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Income Taxes
9 Months Ended
Sep. 30, 2016
Income Tax Disclosure [Abstract]  
Income Taxes

7. Income Taxes

The benefit from income taxes decreased by $6.6 million and expense from income taxes increased by $7.0 million in the three and nine months ended September 30, 2016, respectively, as compared to the same periods of the prior year. The decrease in the benefit from income taxes for the three months ended September 30, 2016 is primarily attributable to less benefit being recognized for the release of our U.S. valuation allowance related to the acquisition of PuzzleSocial compared to the U.S. valuation allowance release related to the acquisition of Rising Tide for the same period in the prior year. In addition, there was an increase in foreign tax expense related to a change in our jurisdictional mix of earnings in the three months ended September 30, 2016. The increase in expense for the nine months ended September 30, 2016 is primarily attributable to less benefit being recognized for the release of our U.S. valuation allowance related to the acquisition of PuzzleSocial compared to the U.S. valuation allowance release related to the acquisition of Rising Tide for the same period in the prior year. In addition, there was an increase in foreign tax expense related to a change in our jurisdictional mix of earnings in the nine months ended September 30, 2016.  

Purchase accounting for the PuzzleSocial acquisition required the establishment of a deferred tax liability related to the book-tax basis differences of identifiable intangible assets. The deferred tax liability created an additional source of U.S. future taxable income which resulted in a release of our U.S. valuation allowance recorded in our Statement of Operations. The release of our U.S. valuation allowance as a result of the PuzzleSocial acquisition resulted in less benefit as compared to the release of our U.S. valuation allowance as a result of the Rising Tide acquisition for the same period in the prior year.

 

Once the Company is profitable, we expect our global effective tax rate to be less than the U.S. statutory income tax rate.