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INCOME TAXES | 12 Months Ended
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Dec. 31, 2021
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES The components of pretax income (loss) from continuing operations for the years ended December 31, 2021, 2020 and 2019 were as follows (in thousands):
| Year Ended December 31,
| 2021 |  | 2020 |  | 2019
United States | $ | 60,875 |  |  | $ | (55,699) |  |  | $ | 6,758 |
International | 27,150 |  |  | (238,367) |  |  | (20,289) |
Income (loss) before provision (benefit) for income taxes | $ | 88,025 |  |  | $ | (294,066) |  |  | $ | (13,531) |
The provision (benefit) for income taxes from continuing operations for the years ended December 31, 2021, 2020 and 2019 consisted of the following components (in thousands):
| Year Ended December 31,
| 2021 |  | 2020 |  | 2019
Current taxes: |  |  |  |  |
U.S. federal | $ | 2,354 |  |  | $ | (180) |  |  | $ | (5,901) |
State | 1,629 |  |  | 1,719 |  |  | 929 |
International | (2,321) |  |  | (1,942) |  |  | 7,218 |
Total current taxes | 1,662 |  |  | (403) |  |  | 2,246 |
Deferred taxes: |  |  |  |  |
U.S. federal | (15,254) |  |  | 32 |  |  | 32 |
State | (16,864) |  |  | 114 |  |  | (9) |
International | (1,867) |  |  | (7,247) |  |  | (1,508) |
Total deferred taxes | (33,985) |  |  | (7,101) |  |  | (1,485) |
Provision (benefit) for income taxes | $ | (32,323) |  |  | $ | (7,504) |  |  | $ | 761 |
All of the provision (benefit) for income taxes of $(32.3) million, $(7.5) million and $0.8 million for the years ended December 31, 2021, 2020 and 2019 was related to continuing operations. The items accounting for differences between the income tax provision (benefit) from continuing operations computed at the U.S. federal statutory rate and the provision (benefit) for income taxes for the years ended December 31, 2021, 2020 and 2019 were as follows (in thousands):
| Year Ended December 31,
| 2021 |  | 2020 |  | 2019
U.S. federal income tax provision (benefit) at statutory rate | $ | 18,485 |  |  | $ | (61,805) |  |  | $ | (2,842) |
Foreign income and losses taxed at different rates (1) | 5,000 |  |  | 8,608 |  |  | 5,529 |
State income taxes, net of federal benefits, and state tax credits | 4,897 |  |  | 6,487 |  |  | 5,297 |
Change in valuation allowances | (50,695) |  |  | (4,474) |  |  | (10,074) |
Effect of income tax rate changes on deferred items | 815 |  |  | 618 |  |  | (3,443) |
Adjustments related to uncertain tax positions | 2,588 |  |  | (15,518) |  |  | (12,418) |
Non-deductible stock-based compensation expense | 2,727 |  |  | 3,803 |  |  | 6,355 |
Tax (windfalls)/shortfalls on stock-based compensation awards | (1,762) |  |  | 3,876 |  |  | 2,042 |
Federal research and development credits, net of adjustments | (396) |  |  | 6,043 |  |  | 3,447 |
Forgiveness of intercompany liabilities | (62) |  |  | (2,863) |  |  | 67 |
Net operating loss expiration | — |  |  | 19,962 |  |  | 12,537 |
Goodwill impairment | — |  |  | 23,202 |  |  | — |
Observable price change on an other equity investment | (17,955) |  |  | — |  |  | (8,644) |
Non-deductible or non-taxable items | 4,035 |  |  | 4,557 |  |  | 2,908 |
Provision (benefit) for income taxes | $ | (32,323) |  |  | $ | (7,504) |  |  | $ | 761 |
(1)Tax rates in foreign jurisdictions were generally lower than the U.S. federal statutory rate through December 31, 2021. This resulted in an adverse impact to the provision (benefit) for income taxes in this rate reconciliation for the years ended December 31, 2021, 2020 and 2019 prior to the impact of valuation allowances, due to the net pretax losses from continuing operations in certain foreign jurisdictions with lower tax rates. The deferred income tax assets and liabilities consisted of the following components as of December 31, 2021 and 2020 (in thousands):
| December 31,
| 2021 |  | 2020
Deferred tax assets: |  |  |
Accrued expenses and other liabilities | $ | 45,532 |  |  | $ | 54,699 |
Operating lease obligation | 10,890 |  |  | 16,279 |
Stock-based compensation | 4,014 |  |  | 5,129 |
Net operating loss and tax credit carryforwards | 140,787 |  |  | 142,835 |
Intangible assets, net | 20,357 |  |  | 22,974 |
Investments | 20,581 |  |  | 24,885 |
Convertible senior notes | 5,929 |  |  | — |
Unrealized foreign currency exchange losses | 1,078 |  |  | 1,244 |
Other | 244 |  |  | 985 |
Total deferred tax assets | 249,412 |  |  | 269,030 |
Less: Valuation allowances | (145,105) |  |  | (212,143) |
Deferred tax assets, net of valuation allowance | 104,307 |  |  | 56,887 |
Deferred tax liabilities: |  |  |
Prepaid expenses and other assets | (14,605) |  |  | (12,288) |
Property, equipment and software, net | (9,511) |  |  | (8,211) |
Right-of-use asset | (7,293) |  |  | (11,433) |
Convertible senior notes | — |  |  | (1,163) |
Deferred revenue | (12,755) |  |  | (15,369) |
Total deferred tax liabilities | (44,164) |  |  | (48,464) |
Net deferred tax asset (liability) | $ | 60,143 |  |  | $ | 8,423 |
