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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2019
Income Tax Disclosure [Abstract] |
Significant Components of (Loss) Income Before Income Taxes | Significant components of (Loss) Income before income taxes are as follows (in thousands):
|  | Year Ended December 31, |
|  | 2019 |  |  | 2018 |  |  | 2017 |
U.S. |  | $ | (476,925 | ) |  | $ | 56,114 |  |  | $ | 122,162 |
Non-U.S. |  |  | 1,646 |  |  |  | 815 |  |  |  | — |
(Loss) income before income taxes |  | $ | (475,279 | ) |  | $ | 56,929 |  |  | $ | 122,162 |
Schedule of Significant Components of the Income Tax Expense (Benefit) |
|  | Year Ended December 31, |
|  | 2019 |  |  | 2018 |  |  | 2017 |
Current: |  |  |  |  |  |  |  |  |  |  |  |
U.S. federal |  | $ | 1,501 |  |  | $ | 254 |  |  | $ | 5,966 |
U.S. state and local |  |  | 427 |  |  |  | 953 |  |  |  | 598 |
Non-U.S. |  |  | 448 |  |  |  | 220 |  |  |  | — |
Total current income tax expense |  |  | 2,376 |  |  |  | 1,427 |  |  |  | 6,564 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
U.S. federal |  |  | (27,692 | ) |  |  | 11,133 |  |  |  | (110,361 | )
U.S. state and local |  |  | (4,636 | ) |  |  | 5,560 |  |  |  | 1,516 |
Non-U.S. |  |  | (3 | ) |  |  | — |  |  |  | — |
Total deferred income tax (benefit) expense |  |  | (32,331 | ) |  |  | 16,693 |  |  |  | (108,845 | )
Income tax (benefit) expense |  | $ | (29,955 | ) |  | $ | 18,120 |  |  | $ | (102,281 | )
Schedule of Income Tax Provision Differed from Amounts Computed at the Statutory Federal Income Tax Rate | The income tax provision differed from amounts computed at the statutory federal income tax rate, as follows (in thousands, except percentage):
|  | Year Ended December 31, |  |
|  | 2019 |  |  |  | 2018 |  |  |  | 2017 (1) (2) |  |
|  | $ |  |  | % |  |  |  | $ |  |  | % |  |  |  | $ |  |  | % |  |
Income tax provision at statutory rate |  | $ | (99,808 | ) |  |  | 21.0 |  | % |  | $ | 11,955 |  |  |  | 21.0 |  | % |  | $ | 42,757 |  |  |  | 35.0 |  | %
Tax effect of pre-Separation earnings |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  | — |  |  |  |  | (16,210 | ) |  |  | (13.3 | ) |
State income taxes, net of federal income tax benefit |  |  | (5,374 | ) |  |  | 1.1 |  |  |  |  | 2,668 |  |  |  | 4.7 |  |  |  |  | 2,294 |  |  |  | 1.9 |  |
Book impairment and other permanent differences |  |  | 71,650 |  |  |  | (15.1 | ) |  |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  | — |  |
Effect of change in apportionment factors (3) |  |  | 928 |  |  |  | (0.2 | ) |  |  |  | 3,467 |  |  |  | 6.1 |  |  |  |  | — |  |  |  | — |  |
Write-off of permanent outside basis difference |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  | — |  |  |  |  | (50,687 | ) |  |  | (41.5 | ) |
Effect of U.S. federal tax rate change (4) |  |  | — |  |  |  | — |  |  |  |  | — |  |  |  | — |  |  |  |  | (80,298 | ) |  |  | (65.7 | ) |
Other, net |  |  | 2,649 |  |  |  | (0.5 | ) |  |  |  | 30 |  |  |  | — |  |  |  |  | (137 | ) |  |  | (0.1 | ) |
Income tax (benefit) expense |  | $ | (29,955 | ) |  |  | 6.3 |  | % |  | $ | 18,120 |  |  |  | 31.8 |  | % |  | $ | (102,281 | ) |  |  | (83.7 | ) | %
