Option Grant and Exercise Terms

Table of Contents The components of deferred tax assets and liabilities were as follows: Deferred tax assets: Stock-based compensation Federal and California tax R&D credits Foreign tax credits Accruals and reserves Operating leases Foreign Net Operating Losses Unrealized Gain/Loss Other Gross deferred tax assets Depreciation & amortization Operating leases Acquisitions Gross deferred tax liabilities Valuation allowance Net deferred tax assets As of December 31, 2021 2020 (in thousands) $ 351,238 $ 296,646 484,793 513,413 2,045 165,214 74,239 570,830 436,838 8,043 29,894 13,772 114,884 5,420 2,543 1,601,355 1,468,457 (388,115) (229,142) (506,403) (400,380) (240,334) (1,134,852) (629,522) (318,408) (249,844) $ 148,095 $ 589,091 All deferred tax assets are classified as "Other non-current assets" on the Consolidated Balance Sheets as of December 31, 2021 and December 31, 2020. In evaluating its ability to realize the net deferred tax assets, the Company considered all available positive and negative evidence, including its past operating results and the forecast of future market growth, forecasted earnings, future taxable income, and prudent and feasible tax planning strategies. As of December 31, 2021, the valuation allowance of $318 million was related to the California R&D credits and certain foreign tax attributes that the Company does not expect to realize. As of December 31, 2021, the Company's Federal R&D tax credit and state tax credit carryforwards for tax return purposes were $274 million, and $456 million, respectively. The Federal R&D tax credit carryforwards expire through 2041. State tax credit carryforwards can be carried forward indefinitely. The unrecognized tax benefits that are not expected to result in payment or receipt of cash within one year are classified as "Other non-current liabilities" and a reduction of deferred tax assets which is classified as "Other non-current assets" in the Consolidated Balance Sheets. As of December 31, 2021, the total amount of gross unrecognized tax benefits was $203 million, of which $136 million, if recognized, would favorably impact the Company's effective tax rate. As of December 31, 2020, the total amount of gross unrecognized tax benefits was $140 million, of which $86 million, if recognized, would favorably impact the Company's effective tax rate. The aggregate changes in the Company's total gross amount of unrecognized tax benefits are summarized as follows (in thousands): Balances as of December 31, 2019 Increases related to tax positions taken during prior periods Decreases related to tax positions taken during prior periods Increases related to tax positions taken during the current period Decreases related to expiration of statute of limitations Balances as of December 31, 2020 Increases related to tax positions taken during prior periods Decreases related to tax positions taken during prior periods Increases related to tax positions taken during the current period Decreases related to expiration of statute of limitations $ 66,768 11,943 (3,697) 65,110 140,124 27,116 35,317 Balances as of December 31, 2021 $ 202,557 59

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