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Income Taxes | 12 Months Ended
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Dec. 31, 2019
Income Tax Disclosure [Abstract] |
Income Taxes | (20) Income Taxes The U.S. Tax Cuts and Jobs Act (“Tax Act”) was enacted in December 2017. The Tax Act significantly changed U.S. tax law by, among other things, lowering the U.S. corporate income tax rate from 35% to 21% effective January 1, 2018, extending the carryforward period for newly generated net operating losses, implementing a territorial tax system, and imposing a one-time transition tax on deemed repatriated earnings of foreign subsidiaries. The SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address the application of GAAP in situations when a registrant did not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Act and allowed the registrant to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. We applied this guidance when accounting for the enactment date effects of the Tax Act in 2017, and at December 31, 2017, we provided for provisional amounts related to the Tax Act, including, re-measurement of deferred tax assets and liabilities, one-time transition tax, and tax on global intangible low-taxed Income Inclusion (“GILTI”). For the report year ending December 31, 2018, we had completed our accounting for all of the enactment date income tax effects of the Tax Act, and we recorded an adjustment of a $1,524 tax benefit, which was offset by an adjustment to our valuation allowance of $1,524 tax expense. The Tax Act provides for a modified territorial tax system with GILTI provisions effective in 2018, which applies an incremental tax on low taxed foreign income. The GILTI provisions require us to include in our U.S. income tax return any foreign subsidiary earnings in excess of an allowable return on the foreign subsidiary’s tangible assets. The components of our income before income taxes are as follows: ໿
﻿ |  | 2019 |  | 2018 |  | 2017
Income (Loss) before income taxes: |  |  |  |  |  |
Domestic |  | $ | (79,821) |  |  | $ | (59,233) |  |  | $ | (75,965) |
Foreign |  | 14,721 |  |  | 16,005 |  |  | 18,444 |
Total |  | $ | (65,100) |  |  | $ | (43,228) |  |  | $ | (57,521) |
The components of income tax provision for the years ended December 31, 2019, 2018 and 2017 are as follows: ໿
﻿ |  | 2019 |  | 2018 |  | 2017
Current: |  |  |  |  |  |
U.S. federal |  | $ | (135) |  |  | $ | (5,882) |  |  | $ | (83) |
State |  | 801 |  |  | 286 |  |  | 741 |
Foreign |  | 7,220 |  |  | 10,621 |  |  | 12,711 |
Total |  | 7,886 |  |  | 5,025 |  |  | 13,369 |
﻿ |  |  |  |  |  |
Deferred: |  |  |  |  |  |
U.S. federal |  | (1,008) |  |  | (322) |  |  | — |
State |  | — |  |  | 3 |  |  | 1,097 |
Foreign |  | (2,346) |  |  | (2,671) |  |  | (6,664) |
Total |  | (3,354) |  |  | (2,990) |  |  | (5,567) |
Total income tax provision |  | $ | 4,532 |  |  | $ | 2,035 |  |  | $ | 7,802 |
The overall effective tax rate differs from the statutory federal tax rate for the years ended December 31, 2019, 2018 and 2017 as follows:
﻿ |  | % of Pretax Loss |  |  |  |
﻿ |  | 2019 |  | 2018 |  | 2017
Tax provision based on the federal statutory rate |  | 21.0 | % |  | 21.0 | % |  | 35.0 | %
Increase in valuation allowances |  | (21.3) |  |  | (34.8) |  |  | 48.8 |
Global intangible low-taxed income inclusion |  | (7.0) |  |  | (6.6) |  |  | — |
One-Time transition tax |  | — |  |  | (2.8) |  |  | (16.5) |
Nondeductible expenses |  | (1.8) |  |  | (2.3) |  |  | (3.3) |
Taxes related to distributions |  | (0.8) |  |  | (2.3) |  |  | — |
Foreign income tax rate differential |  | 1.0 |  |  | (1.5) |  |  | — |
Deemed income related to foreign operations |  | (0.5) |  |  | (1.5) |  |  | (4.1) |
Tax rate change |  | (1.1) |  |  | (1.4) |  |  | 2.2 |
Employee share-based payments |  | — |  |  | 0.1 |  |  | (13.2) |
Other |  | (0.9) |  |  | 0.6 |  |  | 2.9 |
Deferred and payable adjustments |  | 3.3 |  |  | 0.9 |  |  | (1.1) |
ASU 842 Adoption |  | (0.1) |  |  | — |  |  | — |
State taxes, net of federal benefit, before valuation allowance |  | 2.8 |  |  | 2.4 |  |  | 1.0 |
