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Income Taxes | 12 Months Ended
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Dec. 31, 2021
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES Income tax benefit consists of the following:
| Year Ended December 31, |  | Six-month Transition Period Ended December 31, |  | Years Ended June 30,
(in millions) | 2021 |  | 2020 |  | 2020 |  | 2019
Current: |  |  |  |  |  |  |
Federal | $ | (1.9) |  |  | $ | (75.8) |  |  | $ | 26.6 |  |  | $ | (24.2) |
State | 3.6 |  |  | (0.6) |  |  | 4.9 |  |  | (0.1) |
Foreign | 0.1 |  |  | 0.2 |  |  | 0.5 |  |  | 0.2 |
Total current | 1.8 |  |  | (76.2) |  |  | 32.0 |  |  | (24.1) |
Deferred: |  |  |  |  |  |  |
Federal | (33.7) |  |  | 39.1 |  |  | (51.5) |  |  | 17.8 |
State | 5.1 |  |  | (3.4) |  |  | (4.1) |  |  | 1.7 |
Foreign | 0.1 |  |  | (0.5) |  |  | (3.6) |  |  | 0.4 |
Change in valuation allowance | (3.2) |  |  | — |  |  | 3.5 |  |  | (0.2) |
Total deferred | (31.7) |  |  | 35.2 |  |  | (55.7) |  |  | 19.7 |
Total income tax benefit | $ | (29.9) |  |  | $ | (41.0) |  |  | $ | (23.7) |  |  | $ | (4.4) |
Income (loss) before income taxes consists of the following:
| Year Ended December 31, |  | Six-month Transition Period Ended December 31, |  | Years Ended June 30,
(in millions) | 2021 |  | 2020 |  | 2020 |  | 2019
United States | $ | (53.8) |  |  | $ | (101.8) |  |  | $ | (240.9) |  |  | $ | (0.6) |
Foreign | (3.3) |  |  | 7.7 |  |  | 17.6 |  |  | 0.6 |
Total | $ | (57.1) |  |  | $ | (94.1) |  |  | $ | (223.3) |  |  | $ | — |
The differences between income taxes at the statutory federal income tax rate and income taxes reported in the Consolidated Statements of Operations were as follows:
| Year Ended December 31, |  | Six-month Transition Period Ended December 31, |  | Years Ended June 30,
(in millions) | 2021 |  | 2020 |  | 2020 |  | 2019
Federal income tax expense at the statutory rate | $ | (12.0) |  |  | 21.0 | % |  | $ | (19.8) |  |  | 21.0 | % |  | $ | (46.9) |  |  | 21.0 | % |  | $ | — |  |  | 21.0 | %
State income taxes, net of federal benefit | (1.8) |  |  | 3.2 | % |  | (1.2) |  |  | 1.3 | % |  | 4.0 |  |  | (1.8) | % |  | 2.0 |  |  | 6,422.1 | %
Research and development credits | 2.5 |  |  | (4.4) | % |  | (1.3) |  |  | 1.4 | % |  | (2.8) |  |  | 1.3 | % |  | (3.7) |  |  | (11,880.9) | %
Uncertain tax positions | (3.0) |  |  | 5.3 | % |  | 0.6 |  |  | (0.7) | % |  | 1.5 |  |  | (0.7) | % |  | (4.2) |  |  | (13,486.4) | %
Incentive stock option and employee stock purchase plan expense | 0.7 |  |  | (1.2) | % |  | 2.5 |  |  | (2.7) | % |  | (0.2) |  |  | 0.1 | % |  | (3.1) |  |  | (9,954.3) | %
Foreign rate differential | 0.5 |  |  | (0.9) | % |  | (2.1) |  |  | 2.2 | % |  | 0.7 |  |  | (0.3) | % |  | 0.8 |  |  | 2,568.8 | %
Change in valuation allowance | (3.2) |  |  | 5.6 | % |  | (0.3) |  |  | 0.3 | % |  | 3.5 |  |  | (1.7) | % |  | (0.2) |  |  | (642.2) | %
CARES Act | 2.7 |  |  | (4.7) | % |  | (20.7) |  |  | 22.0 | % |  | — |  |  | — | % |  | — |  |  | — | %
Non-deductible meals and entertainment | 0.1 |  |  | (0.2) | % |  | 0.5 |  |  | (0.5) | % |  | 1.8 |  |  | (0.8) | % |  | 1.3 |  |  | 4,174.4 | %
Non-deductible officer compensation | 3.3 |  |  | (5.8) | % |  | 0.1 |  |  | (0.1) | % |  | 1.6 |  |  | (0.7) | % |  | 0.6 |  |  | 1,926.6 | %
Asset impairment | — |  |  | — | % |  | — |  |  | — | % |  | 12.6 |  |  | (5.6) | % |  | — |  |  | — | %
Non-deductible legal settlement | 2.5 |  |  | (4.5) | % |  | — |  |  | — | % |  | — |  |  | — | % |  | 1.9 |  |  | 6,101.0 | %
Acquisitions, Dispositions, and Contingent Consideration | (23.0) |  |  | 40.3 | % |  | 0.7 |  |  | (0.7) | % |  | (0.3) |  |  | 0.1 | % |  | 0.8 |  |  | 2,568.8 | %
Method changes or tax elections | — |  |  | — | % |  | — |  |  | — | % |  | — |  |  | — | % |  | (0.9) |  |  | (2,890.0) | %
Other, net | 0.8 |  |  | (1.4) | % |  | — |  |  | — | % |  | 0.8 |  |  | (0.3) | % |  | 0.3 |  |  | 963.4 | %
Total income tax benefit | $ | (29.9) |  |  | 52.3 | % |  | $ | (41.0) |  |  | 43.5 | % |  | $ | (23.7) |  |  | 10.6 | % |  | $ | (4.4) |  |  | -14,107.7 | %
