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INCOME TAXES | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES Income tax expense (benefit) consists of the following:
| Years Ended December 31,
(in millions) | 2024 |  | 2023 |  | 2022
Current: |  |  |  |  |
Federal | $ | 3.4 |  |  | $ | 3.4 |  |  | $ | (0.5) |
State | 1.5 |  |  | 1.8 |  |  | 1.9 |
Foreign | 1.2 |  |  | 0.2 |  |  | 0.5 |
Total current | 6.1 |  |  | 5.4 |  |  | 1.9 |
Deferred: |  |  |  |  |
Federal | (15.5) |  |  | (51.8) |  |  | (25.8) |
State | (5.5) |  |  | (5.2) |  |  | (4.8) |
Foreign | 3.1 |  |  | 0.1 |  |  | (2.9) |
Change in valuation allowance | 15.6 |  |  | 52.6 |  |  | 3.0 |
Total deferred | (2.3) |  |  | (4.3) |  |  | (30.5) |
Total income tax expense (benefit) | $ | 3.8 |  |  | $ | 1.1 |  |  | $ | (28.6) |
Loss before income taxes consists of the following:
| Years Ended December 31,
(in millions) | 2024 |  | 2023 |  | 2022
United States | $ | (125.4) |  |  | $ | (263.2) |  |  | $ | (141.3) |
Foreign | 1.9 |  |  | 1.0 |  |  | 0.7 |
Total | $ | (123.5) |  |  | $ | (262.2) |  |  | $ | (140.6) |
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:
| Years Ended December 31,
(in millions) | 2024 |  | 2023 |  | 2022
Federal income tax benefit at the statutory rate | $ | (25.9) |  |  | 21.0 | % |  | $ | (54.9) |  |  | 21.0 | % |  | $ | (29.5) |  |  | 21.0 | %
State income taxes, net of federal benefit | (2.4) |  |  | 1.9 | % |  | (4.1) |  |  | 1.6 | % |  | (3.3) |  |  | 2.3 | %
Research and development credits | (0.4) |  |  | 0.3 | % |  | (1.6) |  |  | 0.6 | % |  | (3.5) |  |  | 2.5 | %
Uncertain tax positions | 2.8 |  |  | (2.3) | % |  | 3.7 |  |  | (1.4) | % |  | 0.6 |  |  | (0.4) | %
Stock-based incentive awards | 0.8 |  |  | (0.6) | % |  | 1.2 |  |  | (0.5) | % |  | 2.5 |  |  | (1.8) | %
Foreign rate differential | 3.3 |  |  | (2.7) | % |  | (0.4) |  |  | 0.2 | % |  | — |  |  | — | %
Change in valuation allowance | 15.7 |  |  | (12.7) | % |  | 52.6 |  |  | (20.1) | % |  | 2.6 |  |  | (1.8) | %
Non-deductible officer compensation | 3.9 |  |  | (3.2) | % |  | 3.0 |  |  | (1.1) | % |  | 3.5 |  |  | (2.5) | %
Acquisitions and dispositions | 5.1 |  |  | (4.1) | % |  | 0.1 |  |  | — | % |  | (0.1) |  |  | 0.1 | %
Other, net | 0.9 |  |  | (0.7) | % |  | 1.5 |  |  | (0.7) | % |  | (1.4) |  |  | 0.9 | %
Total income tax expense (benefit) | $ | 3.8 |  |  | (3.1) | % |  | $ | 1.1 |  |  | (0.4) | % |  | $ | (28.6) |  |  | 20.3 | %
The significant components of the Company’s deferred tax assets and liabilities were comprised of the following:
| December 31,
(in millions) | 2024 |  | 2023
Deferred tax assets: |  |  |
Net operating loss carryforwards | $ | 62.7 |  |  | $ | 77.1 |
Stock compensation expense | 6.6 |  |  | 5.0 |
Research and development credits | 20.6 |  |  | 20.8 |
Lease liability | 24.4 |  |  | 28.0 |
Capitalized research and development costs | 54.3 |  |  | 38.4 |
Accrued expenses and liabilities | 16.5 |  |  | 22.5 |
Other, net | — |  |  | 3.2 |
Total gross deferred tax assets | 185.1 |  |  | 195.0 |
Less valuation allowance | (111.9) |  |  | (95.0) |
Total deferred tax assets | 73.2 |  |  | 100.0 |
Deferred tax liabilities: |  |  |
Intangible assets | 55.5 |  |  | 84.2 |
Lease right-of-use assets | 13.3 |  |  | 15.5 |
Property, plant and equipment | 3.2 |  |  | 1.9 |
Other, net | 0.8 |  |  | — |
Total deferred tax liabilities | 72.8 |  |  | 101.6 |
Net deferred tax asset (liability) | $ | 0.4 |  |  | $ | (1.6) |