Return to provision adjustments |  | (2.5) |  |  | 2.7 |  |  | 2.0 |
Other tax credits |  | (1.9) |  |  | 5.1 |  |  | — |
U.S. Tax Cuts and Jobs Act - rate change adjustment |  | — |  |  | 6.4 |  |  | (65.9) |
Uncertain tax positions and audit settlements |  | 2.8 |  |  | 9.4 |  |  | (1.4) |
Effective tax rate |  | (7.0) | % |  | (4.6) | % |  | (13.6) | %
The difference between our effective tax rate for 2019 and the federal statutory rate was 28.0 percentage points. The difference in the effective rate is primarily due to valuation allowance changes, provisions for GILTI, prior period adjustments, and adjustments to uncertain tax positions. The difference between our effective tax rate for 2018 and the federal statutory rate was 25.6 percentage points. The difference in the effective rate is primarily due to the impact of the Tax Act, including adjustments related to the Tax Act, the new provisions for GILTI, tax credits, adjustments to uncertain tax positions related to statute of limitations expiration and change in valuation allowances. The difference between our effective tax rate for 2017 and the federal statutory rate was 48.6 percentage points. The difference in the effective rate is due primarily to the impact of the Tax Act, change in valuation allowances that were recorded during the year, as well as our foreign income inclusions and employee share-based payments that were previously recognized through other comprehensive income. In 2019 and 2018, there were no significant changes to our valuation allowance assertions. We continue to review results of operations and forecast estimates to determine if it is more likely than not that the deferred tax assets will be realized. During the third quarter of 2017, we determined that it is more likely than not that the deferred tax assets related to Phenix Systems would not be realized based on our review of results from operations and other evidence. During the fourth quarter of 2017, it was determined that it was more likely than not that Layerwise, located in Belgium, would realize benefits based on results from operations and utilization of existing net operating losses. There were no other changes to our valuation allowance assertions. The components of our net deferred income tax assets and net deferred income tax (liabilities) at December 31, 2019 and 2018 are as follows: ໿
(in thousands) |  | 2019 |  | 2018
Deferred income tax assets: |  |  |  |
Intangibles |  | $ | 20,624 |  |  | $ | 22,530 |
Stock options and restricted stock awards |  | 6,065 |  |  | 5,916 |
Reserves and allowances |  | 11,959 |  |  | 15,656 |
Net operating loss carryforwards |  | 57,782 |  |  | 41,356 |
Tax credit carryforwards |  | 12,749 |  |  | 13,669 |
Accrued liabilities |  | 3,218 |  |  | 3,040 |
Deferred revenue |  | 3,940 |  |  | 5,036 |
Lease Tax Asset |  | 5,970 |  |  | — |
163(j) Limitation Carryforward |  | 1,519 |  |  | — |
Valuation allowance |  | (109,643) |  |  | (95,398) |
Total deferred income tax assets |  | 14,183 |  |  | 11,805 |
﻿ |  |  |  |
Deferred income tax liabilities: |  |  |  |
Intangibles |  | 4,495 |  |  | 6,994 |
Property, plant and equipment |  | 3,282 |  |  | 5,265 |
Lease Tax Liability |  | 4,195 |  |  | — |
Liabilities related to distributions |  | — |  |  | 997 |
Other |  | 830 |  |  | 522 |
Total deferred income tax liabilities |  | 12,802 |  |  | 13,778 |
﻿ |  |  |  |
Net deferred income tax assets/( liabilities) |  | $ | 1,381 |  |  | $ | (1,973) |
At December 31, 2019, $57,782 of our deferred income tax assets was attributable to $369,516 of gross net operating loss carryforwards, which consisted of $194,962 of loss carryforwards for U.S. federal income tax purposes, $139,691 of loss carryforwards for U.S. state income tax purposes and $36,894 of loss carryforwards for foreign income tax purposes. The net operating loss carryforwards for U.S. federal income tax purposes begin to expire in 2035. The net operating loss carryforwards for U.S. state income tax purposes began to expire in 2018. In addition, certain loss carryforwards for foreign income tax purposes begin to expire in 2020 and certain other loss carryforwards for foreign purposes do not expire. At December 31, 2019, tax credit carryforwards included in our deferred income tax assets consisted of $2,934 of research and experimentation credit carryforwards for U.S. federal income tax purposes, $4,037 of research and experimentation tax credit carryforwards for U.S. state income tax purposes, $4,026 of foreign tax credits for U.S. federal income tax purposes, $1,021 of research and experimentation tax credit carryforwards for foreign income tax purposes and $729 of other state tax credits. Certain state research and experimentation and other state credits begin to expire in 2021. We have recorded a valuation allowance related to the U.S. federal and state tax credits. Due to the one time transition tax, our previously unremitted earnings have now been subjected to U.S. federal income tax, although, other additional taxes such as, withholding tax, could be applicable. We intend to permanently reinvest its earnings outside the U.S. and as such, it has not provided for any additional taxes on approximately $181,002 of unremitted earnings. We believe the unrecognized deferred tax liability related to these earnings is approximately $21,210. Including interest and penalties, we decreased our unrecognized benefits by $857 for the year ended December 31, 2019 and increased our unrecognized tax benefits by $3,293 for the year ended December 31, 2019. The decrease was primarily related to the release of unrecognized tax benefits due to the expiration of statute of limitations and effective settlement of an audit. We do not anticipate any additional unrecognized tax benefits during the next 12 months that would result in a material change to its consolidated financial position. The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate is $4,920.We include interest and penalties in the consolidated financial statements as a component of income tax expense.
﻿ |  | Unrecognized Tax Benefits* |  |  |  |
(in thousands) |  | 2019 |  | 2018 |  | 2017
Balance at January 1 |  | $ | (13,031) |  |  | $ | (18,310) |  |  | $ | (18,251) |
Increases related to prior year tax positions |  | (2,684) |  |  | (1,400) |  |  | (4,104) |
Decreases related to prior year tax positions |  | 857 |  |  | 8,272 |  |  | 4,045 |
Increases related to current year tax positions |  | (609) |  |  | (1,593) |  |  | — |
Balance at December 31 |  | $ | (15,467) |  |  | $ | (13,031) |  |  | $ | (18,310) |
*The unrecognized tax benefit balance includes an insignificant amount of interest and penalties. Tax years 2013 and 2014 remain subject to examination by the U.S. Internal Revenue Service (“IRS”) for certain credit carryforwards, while tax years 2016 through 2018 remain open to examination by the IRS. State income tax returns are generally subject to examination for a period of three to four years after filing the respective tax returns. We file income tax returns (which are open to examination beginning in the year shown in parentheses) in Australia (2015), Belgium (2016), Brazil (2014), China (2016), France (2016), Germany (2015), India (2014), Israel (2015), Italy (2014), Japan (2014), Korea (2014), Mexico (2014), Netherlands (2014), Switzerland (2014), the United Kingdom (2018) and Uruguay (2014). The following presents the changes in the balance of our deferred income tax asset valuation allowance:
Year Ended |  | Item |  | Balance at beginning of year |  | Additions (reductions) charged to expense |  | Other |  | Balance at end of year
2019 |  | Deferred income tax asset valuation allowance |  | $ | 95,398 |  |  | $ | 14,245 |  |  | $ | — |  |  | $ | 109,643 |
2018 |  | Deferred income tax asset valuation allowance |  | 80,796 |  |  | 14,602 |  |  | — |  |  | 95,398 |
2017 |  | Deferred income tax asset valuation allowance |  | 109,913 |  |  | (28,071) |  |  | (1,046) |  |  | 80,796 |

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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