differs from the statutory rate of 35.0 percent primarily due to the U.S. losses for which no benefit is recognized
and non-deductible stock-based compensation, offset by non-U.S. profits subject to reduced or zero tax rates and
the nontaxable change in the estimated fair value of acquisition-related contingent consideration.
approximately $58 million of additional net deferred tax liabilities related to the PopCap and KlickNation
Corporation ("KlickNation") acquisitions. These additional deferred tax liabilities create a new source of taxable
income, thereby requiring us to release a portion of our deferred tax asset valuation allowance with a related
reduction in income tax expense of $58 million. In addition, during the three months ended March 31, 2012, we
recorded $48 million of additional tax benefits related to the expiration of statutes of limitations in non-U.S. tax
jurisdictions.
of U.S. deferred tax assets subject to a valuation allowance and non-U.S. profits subject to a reduced or zero tax
rate, partially offset by non-deductible stock-based compensation. In addition, the fiscal year 2012 effective tax
rate is impacted by tax benefits related to the expiration of statutes of limitations and the resolution of
examinations by taxing authorities, as well as a reduction in the U.S. valuation allowance related to the PopCap
and KlickNation acquisitions.
including changes in the deferred tax valuation allowance, changes in our business such as acquisitions and
intercompany transactions, changes in our international structure, changes in the geographic location of business
functions or assets, changes in the geographic mix of income, changes in or termination of our agreements with
tax authorities, applicable accounting rules, applicable tax laws and regulations, rulings and interpretations
thereof, developments in tax audit and other matters, and variations in our annual pre-tax income or loss. We
incur certain tax expenses that do not decline proportionately with declines in our pre-tax consolidated income or
loss. As a result, in absolute dollar terms, our tax expense will have a greater influence on our effective tax rate at
lower levels of pre-tax income or loss than at higher levels. In addition, at lower levels of pre-tax income or loss,
our effective tax rate will be more volatile.
by tax law have not been considered as a source of future taxable income that is available to realize the benefit of
deferred tax assets.
contains a number of provisions including, most notably, an extension of the research tax credit through
December 31, 2013. The Act did not have a material impact on our effective tax rate for fiscal 2013 due to the
effect of the valuation allowance on our deferred tax assets.
outside of the United States and, accordingly, no U.S. taxes have been provided thereon. We currently intend to
continue to indefinitely reinvest the undistributed earnings of our foreign subsidiaries outside of the United
States.