XML 35 R19.htm IDEA: XBRL DOCUMENT
v3.8.0.1

Income Taxes (Notes) | 12 Months Ended
--- | ---
Dec. 31, 2017
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Loss before income tax provision (benefit) consisted of the following (in thousands):
| For the year ended December 31,
| 2017 |  | 2016 |  | 2015
United States | $ | (44,246) |  | $ | (43,952) |  | $ | (42,788)
Foreign | (119) |  | (1) |  | (618)
Total | $ | (44,365) |  | $ | (43,953) |  | $ | (43,406)
The provision (benefit) for income taxes consisted of the following (in thousands):
| For the year ended December 31,
| 2017 |  | 2016 |  | 2015
Current |  |  |  |  |
State | $ | 42 |  | $ | 12 |  | $ | 69
Foreign | 19 |  | 44 |  | —
Total Current | $ | 61 |  | $ | 56 |  | $ | 69
Deferred |  |  |  |  |
Federal | $ | — |  | $ | (32) |  | $ | (76)
Total Deferred | $ | — |  | $ | (32) |  | $ | (76)
Total | $ | 61 |  | $ | 24 |  | $ | (7)
The items accounting for the difference between income taxes computed at the federal statutory income tax rate and the provision for income taxes consisted of the following (in thousands):
| For the year ended December 31,
| 2017 |  | 2016 |  | 2015
Federal statutory rate | 35.0 | % |  | 35.0 | % |  | 35.0 | %
Effect of: |  |  |  |  |
Tax benefit at federal statutory rate | $ | (15,528) |  | $ | (15,384) |  | $ | (15,192)
State taxes, net of federal benefit | (1,802) |  | (1,377) |  | (1,833)
Revaluation of deferred tax items due to tax rate change (federal and state) | 22,880 |  | — |  | —
Revaluation of deferred tax asset for current year net operating loss due to tax rate change | 4,134 |  | — |  | —
Permanent differences including section 162(m) limitations, stock compensation, gain on foreign restructuring, and meals & entertainment | 5,141 |  | 1,292 |  | 636
Tax benefit of federal R&D credit | (2,366) |  | (1,781) |  | (1,270)
Recognition of excess tax benefits related to share-based payments | (3,606) |  | — |  | —
Valuation allowance | (8,586) |  | 17,013 |  | 17,697
Other | (206) |  | 261 |  | (45)
Total income tax provision | $ | 61 |  | $ | 24 |  | $ | (7)
The components of deferred tax assets and liabilities were as follows (in thousands):
| As of December 31,
| 2017 |  | 2016
Deferred tax assets: |  |  |
Property and equipment | $ | 15 |  | $ | 12
Accruals and reserves | 199 |  | 1,104
Deferred rent | 931 |  | 1,565
Compensation and benefits | 11,973 |  | 16,048
Deferred revenue | 4,762 |  | 3,255
Net operating loss and credits | 41,108 |  | 45,625
Other | 167 |  | 180
Total deferred tax assets | 59,155 |  | 67,789
Valuation allowance | (58,639) |  | (67,225)
Total deferred tax assets | 516 |  | 564
Deferred tax liabilities: |  |  |
Property and equipment | (440) |  | (403)
Other deferred tax liabilities | (76) |  | (161)
Deferred tax liabilities | (516) |  | (564)
Total | $ | — |  | $ | —
On December 22, 2017, the U.S. federal government enacted legislation commonly referred to as the "Tax Cuts and Jobs Act" (the "TCJA"). The TCJA makes widespread changes to the Internal Revenue Code, including, among other items, a reduction in the federal corporate tax rate from 35% to 21%, effective January 1, 2018. The carrying value of our deferred tax assets and liabilities is also determined by the enacted U.S. corporate income tax rate. Consequently, any changes in the U.S. corporate income tax rate will impact the carrying value of our deferred tax assets and liabilities. Under the new corporate income tax rate of 21%, deferred income tax assets, net have decreased by $22.9 million and the valuation allowance has decreased by $22.9 million. There was no net effect of the tax reform enactment on the financial statements as of December 31, 2017. We continue to evaluate the impacts of the TCJA and will consider additional guidance from the U.S. Treasury Department, IRS or other standard-setting bodies. Further adjustments, if any, will be recorded by us during the measurement period in 2018 as permitted by SEC Staff Accounting Bulletin 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act. Effective July 1, 2017, the Company completed a restructuring of its foreign operations. A newly formed holding company was set up in the United Kingdom, Workiva Holdings Limited, which will be treated as a controlled foreign corporation from a U.S. income tax perspective. The outstanding stock ownership of the existing foreign subsidiaries were contributed to Workiva Holdings Limited, effective July 1, 2017, which triggered a taxable gain for the difference in fair market value compared to the tax basis in the entities for U.S. income tax purposes. The estimated gain recorded is $13.9 million which is included as a permanent book-tax difference. The gain is expected to be fully offset by current year net operating losses. Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three-year period ended December 31, 2017. Such objective evidence limits the ability to consider other subjective evidence, such as our projections for future growth. On the basis of this evaluation, we recognized a full valuation allowance against our net deferred tax asset at December 31, 2017, because we believe it is more likely than not that these benefits will not be realized. As of December 31, 2017, we have federal and state net operating loss carryforwards of approximately $133.8 million and $101.2 million, respectively, available to reduce any future taxable income. The federal net operating loss carryforwards will expire in varying amounts between years 2034 and 2037. The state net operating loss carryforwards will expire in varying amounts between years 2021 and 2037. Additionally, we have total net operating loss carryforwards from international operations of $480,000 that will expire in varying amounts beginning in 2033. We also have approximately $6.0 million of federal and $1.3 million of state tax credit carryforwards as of December 31, 2017. The federal credits will expire in varying amounts between the years 2034 and 2037. The state credits expire beginning in 2021. A reconciliation of the gross unrecognized tax benefits is as follows (in thousands):
| For the year ended December 31,
| 2017 |  | 2016
Unrecognized tax benefits-beginning of period | $ | 168 |  | $ | —
Additions for tax positions related to prior year | — |  | 168
Reductions for tax positions related to prior year | — |  | —
Foreign currency adjustments | 23 |  | —
Additions for tax positions related to current year | — |  | —
Unrecognized tax benefits-end of period | $ | 191 |  | $ | 168
We have analyzed our inventory of tax positions taken with respect to all applicable income tax issues for all open tax years. The gross unrecognized tax benefits, if recognized, would not materially affect the effective tax rate as of December 31, 2017, due to the availability of net operating losses. We do not expect our gross unrecognized tax benefits to change significantly over the next 12 months. Our policy is to classify interest and penalties associated with uncertain tax positions, if any, as a component of our income tax provision. Interest and penalties were not significant during the years ended December 31, 2017, 2016 and 2015. We are subject to taxation in the United States and various states and foreign jurisdictions. As of December 31, 2017, tax years for 2014 through 2017 are subject to examination by the tax authorities. With few exceptions, as of December 31, 2017, we are no longer subject to U.S. federal, state, local or foreign examinations by tax authorities for years before 2014.

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/presentationRef -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