SEC Filings

10-K
ARRAY BIOPHARMA INC filed this Form 10-K on 08/11/2017
Entire Document
 

A reconciliation of income taxes at the statutory federal income tax rate to net income taxes included in the accompanying statements of operations and comprehensive income (loss) is set forth in the following table:
 
Year Ended June 30,
 
2017
 
2016
 
2015
 
 
 
 
 
 
U.S. federal income tax expense at the statutory rate
34.0
%
 
34.0
%
 
34.0
%
Change in valuation allowance
(58.9
)
 
(53.4
)
 
110.2

Change in tax contingency reserve (releases)
(0.3
)
 
(5.7
)
 
38.4

State income taxes, net of federal taxes
2.3

 
2.1

 
11.1

Stock-based compensation
0.1

 
(1.1
)
 
10.5

Available research and experimentation tax credits
3.3

 
5.0

 
(29.6
)
Orphan drug credit
16.1

 
19.3

 
(176.0
)
Rate change
0.3

 

 
1.0

Effect of other permanent differences

 

 
0.4

Other
3.1

 
(0.2
)
 

Total
0.0
%
 
0.0
%
 
0.0
%

Deferred tax assets and liabilities reflect the net tax effects of net operating losses, credit carryforwards and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and amounts used for income tax purposes.

The components of the Company's deferred tax assets and liabilities are (in thousands):
 
June 30,
 
2017
 
2016
Deferred tax assets
 
 
 
Accrued benefits
$
2,993

 
$
2,568

Inventory reserve
1,517

 
1,514

Net operating loss carryforwards
224,306

 
201,571

Capital loss carryforwards
361

 

Research and experimentation credit carryforwards
37,169

 
33,834

Orphan drug credit carryforwards
70,178

 
45,420

Third party agreement payment
7,844

 
8,452

Deferred revenue
14,322

 
670

Deferred rent
2,355

 
1,772

Stock compensation
6,802

 
4,499

Depreciation of property and equipment
3,349

 
4,112

Loan costs on convertible senior notes

 
278

Other
58

 
32

Total deferred tax assets
371,254

 
304,722

Deferred tax liabilities
 
 
 
Discount on convertible senior notes
(9,173
)
 
(11,639
)
Loan costs on convertible senior notes
(201
)
 

Total deferred tax liabilities
(9,374
)
 
(11,639
)
Less valuation allowance
(361,880
)
 
(293,083
)
Net deferred tax assets
$

 
$


As of each reporting date, the Company considers existing evidence, both positive and negative, that could impact its view with regard to future realization of deferred tax assets. Array had a net loss of $116.8 million for the year ended June 30, 2017. The Company continues to believe that it is more likely than not that the benefit for deferred

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