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INCOME TAX: | 12 Months Ended
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Mar. 31, 2020
Income Tax Disclosure [Abstract] |
INCOME TAXES: | INCOME TAX: Total income tax expense (benefit) was allocated as follows (dollars in thousands):
|  | Year ended March 31, |  |  |  |
|  | 2020 |  | 2019 |  | 2018
Continuing operations |  |  | $ | (40,276) |  |  | $ | (45,409) |  |  | $ | (65,723) |
Discontinued operations |  | 207 |  | 470,346 |  |  | 42,952 |
|  |  | $ | (40,069) |  |  | $ | 424,937 |  |  | $ | (22,771) |
Income tax expense (benefit) attributable to loss from continuing operations consists of (dollars in thousands):
|  | Year ended March 31, |  |  |  |
|  | 2020 |  | 2019 |  | 2018
Current: |  |  |  |  |  |
U.S. Federal |  |  | $ | (33,715) |  |  | $ | (39,534) |  |  | $ | (33,626) |
Non-U.S. |  |  | 146 |  |  | 323 |  |  | 115 |
State |  |  | 171 |  |  | (16,092) |  |  | (4,414) |
|  |  | (33,398) |  |  | (55,303) |  |  | (37,925) |
Deferred: |  |  |  |  |  |
U.S. Federal |  |  | (5,103) |  |  | 1,245 |  |  | (26,884) |
Non-U.S. |  |  | (1,006) |  |  | 149 |  |  | 21 |
State |  |  | (769) |  |  | 8,500 |  |  | (935) |
|  |  | (6,878) |  |  | 9,894 |  |  | (27,798) |
Total |  |  | $ | (40,276) |  |  | $ | (45,409) |  |  | $ | (65,723) |
Loss before income tax attributable to U.S. and non-U.S. continuing operations consists of (dollars in thousands):
|  | Year ended March 31, |  |  |  |
|  | 2020 |  | 2019 |  | 2018
U.S. |  |  | $ | (160,457) |  |  | $ | (174,867) |  |  | $ | (132,552) |
Non-U.S. |  |  | (5,080) |  |  | (4,489) |  |  | (470) |
Total |  |  | $ | (165,537) |  |  | $ | (179,356) |  |  | $ | (133,022) |
Loss before income taxes, as shown above, is based on the location of the entity to which such losses are attributable. However, since such losses may be subject to taxation in more than one country, the income tax provision shown above as U.S. or non-U.S. may not correspond to the loss shown above. Below is a reconciliation of expected income tax benefit computed by applying the U.S. federal statutory rate of 21.0% for fiscal 2020 and 2019 and the blended U.S. federal statutory rate of 31.5% for fiscal 2018 to loss before income taxes to actual income tax benefit from continuing operations (dollars in thousands):
|  | Year ended March 31, |  |  |  |
|  | 2020 |  | 2019 |  | 2018
Computed expected income tax benefit |  |  | $ | (34,763) |  |  | $ | (37,665) |  |  | $ | (41,967) |
Increase (reduction) in income taxes resulting from: |  |  |  |  |  |
State income taxes, net of federal benefit |  |  | (473) |  |  | (5,998) |  |  | (3,329) |
Research and other tax credits |  |  | (1,517) |  |  | (3,141) |  |  | (1,229) |
Effect of federal rate change on deferred taxes |  |  | — |  |  | — |  |  | (24,565) |
Nondeductible expenses |  |  | 838 |  |  | 426 |  |  | 431 |
Stock-based compensation |  |  | 5,025 |  |  | (5,350) |  |  | 4,452 |
Non-U.S. subsidiaries taxed at other than 35% |  |  | 230 |  |  | 1,343 |  |  | 332 |
Adjustment to valuation allowances |  |  | (2,245) |  |  | 5,204 |  |  | — |
Net operating loss carryback taxed at other rates |  |  | (7,360) |  |  | — |  |  | — |
Other, net |  |  | (11) |  |  | (228) |  |  | 152 |
|  |  | $ | (40,276) |  |  | $ | (45,409) |  |  | $ | (65,723) |
On March 27, 2020, the U.S. enacted The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). The CARES Act included several significant changes and clarifications to existing tax law, including changes to the treatment of net operating losses (“NOLs”). Under the CARES Act, NOLs arising in tax years beginning after December 31, 2017, and before January 1, 2021 may be carried back to each of the five tax years preceding the tax year of the loss. As such, the Company plans to carry back its fiscal 2020 NOL, resulting in an expected refund of approximately $32 million. On December 22, 2017, the U.S. enacted significant tax law changes following the passage of H.R.1, “An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018” (the “Tax Act”) (previously known as “The Tax Cuts and Jobs Act”). The Tax Act included significant changes to existing tax law, including a permanent reduction to the U.S. federal corporate income tax rate from 35% to 21%, a one-time repatriation tax on deferred foreign income, and numerous other changes to business-related deductions. Because the effective date of the permanent tax rate reduction did not fall on the first day of our fiscal year ended March 31, 2018, we were required to apply a blended tax rate for the entire fiscal year based on a weighted daily average rate. Accordingly, our U.S. federal statutory corporate income tax rate was 21.0% for the fiscal years ended March 31, 2020 and 2019 and 31.5% for the fiscal year ended March 31, 2018. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at March 31, 2020 and 2019 are presented below (dollars in thousands).
|  | 2020 |  | 2019
Deferred tax assets: |  |  |  |
Accrued expenses |  |  | $ | 3,978 |  |  |  | $ | 3,347 |
Deferred revenue |  |  | 16 |  |  |  | 19 |
Lease liabilities |  |  | 4,939 |  |  |  | — |
Net operating loss carryforwards |  |  | 33,516 |  |  |  | 29,032 |
Stock-based compensation |  |  | 8,076 |  |  |  | 10,770 |
Nonqualified deferred compensation |  |  | 2,815 |  |  |  | 3,147 |
Other |  |  | 4,018 |  |  |  | 3,102 |
Total deferred tax assets |  |  | 57,358 |  |  |  | 49,417 |
Less valuation allowance |  |  | (32,971) |  |  |  | (34,356) |
Net deferred tax assets |  |  |  | 24,387 |  |  |  | 15,061 |
Deferred tax liabilities: |  |  |  |  |  |  |
Prepaid expenses |  |  |  | (2,239) |  |  |  | (1,222) |
Capitalized software costs |  |  | (244) |  |  |  | (636) |
Property and equipment |  |  | (1,498) |  |  |  | (440) |
Right-of-use assets |  |  | (4,147) |  |  |  | — |
Intangible assets |  |  | (9,605) |  |  |  | (5,631) |
Deferred commissions |  |  | (3,817) |  |  |  | (2,586) |
Accrued expenses |  |  | (2,189) |  |  |  | (4,550) |
Total deferred tax liabilities |  |  | (23,739) |  |  |  | (15,065) |
Net deferred tax assets (liabilities) |  |  | $ | 648 |  |  |  | $ | (4) |
Certain balances in the above table as of March 31, 2019 have been restated to conform with current year presentation. At March 31, 2020, the Company has net operating loss carryforwards of approximately $21.7 million and $70.0 million for U.S. federal and state income tax purposes, respectively. Of the net operating loss carryforwards, $11.5 million and $9.5 million will not expire for federal and state purposes, respectively. The remaining carryforwards will expire in various amounts and will completely expire if not used by 2040. The Company has foreign net operating loss carryforwards of approximately $99.9 million. Of this amount, $93.3 million do not have expiration dates. The remainder expires in various amounts and will completely expire if not used by 2025. The Company has state credit carryforwards of $2.1 million that will not expire. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Realization of the Company’s net deferred tax assets is dependent upon its generation of sufficient taxable income of the proper character in future years in appropriate tax jurisdictions to obtain benefit from the reversal of temporary differences and net operating loss carryforwards. Based upon the weight of available evidence, including the Company’s history of losses from continuing operations, management believes that it is not more likely than not the Company will realize the benefits of the deductible temporary differences and net operating loss carryforwards. Accordingly, the Company has established valuation allowances against its deferred tax assets. Based upon the Company's history of losses in certain non-U.S. jurisdictions, the Company has not recorded a benefit for current foreign losses in these jurisdictions. In addition, management believes it is not more than likely than not the Company will realize the benefits of certain foreign loss carryforwards and has established valuation allowances in the amount of $26.6 million against deferred tax assets in such jurisdictions. No valuation allowance has been established against deferred tax assets in non-U.S. jurisdictions in which historical profits and forecasted continuing profits exist. The following table sets forth changes in the total gross unrecognized tax benefits for the fiscal years ended March 31, 2020, 2019 and 2018 (dollars in thousands):
|  | Year ended March 31, |  |  |  |
|  | 2020 |  | 2019 |  | 2018
Balance at beginning of period |  |  | $ | 19,600 |  |  | $ | 15,415 |  |  | $ | 12,870 |
Increases related to prior year tax positions |  |  | 2,458 |  |  | 325 |  |  | 1,134 |
Decreases related to prior year tax positions |  |  | (1,048) |  |  | (292) |  |  | (208) |
Increases related to current year tax positions |  |  | 2,433 |  |  | 5,483 |  |  | 3,172 |
Lapse of statute of limitations |  |  | (43) |  |  | (1,331) |  |  | (1,553) |
Balance at end of period |  |  | $ | 23,400 |  |  | $ | 19,600 |  |  | $ | 15,415 |
Gross unrecognized tax benefits as of March 31, 2020 was $23.4 million, which would reduce the Company’s effective tax rate in future periods if and when realized. The Company reports accrued interest and penalties related to unrecognized tax benefits in income tax expense. The combined amount of accrued interest and penalties related to tax positions on tax returns was approximately $2.5 million as of March 31, 2020. Accrued interest and penalties increased by $2.1 million during fiscal 2020. The Company does not anticipate a reduction of unrecognized tax benefits within the next 12 months. The Company files a consolidated U.S. federal income tax return and tax returns in various state and local jurisdictions. The Company’s subsidiaries also file tax returns in various foreign jurisdictions in which they operate. In the U.S., the statute of limitations for Internal Revenue Service examinations remains open for the Company’s federal income tax returns for fiscal years after 2015. The status of U.S. federal, state and foreign tax examinations varies by jurisdiction. The Company does not anticipate any material adjustments to its financial statements resulting from tax examinations currently in progress.

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- 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
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