The significant components of the Company’s deferred tax assets and liabilities were comprised of the following:
| December 31,
(in millions) | 2021 |  | 2020
Deferred tax assets: |  |  |
Net operating loss carryforwards | $ | 67.2 |  |  | $ | 72.2 |
Deferred revenue | 1.2 |  |  | 7.2 |
Stock compensation expense | 4.5 |  |  | 11.5 |
Research and development credits | 17.3 |  |  | 24.9 |
Lease right-of-use asset | 22.4 |  |  | 15.2 |
Accrued expenses and liabilities | 14.2 |  |  | 7.6 |
Other, net | 4.5 |  |  | 6.4 |
Total gross deferred tax assets | 131.3 |  |  | 145.0 |
Less valuation allowance | (38.5) |  |  | (42.0) |
Total deferred tax assets | 92.8 |  |  | 103.0 |
Deferred tax liabilities: |  |  |
Intangible assets | 104.9 |  |  | 144.0 |
Lease liability | 20.2 |  |  | 14.6 |
Property, plant and equipment | 3.5 |  |  | 15.7 |
Total deferred tax liabilities | 128.6 |  |  | 174.3 |
Net deferred tax liability | $ | (35.8) |  |  | $ | (71.3) |
The CARES Act in 2020 made various tax law changes, including among other things (i) increased the limitation under IRC Section 163(j) for 2019 and 2020 to permit additional expensing of interest, (ii) enacted technical corrections so that qualified improvement property can be immediately expensed under IRC Section 168(k) and net operating losses arising in fiscal tax years beginning before January 1, 2018 and ending after December 31, 2017 can be carried back two years and carried forward twenty years without a taxable income limitation as opposed to carried forward indefinitely, and (iii) made modifications to the federal net operating loss rules including permitting federal net operating losses incurred in 2018, 2019, and 2020 to be carried back to the five preceding taxable years. As a result of the provision provided under the CARES Act, the Company was able to carry-back federal net operating losses to previous periods, resulting in a $20.7 million tax benefit in the year ended December 31, 2020 and $2.7 million tax expense in the year ended December 31, 2021. The Company recognized the sale of Myriad RBM, Inc., Myriad myPath, LLC, and select assets of Crescendo Biosciences, LLC (formerly known as Crescendo Biosciences, Inc. ("CBI") in the year ended December 31, 2021, which resulted in differences between book and tax treatments. This resulted in the recognition of a $187.0 million capital loss for the tax basis in the stock of Crescendo, which the Company utilized in the current year due to the $282.3 million overall capital gain from the three divestitures. Other consequences due to the dispositions were the removal of deferred tax assets and corresponding valuation allowances. The overall net tax benefit of the divestitures during the year ended December 31, 2021 was $23.4 million. As a result of the economic impact of COVID-19, the Company has incurred a cumulative three-year loss. Pursuant to ASC Topic 740, the negative evidence of a cumulative loss may be difficult to overcome. However, the Company will have significant future taxable income resulting from the reversal of taxable temporary differences. Primarily due to the availability of such expected future taxable income, the Company concluded that it is more likely than not that the benefits of the majority of its deferred income tax assets will be realized. However, for certain deferred tax assets a valuation allowance has been established, primarily due to limitations imposed by I.R.C. Section 382 and certain jurisdictional limitations. For the year ended December 31, 2021, the Company's valuation allowance decreased by $3.5 million, primarily due to the expiration of Utah research credits upon which a valuation allowance had been established. The Company will continue to evaluate the impact that the COVID-19 pandemic may have on its results of operations and its ability to realize its deferred tax assets. At December 31, 2021, the Company had the following net operating loss and research credit carryforwards (tax effected), with their respective expiration periods. Certain carryforwards are subject to the limitations of Section 382 and 383 of the Internal Revenue Code as indicated (in millions):
