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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income Tax Expense (Benefit), Continuing Operations [Abstract]

Schedule of income before income tax

Income (loss) before taxes consisted of the following:

	Years Ended December 31,
	2019				2018				2017
	(In thousands)
Domestic	$	(81,316	)		$	(63,829	)		$	46,031
Foreign	(5,700		)		(6,799		)		(5,042		)
	$	(87,016	)		$	(70,628	)		$	40,989

Components of provision for (benefit from) income taxes

The provision for (benefit from) income taxes is comprised of:

	Years Ended December 31,
	2019				2018				2017
	(In thousands)
Federal:
Current	$	2,932			$	5,451			$	20,661
Deferred	2,016				82,726				43,678
State:
Current	657				333				495
Deferred	(1,198		)		522				(43		)
Foreign:
Current	1,708				1,592				1,101
Deferred	(2,712		)		(3,295		)		(2,041		)
	$	3,403			$	87,329			$	63,851

Schedule of effective income tax rate reconciliation

The differences between Rambus’ effective tax rate and the U.S. federal statutory regular tax rate are as follows:

	Years Ended December 31,
	2019			2018			2017
Expense at U.S. federal statutory rate	21.0	%		21.0	%		35.0	%
Expense (benefit) at state statutory rate	0.9			(1.2	)		0.7
Withholding tax	(3.5	)		(7.7	)		50.1
Foreign rate differential	(1.1	)		(0.2	)		2.8
Research and development (“R&D”) credit	1.2			2.2			(3.9	)
Executive compensation	(1.2	)		(0.1	)		1.8
Stock-based compensation	(2.3	)		(2.8	)		14.9
Foreign tax credit	3.4			7.7			(50.1	)
Foreign derived intangible income deduction	4.6			14.8			—
Impact of corporate rate change on deferred taxes	—			—			50.6
Divestiture	4.8			—			—
Other	(0.2	)		0.7			1.4
Valuation allowance	(31.5	)		(158.0	)		52.5
	(3.9	)%		(123.6	)%		155.8	%

Components of the net deferred tax assets

The components of the net deferred tax assets (liabilities) are as follows:

	As of December 31,
	2019				2018
	(In thousands)
Deferred tax assets:
Depreciation and amortization	$	13,995			$	13,085
Lease liabilities	10,734				—
Other timing differences, accruals and reserves	9,522				8,272
Deferred equity compensation	4,456				6,236
Net operating loss carryovers	20,900				21,259
Tax credits	233,407				253,890
Total gross deferred tax assets	293,014				302,742
Deferred tax liabilities:
Lease right-of-use assets	(10,400)				—
Convertible debt	(151)				(207)
Deferred revenue	(94,763)				(143,182		)
Total gross deferred tax liabilities	(105,314)				(143,389		)
Total net deferred tax assets	187,700				159,353
Valuation allowance	(196,972		)		(173,878		)
Net deferred tax liabilities	$	(9,272	)		$	(14,525	)

	As of December 31,
	2019				2018
	(In thousands)
Reported as:
Non-current deferred tax assets	$	4,574			$	4,435
Non-current deferred tax liabilities	(13,846		)		(18,960		)
Net deferred tax liabilities	$	(9,272	)		$	(14,525	)

Summary of valuation allowance

The following table presents the tax valuation allowance information for the years ended December 31, 2019, 2018 and 2017:

	Balance at Beginning of Period				Charged (Credited) to Operations			Charged to Other Account*			Valuation Allowance Release			Valuation Allowance Set up			Balance at End of Period
Tax Valuation Allowance
Year ended December 31, 2017	$	23,529			—			5,855			—			21,527			$	50,911
Year ended December 31, 2018	$	50,911			—			9,238			—			113,729			$	173,878
Year ended December 31, 2019	$	173,878			23,094			—			—			—			$	196,972

______________________________________

*

Amounts not charged to operations are charged to other comprehensive income or retained earnings.

Schedule of reconciliation of the beginning and ending amounts of unrecognized tax benefits

A reconciliation of the beginning and ending amounts of unrecognized income tax benefits for the years ended December 31, 2019, 2018 and 2017 is as follows (amounts in thousands):

	Years Ended December 31,
	2019				2018				2017
Balance at January 1	$	23,482			$	22,652			$	21,925
Tax positions related to current year:
Additions	16,485				1,032				1,083
Tax positions related to prior years:
Additions	76,158				115				16
Reductions	(472		)		(317		)		(372		)
Settlements	—				—				—
Balance at December 31	$	115,653			$	23,482			$	22,652

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Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years.

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Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets.

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Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations.

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Tabular disclosure of income before income tax between domestic and foreign jurisdictions.

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Tabular disclosure for tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities and other income tax contingencies. Includes, but is not limited to, interest and penalties, reconciliation of unrecognized tax benefits, unrecognized tax benefits that would affect the effective tax rate, tax years that remain subject to examination by tax jurisdictions, and information about positions for which it is reasonably possible that amounts unrecognized will significantly change within 12 months.

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