resulting in a net tax impact of $0. 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, 2016, certain international subsidiaries had NOLs for local tax purposes of $82,355. With the exception of $75,273 of NOLs with an indefinite carry forward period as of December 31, 2016, these losses will expire at various dates through 2036, with $42 scheduled to expire during 2017. The deferred tax recognized for NOLs are presented net of unrecognized tax benefits, where applicable.

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 reversals of deferred tax liabilities, tax planning strategies, and projected future taxable income. The provision for income tax includes a net tax benefit of $887, resulting from changes in judgment regarding the realizability of deferred tax assets in future years. As of December 31, 2016, $147,941 of the valuation allowance relates to the deferred tax asset for NOLs, $130,518 of which is U.S. Federal and state, and $17,423 of which is foreign, that management has determined will more likely than not expire prior to realization. The remaining valuation allowance of $8,402 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, 2016 and 2015, 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,
	2016		2015
Gross unrecognized tax benefits excluding interest and penalties	$	2,039	$	2,190
Less: amount presented as a reduction to a deferred tax asset	438		447
Unrecognized tax benefits, excluding interest and penalties	$	1,601	$	1,743
Accrued interest and penalties	610		536
Total unrecognized tax benefits that would impact the effective tax rate	$	2,211	$	2,279

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, 2016	$	2,190
Additions based on tax positions related to the current year	87
Additions for tax positions of prior years	7
Lapse of statute of limitations	(162		)
Currency Translation	(83		)
Balance at December 31, 2016	$	2,039

Estimated interest and penalties classified as part of the provision for income taxes in the Company’s Consolidated Statements of Operations for the years ended December 31, 2016, 2015 and 2014 were as follows:



	Year ended December 31,
	2016		2015		2014
Expense for (benefit of) estimated interest and penalties related to unrecognized tax benefits	$	77	$	50	$	(150	)

Based on information available as of December 31, 2016, it is reasonably possible that the total amount of unrecognized tax benefits could decrease in the range of $200 to $400 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, 2016, 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		2013
Other U.S. state and local jurisdictions		2012
U.K.		2015
Australia		2012
Majority of other foreign jurisdictions		2011

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