XML 44 R28.htm IDEA: XBRL DOCUMENT
v3.22.0.1

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2021
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Income (loss) before taxes consisted of the following:
|  | Years Ended December 31,
(In thousands) |  | 2021 |  | 2020 |  | 2019
Domestic |  | $ | 19,244 |  |  | $ | (39,937) |  |  | $ | (76,848) |
Foreign |  | 4,042 |  |  | 3,398 |  |  | (5,700) |
|  | $ | 23,286 |  |  | $ | (36,539) |  |  | $ | (82,548) |
The provision for income taxes was comprised of:
|  | Years Ended December 31,
(In thousands) |  | 2021 |  | 2020 |  | 2019
Federal: |  |  |  |  |  |
Current |  | $ | (112) |  |  | $ | (446) |  |  | $ | 2,932 |
Deferred |  | 2,042 |  |  | 2,018 |  |  | 2,016 |
State: |  |  |  |  |  |
Current |  | 214 |  |  | 657 |  |  | 670 |
Deferred |  | 324 |  |  | (1,589) |  |  | (1,198) |
Foreign: |  |  |  |  |  |
Current |  | 3,328 |  |  | 3,097 |  |  | 1,708 |
Deferred |  | (844) |  |  | 195 |  |  | (2,712) |
|  | $ | 4,952 |  |  | $ | 3,932 |  |  | $ | 3,416 |
The differences between the Company’s effective tax rate and the U.S. federal statutory regular tax rate were as follows:
|  | Years Ended December 31,
|  | 2021 |  | 2020 |  | 2019
U.S. federal statutory rate |  | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State income tax (expense)/benefit |  | 2.2 |  |  | (2.5) |  |  | 1.0 |
Withholding tax |  | 4.4 |  |  | (4.1) |  |  | (3.7) |
Foreign rate differential |  | 3.3 |  |  | (4.8) |  |  | (1.1) |
Research and development credit |  | (7.1) |  |  | (4.8) |  |  | 1.2 |
Executive compensation |  | 6.6 |  |  | (1.8) |  |  | (1.2) |
Stock-based compensation |  | (7.7) |  |  | 0.6 |  |  | (2.4) |
Foreign tax credit |  | (84.0) |  |  | (89.5) |  |  | 3.6 |
Foreign-derived intangible income deduction |  | (55.8) |  |  | 13.7 |  |  | 5.0 |
Divestiture |  | — |  |  | (20.4) |  |  | 5.1 |
Acquisition |  | 8.8 |  |  | — |  |  | — |
Other |  | (0.2) |  |  | 0.8 |  |  | (0.4) |
Valuation allowance |  | 129.8 |  |  | 81.0 |  |  | (32.2) |
|  | 21.3 | % |  | (10.8) | % |  | (4.1) | %
The components of the net deferred tax assets (liabilities) were as follows:
|  | As of December 31,
(In thousands) |  | 2021 |  | 2020
Deferred tax assets: |  |  |  |
Depreciation and amortization |  | $ | 6,578 |  |  | $ | 13,199 |
Lease liabilities |  | 7,873 |  | 8,716
Other timing differences, accruals and reserves |  | 5,828 |  | 5,347
Deferred equity compensation |  | 5,077 |  | 4,631
Net operating loss carryovers |  | 14,602 |  | 15,692
Capitalized research |  | 22,301 |  | —
Tax credits |  | 130,348 |  | 168,978
Total gross deferred tax assets |  | 192,607 |  | 216,563 |
Deferred tax liabilities: |  |  |  |
Lease right-of-use assets |  | (5,323) |  | (6,392)
Convertible debt |  | (81) |  | (130)
Deferred revenue |  | (267) |  | (45,845)
Total gross deferred tax liabilities |  | (5,671) |  | (52,367)
Total net deferred tax assets |  | 186,936 |  | 164,196
Valuation allowance |  | (206,874) |  | (174,119)
Net deferred tax liabilities |  | $ | (19,938) |  |  | $ | (9,923) |
|  | As of December 31,
(In thousands) |  | 2021 |  | 2020
Reported as: |  |  |  |
Non-current deferred tax assets |  | $ | 4,047 |  |  | $ | 4,353 |
Non-current deferred tax liabilities |  | (23,985) |  |  | (14,276) |
Net deferred tax liabilities |  | $ | (19,938) |  |  | $ | (9,923) |
The Company periodically evaluates the realizability of its net deferred tax assets based on all available evidence, both positive and negative. During the third quarter of 2018, the Company assessed the changes in its underlying facts and circumstances and evaluated the realizability of its existing deferred tax assets based on all available evidence, both positive and negative, and the weight accorded to each, and concluded a full valuation allowance associated with U.S. federal and California deferred tax assets was appropriate. During 2020, as a result of the enactment of California A.B. 85 and the temporary suspension of California net operating loss utilization for tax years 2020 through 2022, the Company released $0.7 million of the valuation allowance on its deferred tax asset for California research and development tax credits. In 2021, based on available evidence, the Company recorded a full valuation allowance on its California deferred tax assets. The Company continues to maintain a full valuation allowance on its California and U.S. federal deferred tax assets as it does not expect to be able to fully utilize them. The following table presents the tax valuation allowance information for the years ended December 31, 2021, 2020 and 2019:
(In thousands) |  | Balance at Beginning of Period |  | Charged (Credited) to Operations |  | Charged to Other Account* |  | Valuation Allowance Release |  |  |  | Balance at End of Period
Tax Valuation Allowance |  |  |  |  |  |  |  |  |  |  |  |
Year ended December 31, 2019 |  | $ | 173,878 |  |  | 22,220 |  |  | — |  |  | — |  |  |  |  | $ | 196,098 |
Year ended December 31, 2020 |  | $ | 196,098 |  |  | (21,294) |  |  | 3 |  |  | (688) |  |  |  |  | $ | 174,119 |
Year ended December 31, 2021 |  | $ | 174,119 |  |  | 32,544 |  |  | 211 |  |  | — |  |  |  |  | $ | 206,874 |
