XML 155 R28.htm IDEA: XBRL DOCUMENT
v3.19.3.a.u2

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2019
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Income taxes are determined using the liability method of accounting for income taxes, under which deferred tax assets (“DTAs”) and deferred tax liabilities (“DTLs”) are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax basis of assets and liabilities. If, based upon all available evidence, both positive and negative, it is more likely than not that such DTAs will not be realized, a valuation allowance is recorded. Management assessed the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of existing DTAs in each taxpaying jurisdiction. A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three-year period ended December 31, 2019. Such strong objective evidence puts less emphasis on other subjective evidence, such as our projections for future growth. On the basis of this evaluation, as of December 31, 2019, a valuation allowance of $209 million has been recorded to recognize only the portion of the DTAs that are more likely than not to be realized; however, the amount of the DTAs considered realizable could be adjusted if estimates of future taxable income during the carryforward period change or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as projections for future growth. We apply a recognition threshold and measurement attribute related to uncertain tax positions taken or expected to be taken on our tax returns. We recognize a tax benefit for financial reporting of an uncertain income tax position when it has a greater than 50% likelihood of being sustained upon examination by the taxing authorities. We measure the tax benefit of an uncertain tax position based on the largest benefit that has a greater than 50% likelihood of being ultimately realized including evaluation of settlements. The components of net loss from continuing operations before income taxes are as follows:
|  | Year Ended December 31,
|  | 2019 |  | 2018 |  | 2017
United States |  | $ | (158 | ) |  | $ | (356 | ) |  | $ | (336 | )
Foreign |  | 50 |  |  | 17 |  |  | 109 |
Net loss before income tax (benefit) expense |  | $ | (108 | ) |  | $ | (339 | ) |  | $ | (227 | )
The components of income tax expense (benefit) are as follows:
|  | Year Ended December 31,
|  | 2019 |  | 2018 |  | 2017
Current |  |  |  |  |  |
U.S. Federal |  | $ | (5 | ) |  | $ | 19 |  |  | $ | 5 |
U.S. State |  | 1 |  |  | 4 |  |  | (4 | )
Foreign |  | 32 |  |  | 22 |  |  | 25 |
Total |  | 28 |  |  | 45 |  |  | 26 |
Deferred |  |  |  |  |  |
U.S. Federal |  | (3 | ) |  | (10 | ) |  | (6 | )
U.S. State |  | (3 | ) |  | (7 | ) |  | 3 |
Foreign |  | (12 | ) |  | (15 | ) |  | (8 | )
Total |  | (18 | ) |  | (32 | ) |  | (11 | )
Total income tax expense |  | $ | 10 |  |  | $ | 13 |  |  | $ | 15 |
The reconciliation of the U.S. federal statutory tax rate to the actual tax rate is as follows:
|  | Year Ended December 31,
|  | 2019 |  | 2018 |  | 2017
Statutory U.S. federal income tax rate |  | 21.0 | % |  | 21.0 | % |  | 35.0 | %
Foreign earnings at rates different than U.S. federal rate |  | (3.7 | )% |  | (1.5 | )% |  | (5.7 | )%
Valuation allowance adjustments |  | (31.0 | )% |  | (16.8 | )% |  | (40.8 | )%
Impact of U.S. Tax Reform |  | — | % |  | (3.1 | )% |  | 4.3 | %
Permanent Items |  | (3.6 | )% |  | (2.5 | )% |  | (1.0 | )%
Reduction of UTBs |  | 6.2 | % |  | — | % |  | — | %
Other |  | 1.9 | % |  | (1.0 | )% |  | 1.8 | %
Effective income tax rate |  | (9.2 | )% |  | (3.9 | )% |  | (6.4 | )%
Our 2019 and 2018 effective tax rates were impacted by changes in global valuation allowances totaling $36 million and $93 million, respectively, against net DTAs in various jurisdictions. Additionally, our 2019 effective rate was impacted by a decrease in the UTBs of $7 million due to settlements and statute closures. Deferred income taxes reflect the net tax effects of temporary differences between the carrying values of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The deferred income tax balances are established using the enacted statutory tax rates and are adjusted for changes in such rates in the period of change.