The Company incurred a loss in the current year and the two preceding years, resulting in a three-year cumulative loss. Pursuant to ASC 740, Income Taxes ("ASC 740"), a company that is in a cumulative loss position must consider the weight of this significant negative evidence together with the weight of other positive and negative evidence that is available to determine the realizability of deferred tax assets and that overcoming negative evidence such as cumulative losses in recent years is difficult. Due to significant negative evidence and the lack of sufficient positive evidence, the Company has applied a valuation allowance to the majority of its deferred tax assets, leaving a remaining deferred tax asset balance of $0.4 million. 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. At December 31, 2024, 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:
Carryforwards (in millions) |  | Amount |  | Subject to Sections 382, 383 |  | Expires beginning in year |  | Through
Federal net operating loss |  | $ | 32.2 |  |  | Yes |  | 2033 |  | Indefinite
Federal capital loss |  | 13.8 |  |  | No |  | 2026 |  | 2029
Utah net operating loss |  | 0.9 |  |  | No |  | Indefinite |  | Indefinite
California net operating loss |  | 5.0 |  |  | Yes |  | 2029 |  | 2044
Other state net operating loss |  | 6.3 |  |  | Yes |  | Various |  | Various
Foreign net operating losses (various jurisdictions) |  | 4.3 |  |  | No |  | Various |  | Various
Federal research credit |  | 10.5 |  |  | Yes |  | 2027 |  | 2044
Utah research credit |  | 4.9 |  |  | No |  | 2024 |  | 2038
California research credit |  | 5.2 |  |  | No |  | Indefinite |  | Indefinite
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, 2024, the Company had net unrecognized tax benefits of $51.7 million. The Company’s gross unrecognized tax benefits as of the years ended December 31, 2024, 2023, and 2022, and the changes in those balances are as follows:
| Years Ended December 31,
(in millions) | 2024 |  | 2023 |  | 2022
Unrecognized tax benefits at the beginning of period | $ | 48.1 |  |  | $ | 43.9 |  |  | $ | 32.1 |
Gross increases - current year tax positions | 1.0 |  |  | 0.8 |  |  | 12.9 |
Gross increases - prior year tax positions | 2.6 |  |  | 3.6 |  |  | 1.6 |
Gross decreases - prior year tax positions | — |  |  | (0.2) |  |  | (2.0) |
Gross decreases - settlements | — |  |  | — |  |  | (0.7) |
Unrecognized tax benefits at end of year | $ | 51.7 |  |  | $ | 48.1 |  |  | $ | 43.9 |
Interest and penalties in year-end balance | $ | 8.8 |  |  | $ | 6.4 |  |  | $ | 4.1 |
In 2022, the Company filed a U.S. federal tax return taking an uncertain tax position that was not recorded as a benefit or deferred tax asset in the financial statements but for which a $12.0 million unrecognized tax benefit has been included in the table above. The Company believes it is reasonably possible that a decrease of up to $48 million in unrecognized tax benefits may be necessary within the coming year. Interest and penalties related to uncertain tax positions are included as a component of Income tax expense (benefit) and all other interest and penalties are included as a component of Other income (expense) in the Consolidated Statements of Operations. For the years ended December 31, 2024 and December 31, 2023, $32.7 million and $30.2 million of the unrecognized tax benefits, if recognized, would affect the effective tax rate, respectively. 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 through June 30, 2018. 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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