XML 38 R25.htm IDEA: XBRL DOCUMENT
v3.10.0.1

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2018
Income Tax Disclosure [Abstract] |
Income Taxes |
1 8. | Income Taxes
Consolidated (loss) income before provision for income taxes consisted of the following (in thousands):
|  | Year Ended December 31, |
|  | 2018 |  |  | 2017 |  |  | 2016 |
U.S. |  | $ | (160,032 | ) |  | $ | (95,898 | ) |  | $ | (114,484 | )
Non U.S. |  |  | 1,133 |  |  |  | 744 |  |  |  | 2,040 |
Total |  | $ | (158,899 | ) |  | $ | (95,154 | ) |  | $ | (112,444 | )
No income tax expense was recorded for the years ended December 31, 2018, 2017 and 2016 due to our full valuation allowance position. 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, |
|  | 2018 |  |  | 2017 |  |  | 2016 |
Income tax benefit at federal statutory rate |  | $ | (33,366 | ) |  | $ | (32,352 | ) |  | $ | (38,183 | )
State tax |  |  | (5,591 | ) |  |  | (4,482 | ) |  |  | (334 | )
Business credits |  |  | (3,065 | ) |  |  | (1,960 | ) |  |  | (1,950 | )
Deferred compensation charges |  |  | (1,165 | ) |  |  | 3,823 |  |  |  | 3,016 |
Change in valuation allowance |  |  | 43,134 |  |  |  | (109,165 | ) |  |  | 36,751 |
Rate change |  |  | - |  |  |  | 86,943 |  |  |  | - |
Net operating loss and tax credit limitation |  |  | - |  |  |  | 56,962 |  |  |  | - |
Other |  |  | 53 |  |  |  | 231 |  |  |  | 700 |
Total income tax expense |  | $ | - |  |  | $ | - |  |  | $ | - |
Deferred tax assets and liabilities consisted of the following (in thousands):
|  | December 31, |
|  | 2018 |  |  | 2017 |
Deferred tax assets: |  |  |  |  |  |  |  |
Net operating loss carry forwards |  | $ | 178,730 |  |  | $ | 146,300 |
Research tax credit carry forwards |  |  | 34,064 |  |  |  | 29,658 |
Accruals and reserves |  |  | 10,137 |  |  |  | 6,551 |
Capitalized research costs |  |  | 943 |  |  |  | 1,422 |
Other |  |  | 1,147 |  |  |  | 731 |
Total deferred tax assets |  |  | 225,021 |  |  |  | 184,662 |
Less valuation allowance |  |  | (224,746 | ) |  |  | (184,388 | )
Net deferred tax assets |  |  | 275 |  |  |  | 274 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Fixed assets |  |  | (275 | ) |  |  | (274 | )
Total deferred tax liabilities |  |  | (275 | ) |  |  | (274 | )
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 increased by $40.4 million during the year ended December 31, 2018 due to an increase in our deferred tax assets and decreased by $108.8 million during the year ended December 31, 2017 primarily as a result of the reduction in our deferred tax assets resulting from the decrease in the U.S. federal statutory tax rate. On December 22, 2017, President Trump signed U.S. tax reform legislation, commonly referred to as the Tax Cuts and Jobs Act (the “Tax Act”), which became effective January 1, 2018. The Tax Act significantly changes the fundamentals of U.S. corporate income taxation by, among many other things, reducing the U.S. federal corporate income tax rate to 21%, converting to a territorial tax system, and creating various income inclusion and expense limitation provisions. Also on December 22, 2017, The Securities and Exchange Commission staff issued Staff Accounting Bulletin (“SAB”) 118 to provide guidance for companies that are not able to complete their accounting for the income tax effects of the Tax Act in the period of enactment. SAB 118 provides for a measurement period of up to one year from the date of enactment. During the measurement period, companies need to reflect adjustments to any provisional amounts if it obtains, prepares or analyzes additional information about facts and circumstances that existed as of the enactment date that, if known, would have affected the income tax effects initially reported as provisional amounts. At December 31, 2018 we have completed our analysis of the Tax Act. The Act included a re-measurement of our net U.S. deferred tax assets reducing the U.S. federal corporate rate to 21%, which was offset by a valuation allowance. During 2018, this amount was finalized and no additional adjustment was required due to the change in corporate tax rate. The one-time transition tax is based on our total post-1986 earnings and profits that we previously deferred from U.S. income taxes. In 2017 we recorded a provisional amount for our one-time transition tax liability for our foreign subsidiaries. In 2018 the transition tax calculation was completed. The transition tax that we calculated resulted in an immaterial reduction income from the provisional amount recorded in 2017. Also effective for 2018 is a new Global Intangible Low-Taxed Income inclusion (“GILTI”). The GILTI income inclusion did not have a material impact on our 2018 current loss or valuation allowance position. We elected to account for GILTI as a period cost in the year the income or tax is incurred. As of December 31, 2018, we had federal net operating loss carryforwards of approximately $771.8 million, which will begin to expire in the year 2019 and federal research and development tax credits of approximately $19.9 million, which expire in the years 2019 through 2038. As of December 31, 2018, we had net operating loss carryforwards for California and other states for income tax purposes of approximately $229.0 million, which expire in the years 2019 through 2038, and California state research and development tax credits of approximately $19.1 million, which do not expire. As of December 31, 2018, we had net operating loss carryforwards for foreign income tax purposes of approximately $11.9 million, which do not expire. Uncertain Income Tax positions The total amount of unrecognized tax benefits was $1.2 million as of each of the years ended December 31, 2018 and 2017. If recognized, none of the unrecognized tax benefits would affect the effective tax rate. The following table summarizes the activity related to our unrecognized tax benefits:
Balance at December 31, 2017 |  | $ | (1,229 | )
Tax positions related to the current year |  |  |  |
Additions |  |  | - |
Reductions |  |  | - |
Tax positions related to the prior year |  |  |  |
Additions |  |  | - |
Reductions |  |  | - |
Balance at December 31, 2018 |  | $ | (1,229 | )
Our policy is to account for interest and penalties as income tax expense. As of December 31, 2018, there was 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 there is 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, completed through December 31, 2018, we 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. We 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, 2018. 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 1999 forward. We are subject to tax examination in Germany from 2017 forward and in India from 2018 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://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