|  | December 31,
|  | 2019 |  | 2018
Deferred tax assets: |  |  |  |
Reserves and other accrued expenses |  | $ | 78 |  |  | $ | 37 |
Net operating loss carry forwards |  | 296 |  |  | 436 |
Tax credit carry forwards |  | 40 |  |  | 29 |
Interest limitation carryforwards |  | 157 |  |  | 106 |
Differences in financial reporting and tax basis for: |  |  |  |
Other |  | 51 |  |  | 64 |
Valuation allowance |  | (209 | ) |  | (245 | )
Realizable deferred tax assets |  | 413 |  |  | 427 |
Deferred tax liabilities: |  |  |  |  |  |
Deferred costs and prepaid expenses |  | (12 | ) |  | (45 | )
Differences in financial reporting and tax basis for: |  |  |  |
Identifiable intangible assets |  | (312 | ) |  | (383 | )
Property and equipment |  | (47 | ) |  | (62 | )
Other |  | (13 | ) |  | (15 | )
Total deferred tax liabilities |  | (384 | ) |  | (505 | )
Net deferred tax liability on balance sheet |  | $ | 29 |  |  | $ | (78 | )
At December 31, 2019, we had the following NOL, interest limitation, R&D credit, and state tax credit carry forwards:
| December 31, 2019
| Federal |  | State |  | Foreign
NOL carry forwards | $ | 960 |  |  | $ | 1,196 |  |  | $ | 181 |
Interest limitation carry forwards | 614 |  |  | 317 |  |  | 28 |
R&D and state credit carry forwards | 40 |  |  | 2 |  |  | — |
The Federal tax loss carryforwards will expire through 2037. The state and foreign NOL carryforwards can be carried forward for periods that vary from five years to indefinitely. R&D tax credit carryforwards will expire through 2039, and state tax credits expire through 2023. The interest limitation carryforwards can be carried forward indefinitely in all jurisdictions in which we have them available. At December 31, 2019 and 2018, we had the following valuation allowances:
|  | December 31,
|  | 2019 |  | 2018
Federal |  | $ | 128 |  |  | $ | 162 |
State |  | 40 |  |  | 50 |
Foreign |  | 41 |  |  | 34 |
Undistributed earnings of subsidiaries are accounted for as a temporary difference, except that DTLs are not recorded for undistributed earnings of foreign subsidiaries that are deemed to be indefinitely reinvested in foreign jurisdictions. The Tax Act required the Company to compute a tax on previously undistributed earnings and profits of its foreign subsidiaries upon transition from a worldwide tax system to a territorial tax system during the year ended December 31, 2017. The repatriation of such amounts in the future should generally be exempt from income taxes in the U.S. (as a result of the Tax Act) and in those jurisdictions that have a similar territorial system of taxation. Substantially all of our current year foreign cash flows are not intended to be indefinitely reinvested offshore, and therefore the tax effects of repatriation (including applicable withholding taxes) of such cash flows are provided for in our financial reporting. Unrecognized Tax Benefits The total amount of unrecognized tax benefits (“UTBs”) as of December 31, 2019 was $28 million. Of this amount, $28 million, if recognized, would be included in our Consolidated Statements of Operations and would impact our effective tax rate. We do not expect any material changes in unrecognized tax benefits before December 31, 2020. We recognize interest and penalties for unrecognized tax benefits in income tax expense. The amounts recognized for interest and penalties during the years ended December 31, 2019, 2018 and 2017 were not material. We file income tax returns in the U.S. Federal jurisdiction and various state and foreign jurisdictions. We are generally not subject to examination for periods prior to December 31, 2015; however as we utilize our net operating losses, prior periods can be subject to examination. There are no ongoing material U.S. federal, state, local or non-U.S. examinations by tax authorities. The Company had the following activity for unrecognized tax benefits:
|  | Year Ended December 31,
|  | 2019 |  | 2018 |  | 2017
Balance at beginning of period |  | $ | 34 |  |  | $ | 22 |  |  | $ | 28 |
Tax positions related to current year additions |  | 1 |  |  | 11 |  |  | 2 |
Additions for tax positions of prior years |  | — |  |  | 2 |  |  | — |
Tax positions related to prior years reductions |  | — |  |  | — |  |  | (7 | )
Reductions due to lapse of statute of limitations on tax positions |  | (7 | ) |  | (1 | ) |  | — |
Settlements |  | — |  |  | — |  |  | (1 | )
Balance at end of period |  | $ | 28 |  |  | $ | 34 |  |  | $ | 22 |

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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration