XML 47 R24.htm IDEA: XBRL DOCUMENT
v3.8.0.1

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2017
Income Tax Disclosure [Abstract] |
Income Taxes |
17. | Income Taxes
Consolidated income (loss) before provision for income taxes consisted of the following (in thousands):
|  | Year Ended December 31, |
|  | 2017 |  |  | 2016 |  |  | 2015 |
U.S. |  | $ | (95,898 | ) |  | $ | (114,484 | ) |  | $ | (107,450 | )
Non U.S. |  |  | 744 |  |  |  | 2,040 |  |  |  | 656 |
Total |  | $ | (95,154 | ) |  | $ | (112,444 | ) |  | $ | (106,794 | )
No income tax expense was recorded for the years ended December 31, 2017, 2016 and 2015 due to net operating loss carryforwards to offset the net income at Dynavax GmbH and a valuation allowance which offsets the deferred tax assets. The difference between the consolidated income tax benefit and the amount computed by applying the federal statutory income tax rate to the consolidated loss before income taxes was as follows (in thousands):
|  | Year Ended December 31, |
|  | 2017 |  |  | 2016 |  |  | 2015 |
Income tax benefit at federal statutory rate |  | $ | (32,352 | ) |  | $ | (38,183 | ) |  | $ | (36,301 | )
State tax |  |  | (4,482 | ) |  |  | (334 | ) |  |  | (394 | )
Business credits |  |  | (1,960 | ) |  |  | (1,950 | ) |  |  | (2,622 | )
Deferred compensation charges |  |  | 3,823 |  |  |  | 3,016 |  |  |  | 1,481 |
Change in valuation allowance |  |  | (109,165 | ) |  |  | 36,751 |  |  |  | 36,766 |
Rate change |  |  | 86,943 |  |  |  | - |  |  |  | - |
Net operating loss and tax credit limitation |  |  | 56,962 |  |  |  | - |  |  |  | - |
Other |  |  | 231 |  |  |  | 700 |  |  |  | 1,070 |
Total income tax expense |  | $ | - |  |  | $ | - |  |  | $ | - |
Deferred tax assets and liabilities consisted of the following (in thousands):
|  | December 31, |
|  | 2017 |  |  | 2016 |
Deferred tax assets: |  |  |  |  |  |  |  |
Net operating loss carry forwards |  | $ | 146,300 |  |  | $ | 249,510 |
Research tax credit carry forwards |  |  | 29,658 |  |  |  | 29,463 |
Accruals and reserves |  |  | 6,551 |  |  |  | 8,684 |
Capitalized research costs |  |  | 1,422 |  |  |  | 4,457 |
Other |  |  | 731 |  |  |  | 1,303 |
Total deferred tax assets |  |  | 184,662 |  |  |  | 293,417 |
Less valuation allowance |  |  | (184,388 | ) |  |  | (293,145 | )
Net deferred tax assets |  |  | 274 |  |  |  | 272 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Fixed assets |  |  | (274 | ) |  |  | (272 | )
Total deferred tax liabilities |  |  | (274 | ) |  |  | (272 | )
Net deferred tax assets |  | $ | - |  |  | $ | - |
The tax benefit of net operating losses, temporary differences and credit carryforwards is required to be recorded as an asset to the extent that management assesses that realization is “more likely than not.” Realization of the future tax benefits is dependent on our ability to generate sufficient taxable income within the carryforward period. Because of our recent history of operating losses, management believes that recognition of the deferred tax assets arising from the above-mentioned future tax benefits is currently not likely to be realized and, accordingly, has provided a full valuation allowance. The valuation allowance decreased by $108.8 million during the year ended December 31 2017 and increased by $36.4 million and $36.2 million during the years ended December 31, 2016 and 2015, respectively. On December 22, 2017, the Tax Act was signed into law. Among other changes is a permanent reduction in the federal corporate income tax rate from 35% to 21% effective January 1, 2018. As a result of the reduction in the corporate income tax rate, the Company has revalued its net deferred tax assets at December 31, 2017. We estimate that this will result in a reduction in the value of our net deferred tax assets of approximately $87 million, which will be offset by the change in valuation allowance of $87 million. The Tax Act also adopts elements of a territorial tax system while assessing a repatriation tax or “toll-charge” on undistributed earnings and profits of U.S.-owned foreign corporations. At this time, management has estimated the repatriation of undistributed earnings and profits of U.S. owned foreign corporations will result in a provisional income inclusion of $0.7 million, which will be fully offset by a current year loss. Other than the U.S. taxation of these amounts, we intend to continue to invest these earnings indefinitely outside of the U.S. and do not expect to incur any additional taxes related to such amounts. As of December 31, 2017, we had federal net operating loss carryforwards of approximately $629.1 million, which will expire in the years 2018 through 2037 and federal research and development tax credits of approximately $16.9 million, which expire in the years 2018 through 2037. As of December 31, 2017, we had net operating loss carryforwards for California and other states for income tax purposes of approximately $168.4 million, which expire in the years 2026 through 2037, and California state research and development tax credits of approximately $17.4 million, which do not expire. As of December 31, 2017, we had net operating loss carryforwards for foreign income tax purposes of approximately $15.5 million, which do not expire. Uncertain Income Tax positions The total amount of unrecognized tax benefits was $1.2 million and $2.4 million as of December 31, 2017 and 2016, respectively. If recognized, none of the unrecognized tax benefits would affect the effective tax rate. The following table summarizes the activity related to the Company’s unrecognized tax benefits:
Balance at December 31, 2016 |  | $ | (2,426 | )
Tax positions related to the current year |  |  |  |
Additions |  |  | - |
Reductions |  |  | - |
Tax positions related to the prior year |  |  |  |
Additions |  |  | - |
Reductions |  |  | 1,197 |
Balance at December 31, 2017 |  | $ | (1,229 | )
Our policy is to account for interest and penalties as income tax expense. As of December 31, 2017, the Company had no interest related to unrecognized tax benefits. No amounts of penalties related to unrecognized tax benefits were recognized in the provision for income taxes. We do not anticipate any significant change within 12 months of this reporting date of its uncertain tax positions. The Tax Reform Act of 1986 limits the annual use of net operating loss and tax credit carryforwards in certain situations where changes occur in stock ownership of a company. In the event the Company has a change in ownership, as defined, the annual utilization of such carryforwards could be limited. Based on an analysis under Section 382 of the Internal Revenue Code, the Company experienced ownership changes in 2008, 2009 and 2012 which limit the future use of its pre-change federal net operating loss carryforwards and federal research and development tax credits. The Company has excluded these federal net operating loss carryforwards and federal research and development tax credits that will expire as a result of the annual limitations in the deferred tax assets as of December 31, 2017. A limitation calculation has not been performed with respect to the California net operating loss carryforwards and research and development tax credits and we believe that our ability to use these California net operating loss carryforwards and research and development tax credits in the future may be limited. We are subject to income tax examinations for U.S. federal and state income taxes from 1998 forward. We are subject to tax examination in Germany from 2014 forward.

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