9. Income Taxes

Net operating losses – U.S.

The Company has generated net operating losses for tax purposes (“NOLs”). The following table summarizes the activity for NOLs for the three months ended March 31, 2016:


December 31, 2015	$	(26,070	)
U.S. GAAP pretax income		23,216
State income taxes		(49	)
Income tax differences:
Temporary		(27,186	)
Permanent		1,227

March 31, 2016	$	(28,862	)

At March 31, 2016, $17,863 of the NOLs were generated from stock-based compensation amounts recognized for tax purposes at the time options are exercised (at the intrinsic value) or restricted stock is vested (at fair value of the share price) in excess of amounts previously expensed at the date of grant for U.S. GAAP purposes. These amounts cannot be recognized as a deferred tax asset under U.S. GAAP.

A summary of the components of the gross and tax affected deferred tax asset as of March 31, 2016 is as follows:


Stock-based compensation	$	7,298
Deferred rent liability		5,414
NOLs		7,879
Accrued expenses		3,242
Incentive compensation		(6,219	)
Fixed assets		(5,865	)
Other		220

Total U.S. deferred components		11,969
U.S. income tax rate		38.74	%

U.S. tax affected		4,637

Japan		80

Total tax affected	$	4,717

Net operating losses – Non-U.S.

The Company’s foreign subsidiaries generated NOLs outside the U.S. The following table summarizes the activity for these NOLs for the three months ended March 31, 2016:


December 31, 2015	$	(10,746	)
Foreign subsidiaries loss		(1,650	)

March 31, 2016	$	(12,396	)

At March 31, 2016 and December 31, 2015, a deferred tax asset related to these NOLs has been fully offset by a valuation allowance of $2,381 and $2,051, respectively.