Income Taxes (Tables)

12 Months Ended

Dec. 31, 2015

Income tax provision consisted of the following (in thousands):


	Year ended December 31,
	2015			2014			2013
Current income tax:
Federal	$	—		$	—		$	(579	)
State		392			779			(1,351	)
Foreign		(1	)		—			(145	)

Total		391			779			(2,075	)
Deferred income tax:
Federal		—			(925	)		8,614
State		—			(181	)		(1,938	)
Foreign		(40	)		841			(1,009	)

Total		(40	)		(265	)		5,667

Provision for income taxes	$	351		$	514		$	3,592

Reconciliation of Tax Expense Computed at Statutory Federal Rate and Company's Tax Expense

The following reconciles the tax expense computed at the statutory federal rate and the Company’s tax expense (in thousands):


	Year ended December 31,
	2015			2014			2013
Computed expected tax expense	$	(94,737	)	$	(81,107	)	$	(41,113	)
State income taxes, net of federal tax effect		259			395			(2,171	)
Foreign income taxes		202			1,645			136
Permanent differences		1,980			2,261			1,215
Change in valuation allowance		92,647			77,320			45,525

Provision for income taxes	$	351		$	514		$	3,592

Significant Portions of Deferred Tax Assets and Liabilities

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities were as follows (in thousands):


	December 31,
	2015			2014
Gross deferred tax assets:
Net operating loss carryforwards	$	642,391		$	544,793
Deferred subscriber income		13,722			7,433
Accrued expenses and allowances		15,415			9,474
Purchased intangibles		10,576			4,579
Inventory reserves		9,333			4,156
Property and Equipment		3,257			—
Alternative minimum tax credit and research and development credit		41			41
Valuation allowance		(234,771	)		(139,585	)

		459,964			430,891
Gross deferred tax liabilities:
Deferred subscriber acquisition costs		(466,783	)		(437,595	)
Property and equipment		—			(1,715	)
Prepaid expenses		(705	)		(644	)

		(467,488	)		(439,954	)

Net deferred tax liabilities	$	(7,524	)	$	(9,063	)

Summary of Net Operating Loss Carryforwards

The Company had net operating loss carryforwards as follows (in thousands):


	December 31,
	2015		2014
Net operating loss carryforwards:
United States	$	1,695,386	$	1,355,632
State		1,338,742		1,301,462
Canada		28,629		30,688
New Zealand		5,518		4,203