Carryforwards |  | Amount |  | Subject to sections 382, 383 |  | Expires beginning in year |  | Through
Federal net operating loss |  | $ | 31.2 |  |  | Yes |  | 2036 |  | 2037
Federal capital loss |  | 13.5 |  |  | No |  | 2026 |  | 2026
Utah net operating loss |  | 2.4 |  |  | No |  | 2022 |  | Indefinite
California net operating loss |  | 3.9 |  |  | Yes |  | 2027 |  | 2042
Other state net operating loss |  | 7.4 |  |  | Yes |  | 2027 |  | 2041
Foreign net operating losses (various jurisdictions) |  | 8.8 |  |  | No |  | Various |  | Various
Federal research credit |  | 6.4 |  |  | Yes |  | 2027 |  | 2042
Utah research credit |  | 6.9 |  |  | No |  | 2022 |  | 2036
California research credit |  | 4.0 |  |  | No |  | Indefinite |  | Indefinite
Consistent with the indefinite reversal criteria of ASC 740, the Company intends to continue to invest undistributed earnings of its foreign subsidiaries indefinitely. However, due to the cumulative losses that have been incurred to date in such foreign operations, the changes of the Tax Cuts and Jobs Act and the aforementioned election to treat its foreign subsidiaries as disregarded entities, no deferred taxes related to the Company’s foreign operations have been recorded. For those foreign entities for which an election has been made to be treated as disregarded for U.S. tax purposes, the appropriate U.S. jurisdiction deferred tax assets and liabilities have been recorded. The Company provides for uncertain tax positions when such tax positions do not meet the recognition thresholds or measurement criteria as set forth in ASC 740. As of December 31, 2021, the Company had net unrecognized tax benefits of $32.1 million. The Company’s gross unrecognized tax benefits as of the year ended December 31, 2021, the transition period ended December 31, 2020 and the years ended June 30, 2020 and 2019, and the changes in those balances are as follows:
| Year Ended December 31, |  | Six-month Transition Period Ended December 31, |  | Years Ended June 30,
(in millions) | 2021 |  | 2020 |  | 2020 |  | 2019
Unrecognized tax benefits at the beginning of period | $ | 37.6 |  |  | $ | 23.5 |  |  | $ | 21.7 |  |  | $ | 24.9 |
Gross increases - current year tax positions | 1.4 |  |  | 13.9 |  |  | 1.6 |  |  | 2.2 |
Gross increases - prior year tax positions | 1.1 |  |  | 1.0 |  |  | 0.7 |  |  | 0.5 |
Gross increases - acquisitions | — |  |  | — |  |  | — |  |  | 2.3 |
Gross decreases - prior year tax positions | (2.8) |  |  | (0.1) |  |  | — |  |  | (0.1) |
Gross decreases - settlements | (5.1) |  |  | — |  |  | — |  |  | (2.7) |
Gross decreases - statute lapse | (0.1) |  |  | (0.7) |  |  | (0.5) |  |  | (5.4) |
Unrecognized tax benefits at end of year | $ | 32.1 |  |  | $ | 37.6 |  |  | $ | 23.5 |  |  | $ | 21.7 |
Interest and penalties in year-end balance | $ | 3.3 |  |  | $ | 2.2 |  |  | $ | 1.4 |  |  | $ | 0.8 |
Interest and penalties related to uncertain tax positions are included as a component of income tax expense and all other interest and penalties are included as a component of other income (expense). The Company files U.S. federal, foreign and state income tax returns in jurisdictions with various statutes of limitations. The Company is currently under audit by the state of California for years ended June 30, 2017-2018; the State of New Jersey for the years ended June 30, 2013-2017; and Switzerland for the years ended June 30, 2015-2016. Annual tax provisions include amounts considered necessary to pay assessments that may result from examination of prior year tax returns; however, the amount ultimately paid upon resolution of issues may differ materially from the amount accrued.

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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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