______________________________________ * Amounts not charged to operations are charged to other comprehensive income or retained earnings. As of December 31, 2021, the Company had California and other state net operating loss carryforwards of $202.0 million and $12.6 million, respectively. As of December 31, 2021, the Company had federal research and development tax credit carryforwards of $41.7 million and foreign tax credits of $85.5 million. As of December 31, 2021, the Company had California research and development tax credit carryforwards of $24.2 million and California alternative minimum tax credit carryforwards of $0.3 million. The federal foreign tax credits and research and development credits begin to expire in 2022. Approximately $9.0 million of federal foreign tax credits would expire if not utilized in 2022. The California net operating losses begin to expire in 2024. The California research and development credits carry forward indefinitely. In the event of a change in ownership, as defined under federal and state tax laws, the Company’s net operating loss and tax credit carryforwards could be subject to annual limitations. The annual limitations could result in the expiration of the net operating loss and tax credit carryforwards prior to utilization. As of December 31, 2021, the Company had $146.2 million of unrecognized tax benefits including $18.9 million recorded as a reduction of long-term deferred tax assets, $126.1 million recorded as a reduction of other assets associated with refundable withholding taxes previously withheld from licensees in South Korea, and $1.3 million recorded to long-term income taxes payable. As a result of recent court rulings in South Korea, the Company has determined that they may be entitled to refund claims for foreign taxes previously withheld from licensees in South Korea. The Company recognizes that there are numerous risks and uncertainties associated with the ultimate collection of this refund and has therefore established an offsetting reserve for the entire amount of potentially refundable withholding taxes previously withheld in South Korea. If recognized, $127.3 million would be recorded as an income tax benefit on the consolidated statement of operations. As of December 31, 2020, the Company had $134.0 million of unrecognized tax benefits including $23.6 million recorded as a reduction of long-term deferred tax assets, $109.0 million recorded as a reduction of other assets associated with refundable withholding taxes previously withheld from licensees in South Korea, and $1.9 million recorded to long term income taxes payable. A reconciliation of the beginning and ending amounts of unrecognized income tax benefits for the years ended December 31, 2021, 2020 and 2019 was as follows:
|  | Years Ended December 31,
(In thousands) |  | 2021 |  | 2020 |  | 2019
Balance at January 1 |  | $ | 134,044 |  |  | $ | 115,653 |  |  | $ | 23,482 |
Tax positions related to current year: |  |  |  |  |  |
Additions |  | 18,748 |  |  | 18,600 |  |  | 16,485 |
Tax positions related to prior years: |  |  |  |  |  |
Additions |  | 615 |  |  | — |  |  | 76,158 |
Reductions |  | (1,586) |  |  | (209) |  |  | (472) |
Settlements |  | (5,606) |  |  | — |  |  | — |
Balance at December 31 |  | $ | 146,215 |  |  | $ | 134,044 |  |  | $ | 115,653 |
The Company recognizes interest and penalties related to uncertain tax positions as a component of the income tax provision (benefit). At December 31, 2021 and 2020, an immaterial amount of interest and penalties is included in long-term income taxes payable. Rambus files income tax returns for the U.S., California, India and various other state and foreign jurisdictions. The U.S. federal returns are subject to examination from 2016 and forward. The California returns are subject to examination from 2017 and forward. In addition, any research and development credit carryforward or net operating loss carryforward generated in prior years and utilized in these or future years may also be subject to examination. The Company settled its 2010, 2016 and 2018 audits with the California Franchise Tax Board in 2021, agreeing to the immaterial adjustments proposed. The India returns are under examination by the Indian tax administration for tax years beginning with 2011, except for 2012 through 2014 which were assessed in the Company’s favor, and are subject to examination from 2015 and forward. These examinations may result in proposed adjustments to the income taxes as filed during these periods. Management regularly assesses the likelihood of outcomes resulting from income tax examinations to determine the adequacy of their provision for income taxes and believes their provision for unrecognized tax benefits is adequate. The estimated potential reduction in the Company’s unrecognized tax benefits in the next 12 months would not be material. At December 31, 2021, no other income taxes (state or foreign) have been provided on undistributed earnings of approximately $25.4 million from the Company’s international subsidiaries since these earnings have been, and under current plans will continue to be, indefinitely reinvested outside the United States. However, if such earnings were distributed, the Company would incur approximately $2.2 million of foreign withholding taxes and an immaterial amount of U.S. taxes.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration