XML 38 R24.htm IDEA: XBRL DOCUMENT
v3.10.0.1

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2018
Income Taxes |
Income Taxes | Note 17 — Income Taxes The amounts of income (loss) before income taxes attributable to domestic and foreign operations were as follows:
|  | Year ended December 31,
|  | 2018 |  | 2017 |  | 2016
|  | (in thousands)
Domestic |  | $ | (286,561) |  | $ | (101,573) |  | $ | (123,089)
Foreign |  |  | (147,273) |  |  | 12,583 |  |  | 3,885
Total |  | $ | (433,834) |  | $ | (88,990) |  | $ | (119,204)
Significant components of the expense (benefit) for income taxes consisted of the following:
|  | Year ended December 31,
|  | 2018 |  | 2017 |  | 2016
|  | (in thousands)
Current: |  |  |  |  |  |  |  |  |
Federal |  | $ | (1,682) |  | $ | — |  | $ | —
Foreign |  |  | 2,518 |  |  | (2,246) |  |  | 1,937
State and local |  |  | 38 |  |  | 15 |  |  | (111)
Total current expense (benefit) for income taxes |  |  | 874 |  |  | (2,231) |  |  | 1,826
Deferred: |  |  |  |  |  |  |  |  |
Federal |  |  | 205 |  |  | (35,912) |  |  | 1,459
Foreign |  |  | (27,932) |  |  | 1,291 |  |  | (589)
State and local |  |  | 107 |  |  | (742) |  |  | 127
Total deferred expense (benefit) for income taxes |  |  | (27,620) |  |  | (35,363) |  |  | 997
Total expense (benefit) for income taxes |  | $ | (26,746) |  | $ | (37,594) |  | $ | 2,823
The income tax expense was reconciled to the tax expense computed at the U.S. federal statutory tax rate as follows:
|  | Year ended December 31,
|  | 2018 |  | 2017 |  | 2016
|  | (in thousands)
Income tax expense (benefit) at U.S. statutory rates |  | $ | (91,105) |  | $ | (31,147) |  | $ | (41,722)
State taxes, net of U.S. federal impact |  |  | (2,848) |  |  | (2,523) |  |  | (1,963)
Effect of international operations |  |  | 11,847 |  |  | 10,158 |  |  | 8,798
Research and development tax credit |  |  | (2,230) |  |  | 620 |  |  | (801)
Net change in valuation allowance |  |  | 7,747 |  |  | 1,883 |  |  | 50,544
Change in accrual for unrecognized tax benefits |  |  | 2,868 |  |  | (4,772) |  |  | (1,700)
Subsidiary liquidation |  |  | — |  |  | — |  |  | (12,435)
Share-based compensation |  |  | 1,848 |  |  | 99 |  |  | 2,133
Effect of 2017 Tax Act |  |  | (1,690) |  |  | (11,344) |  |  | —
Asset impairment |  |  | 46,872 |  |  | — |  |  | —
Other |  |  | (55) |  |  | (568) |  |  | (31)
Total expense (benefit) for income taxes |  | $ | (26,746) |  | $ | (37,594) |  | $ | 2,823
The Company recognized the income tax effects of the 2017 Tax Act in its 2017 financial statements in accordance with SAB 118, which provided SEC staff guidance for the application of ASC 740 in the reporting period in which the 2017 Tax Act was signed into law. As such, the Company’s 2017 financial results included provisional amounts for specific income tax effects of the 2017 Tax Act for which the accounting under ASC 740 was incomplete but for which a reasonable estimate could be determined. During the year ended December 31, 2018, the Company finalized the accounting for the tax effects of 2017 Tax Act based on legislative updates currently available and recorded an additional income tax benefit of $1.7 million for alternative minimum tax credits that became refundable in accordance with the 2017 Tax Act. The Company also reported an increase in deferred tax assets of $6.8 million as a result of adjustments to tax attributes utilized for one-time transition tax, which was offset by a full valuation allowance. The most significant impacts of the 2017 Tax Act on the Company’s federal income taxes for the year ended December 31, 2017 were as follows: Reduction of the U.S. Corporate Income Tax Rate The Company measures deferred tax assets and liabilities using enacted tax rates that will apply in the years in which the temporary differences are expected to be recovered or paid. Accordingly, the Company’s deferred tax assets and liabilities were re-measured as of December 22, 2017 to reflect the reduction in the U.S. corporate income tax rate from 35 percent to 21 percent. The Company recorded an income tax benefit of $4.8 million for the year ended December 31, 2017, as the net deferred tax assets were reduced by $25.6 million with a corresponding valuation allowance reduction of $30.4 million. One-Time Transition Tax on Foreign Earnings As of December 31, 2017, the Company had $180.1 million of foreign earnings that was subject to the one-time transition tax. The Company used its 2017 and carryforward net operating losses to offset the impact of the transition tax. As the Company maintains a full valuation allowance against its U.S. deferred tax assets, the Company did not record an income tax expense related to the transition tax for the year ended December 31, 2017. Valuation Allowance The 2017 Tax Act modified the Net Operating Loss ("NOL") provisions to provide for an indefinite carryforward of NOLs arising in tax years beginning after December 31, 2017. The 2017 Tax Act also limits the amount of NOL deductions that can be used in any one year to 80 percent of the taxpayer’s taxable income, effective with respect to NOLs arising in tax years beginning after December 31, 2017. The Company recognized an income tax benefit of $6.5 million for the year ended December 31, 2017 related to a reduction in the Company’s valuation allowance as a result of the Company scheduling out the reversals of its net deferred tax assets which resulted in tax amortization on indefinite-lived intangible assets becoming available to offset existing deferred tax assets that are now expected to have an indefinite life. Deferred income taxes reflect the effect of temporary differences between the carrying amounts of assets and liabilities recognized for financial reporting purposes and the amounts recognized for tax purposes. The tax effects of the temporary differences were as follows:
|  | December 31,
|  | 2018 |  | 2017
|  | (in thousands)
Deferred tax assets: |  |  |  |  |  |
Inventory valuation |  | $ | 8,943 |  | $ | 8,007
Net operating losses |  |  | 67,787 |  |  | 73,458
Credit carry forwards |  |  | 52,592 |  |  | 34,966
Warranty and installation accruals |  |  | 1,695 |  |  | 1,690
Share-based compensation |  |  | 6,981 |  |  | 7,385
Other |  |  | 2,182 |  |  | 1,832
Total deferred tax assets |  |  | 140,180 |  |  | 127,338
Valuation allowance |  |  | (114,955) |  |  | (100,456)
Net deferred tax assets |  |  | 25,225 |  |  | 26,882
Deferred tax liabilities: |  |  |  |  |  |
Purchased intangible assets |  |  | 15,401 |  |  | 45,807
Convertible Senior Notes |  |  | 11,265 |  |  | 13,534
Depreciation |  |  | 2,380 |  |  | 1,339
Total deferred tax liabilities |  |  | 29,046 |  |  | 60,680
Net deferred taxes |  | $ | (3,821) |  | $ | (33,798)
The Company is no longer permanently reinvesting future earnings from certain foreign jurisdictions and has accrued for foreign tax withholdings of $0.6 million on its unremitted earnings as of December 31, 2018. At December 31, 2018, the Company had U.S. federal NOL carryforwards of approximately $281.4 million, of which $16.0 million has an indefinite carryforward period, with the remaining expiring in varying amounts between 2024 and 2037, if not utilized. In connection with the Ultratech acquisition, $119.0 million of historical NOL carryforwards were acquired, which are subject to an annual limitation. The Company has $3.5 million of capital loss carryforwards that expire in 2021. At December 31, 2018, the Company had U.S. federal research and development credits of $28.3 million that will expire between 2019 and 2038. The Ultratech acquisition resulted in the carryover of $11.4 million of research and development credit carryforwards, which are subject to an annual limitation. The Company also has $9.4 million of foreign tax credits that expire in 2027. Additionally, the Company has state and local NOL carryforwards of approximately $147.6 million (a net deferred tax asset of $9.0 million, net of federal tax benefits and before the valuation allowance) that will expire between 2019 and 2038. Finally, the Company has state credits of $27.4 million, some of which are indefinite and others that will expire between 2019 and 2033. The Company makes assessments to estimate if sufficient taxable income will be generated in the future to use existing deferred tax assets. As of December 31, 2018, the Company continued to have a cumulative three year loss with respect to its U.S. operations. As such, the Company has recorded a valuation allowance against its U.S. deferred tax assets. During 2018, the Company’s valuation allowance increased by approximately $14.5 million, including an increase of $6.8 million as a result of adjustments to tax attributes utilized for one-time transition tax. A roll-forward of the Company’s uncertain tax positions for all U.S. federal, state, and foreign tax jurisdictions was as follows:
|  | December 31,
|  | 2018 |  | 2017 |  | 2016
|  | (in thousands)
Balance at beginning of year |  | $ | 8,269 |  | $ | 7,452 |  | $ | 9,152
Additions for tax positions related to current year |  |  | 2,154 |  |  | 511 |  |  | 1,038
Additions for tax positions related to prior years |  |  | 1,721 |  |  | 3 |  |  | 233
Reductions for tax positions related to prior years |  |  | (934) |  |  | (4,877) |  |  | (2,826)
Reductions due to the lapse of the statute of limitations |  |  | (26) |  |  | (122) |  |  | (39)
Settlements |  |  | (47) |  |  | (287) |  |  | (106)
Additions for business combination |  |  | — |  |  | 5,589 |  |  | —
Balance at end of year |  | $ | 11,137 |  | $ | 8,269 |  | $ | 7,452
If the amount of unrecognized tax benefits at December 31, 2018 were recognized, the Company’s income tax provision would decrease by $1.5 million. The gross amount of interest and penalties accrued in income tax payable in the Consolidated Balance Sheets was approximately $0.3 million at both December 31, 2018 and 2017. The Company, or one of its subsidiaries, files income tax returns in the United States federal jurisdiction, and various state, local, and foreign jurisdictions. All material consolidated federal income tax matters have been concluded for years through 2015 subject to subsequent utilization of NOLs generated in such years. All material state and local income tax matters have been reviewed through 2012. The majority of the Company’s foreign jurisdictions have been reviewed through 2015. The Company’s major foreign jurisdictions’ statutes of limitation remain open with respect to the tax years 2017 for China, 2015 through 2017 for Germany and Singapore, and 2017 for Taiwan. The Company does not anticipate that its uncertain tax position will change significantly within the next twelve months subject to the completion of the ongoing tax audits and any resultant settlement.

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