| (1) | On February 3, 2017, the Company entered into a Tax Matters Agreement with TEGNA, which governs the tax relationship between the Company and TEGNA for the tax periods through the May 31, 2017 Separation of the Company from TEGNA. Under this agreement, TEGNA is responsible for all payments of federal and state income tax due with respect to pre-closing tax liabilities. Accordingly, TEGNA prepared all federal, state and local income tax returns for the pre-closing period. Pursuant to the Tax Matters Agreement, TEGNA agreed to indemnify the Company for: (1) all pre-closing taxes, including any pre-closing taxes resulting from any audit, amendment, other change or adjustment, (2) any taxes resulting from a breach by TEGNA of any covenant in the Tax Matters Agreement and (3) any stamp, sales and use, gross receipts, value-added or other transfer taxes imposed on TEGNA on the Separation of the Company from TEGNA, any refund of pre-closing taxes, or other taxes for which TEGNA is responsible are for the benefit of, and will be paid to, TEGNA. The Company agreed to indemnify TEGNA for: (1) all post-closing taxes, (2) any taxes resulting from a breach by the Company of any covenant in the Tax Matters Agreement, (3) any tax arising from the failure or breach of any representation or covenant made by the Company which failure or breach results in the intended tax consequences of the Separation transaction not being achieved and (4) any stamp, sales and use, gross receipts, value-added or other transfer tax imposed on the Company on the Separation of the Company from TEGNA.
| (2) | The income tax benefit for the year ended December 31, 2017 is based upon seven months of Cars.com, LLC activity and twelve months of DealerRater activity.
| (3) | This reflects changes in apportionment factors upon the finalization of the post-Spin 2017 state tax returns in the fourth quarter of 2018.
| (4) | On December 22, 2017, the U.S. government enacted comprehensive tax legislation, which made broad and complex changes to the U.S. tax code, including, but not limited to, the following that impact the Company: (1) reducing the U.S. federal corporate income tax rate from 35% to 21%; (2) enhancing and extending the option to claim accelerated depreciation deductions by allowing full expensing of qualified property through 2022; (3) limiting the deductibility of certain executive compensation; and (4) limiting certain other deductions. The Company recorded net tax expense of $80.3 million in 2017 related to the revaluation of its net deferred tax liabilities, in accordance with ASC 740.
Significant Components of Deferred Tax Assets and Liabilities | Significant components of the deferred tax assets and liabilities are as follows (in thousands):
|  | December 31, |
|  | 2019 |  |  | 2018 |
Deferred income tax liabilities: |  |  |  |  |  |  |  |
Depreciation |  | $ | (4,459 | ) |  | $ | (4,629 | )
Intangibles |  |  | (150,090 | ) |  |  | (183,632 | )
Lease obligations |  |  | (3,893 | ) |  |  | — |
Other |  |  | (1,420 | ) |  |  | (1,217 | )
Total deferred tax liabilities |  | $ | (159,862 | ) |  | $ | (189,478 | )
Deferred income tax assets: |  |  |  |  |  |  |  |
Accrued compensation |  | $ | 5,742 |  |  | $ | 4,098 |
Right of use assets |  |  | 3,793 |  |  |  | — |
Unfavorable contracts liability |  |  | — |  |  |  | 4,739 |
NOL and tax credit carryforwards |  |  | 11,152 |  |  |  | — |
Other |  |  | 6,179 |  |  |  | 2,725 |
Total deferred tax assets |  | $ | 26,866 |  |  | $ | 11,562 |
Less: Valuation allowance |  |  | — |  |  |  | — |
Net deferred tax liability |  | $ | (132,996 | ) |  | $ | (177,916 | )
Summary of Uncertain Tax Positions | A summary of the Company’s uncertain tax positions is as follows (in thousands):
|  | Year Ended December 31, |
|  | 2019 |  |  | 2018 |
Balance as of January 1 |  | $ | 595 |  |  | $ | — |
Additions for tax positions of prior years |  |  | 906 |  |  |  | 595 |
Income before income taxes |  | $ | 1,501 |  |  | $ | 595 |

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