We recognize deferred tax assets to the extent that they will be realizable through future reversals of existing taxable temporary differences, through taxable income in carryback years for the applicable jurisdictions or based on projections of future income for those jurisdictions that have achieved sustained profitability. In evaluating the need for a valuation allowance, management considers both positive and negative evidence that could affect its view of the future realization of deferred tax assets and places greater weight on recent and objectively verifiable current information. As of December 31, 2021, we have demonstrated sustained profitability and are forecasting pre-tax earnings in the U.S., which have been considered to be sources of positive evidence. In analyzing all available evidence, management determined there is sufficient positive evidence outweighing negative evidence to conclude that it is more likely than not that a portion of the U.S. deferred tax assets is realizable. As a result, we released $57.7 million of the valuation allowance against our federal and state deferred tax assets, resulting in a $50.3 million reduction to expense, and a $7.4 million adjustment to equity. We continue to maintain a valuation allowance in the U.S. against capital losses, deferred tax assets that will convert into capital losses upon reversal, and state credits that we are not expecting to be able to realize, and substantially all of our foreign deferred tax assets. We had $22.0 million of federal net operating loss carryforwards as of December 31, 2021 which will begin expiring in 2027. We had $61.7 million of state net operating loss carryforwards as of December 31, 2021, which will begin expiring in 2023. As of December 31, 2021, we had $489.8 million of foreign net operating loss carryforwards, a significant portion of which carry forward for an indefinite period. We are subject to taxation in the United States, state jurisdictions and foreign jurisdictions. Significant judgment is required in determining the worldwide provision for income taxes and recording the related income tax assets and liabilities. We recognize the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more-likely-than-not criterion, the amount recognized in the financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. The following table summarizes activity related to our gross unrecognized tax benefits, excluding interest and penalties, for the years ended December 31, 2021, 2020 and 2019 (in thousands):
| Year Ended December 31,
| 2021 |  | 2020 |  | 2019
Beginning Balance | $ | 48,960 |  |  | $ | 64,361 |  |  | $ | 87,637 |
Increases related to prior year tax positions | 5,105 |  |  | 8,389 |  |  | 3,754 |
Decreases related to prior year tax positions | (3,138) |  |  | (22,541) |  |  | (28,767) |
Increases related to current year tax positions | 1,887 |  |  | 1,994 |  |  | 6,086 |
Decreases based on settlements with taxing authorities | — |  |  | — |  |  | — |
Decreases due to lapse of statute limitations | (2,530) |  |  | (5,640) |  |  | (3,875) |
Foreign currency translation | (782) |  |  | 2,397 |  |  | (474) |
Ending Balance | $ | 49,502 |  |  | $ | 48,960 |  |  | $ | 64,361 |
The total amount of unrecognized tax benefits as of December 31, 2021, 2020 and 2019 that, if recognized, would affect the effective tax rate are $18.7 million, $19.9 million and $25.1 million. We recognized $1.0 million, $1.0 million and $1.4 million of interest and penalties within Provision (benefit) for income taxes on our consolidated statements of operations for the years ended December 31, 2021, 2020 and 2019. Total accrued interest and penalties as of December 31, 2021 and 2020 were $5.6 million and $4.9 million, and are included within Other non-current liabilities in our consolidated balance sheets. We are currently under audit by several foreign jurisdictions. It is likely that the examination phase of some of those audits will conclude in the next 12 months. There are many factors, including factors outside of our control, which influence the progress and completion of those audits. We recognized income tax benefits of $3.2 million, $8.9 million and $12.3 million for the years ended December 31, 2021, 2020 and 2019, as a result of new information that impacted our estimates of the amounts that are more likely than not of being realized upon settlement of the related tax positions and due to expirations of the applicable statutes of limitations. We are subject to claims for tax assessments by foreign jurisdictions, including a proposed assessment for $118.5 million, inclusive of estimated incremental interest from the original assessment. We believe that the assessment, which primarily relates to transfer pricing on transactions occurring in 2011, is without merit and we intend to vigorously defend ourselves in that matter. In addition to any potential increases in our liabilities for uncertain tax positions from the ultimate resolution of that assessment, we believe that it is reasonably possible that reductions of up to $26.2 million in unrecognized tax benefits may occur within the 12 months following December 31, 2021 upon closing of income tax audits or the expiration of applicable statutes of limitations. In general, it is our practice and intention to reinvest the earnings of our non-U.S. subsidiaries in those operations. Additionally, while we did not incur the deemed repatriation tax, an actual repatriation from our non-U.S. subsidiaries could be subject to foreign and U.S. state income taxes. Aside from limited exceptions for which the related deferred tax liabilities recognized as of December 31, 2021 and 2020 are immaterial, we do not intend to distribute earnings of foreign subsidiaries for which we have an excess of the financial reporting basis over the tax basis of our investments and therefore have not recorded any deferred taxes related to such amounts. The actual tax cost resulting from a distribution would depend on income tax laws and circumstances at the time of distribution. Determination of the amount of unrecognized deferred tax liability related to the excess of the financial reporting basis over the tax basis of our foreign subsidiaries is not practical due to the complexities associated with the calculation

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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://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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