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Income Taxes | 12 Months Ended
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Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The components of income or (loss) from continuing operations before income taxes are as follows:
| Year Ended December 31,
| 2020 |  | 2019 |  | 2018
Domestic | $ | (43,457) |  |  | $ | (104,445) |  |  | $ | (216,589) |
Foreign | 5,991 |  |  | 3,152 |  |  | (46,585) |
Total | $ | (37,466) |  |  | $ | (101,293) |  |  | $ | (263,174) |
The components of income tax (expense) benefit from continuing operations are as follows:
| Year Ended December 31,
| 2020 |  | 2019 |  | 2018
Current: |  |  |  |  |
Federal | $ | 30,365 |  |  | $ | (208) |  |  | $ | 3,163 |
State | 56 |  |  | 46 |  |  | 116 |
Foreign | (3,643) |  |  | (2,048) |  |  | (2,612) |
Deferred: |  |  |  |  |
Federal | 262 |  |  | (28) |  |  | 6,729 |
State | (229) |  |  | (17) |  |  | 2,214 |
Foreign | 297 |  |  | 81 |  |  | 8,284 |
Income tax benefit (provision) | $ | 27,108 |  |  | $ | (2,174) |  |  | $ | 17,894 |
The Company recognized approximately $27.1 million in related income tax benefit and $2.2 million in related income tax provision during the year ended December 31, 2020 and 2019, respectively. The effective tax rate was approximately 72.4% for the year ended December 31, 2020, which was higher than the U.S. federal statutory rate primarily due to the benefit of the CARES Act provision allowing for a 5 year carryback of Net Operating Losses arising in 2018, 2019 and 2020. The Company’s effective tax rate was approximately (2.1)% for the year ended December 31, 2019, which was lower than the U.S. federal statutory rate primarily due to pre-tax losses in jurisdictions where full valuation allowances have been recorded and in zero tax rate jurisdictions and permanent differences associated with U.S. Base Erosion and Anti Abuse Tax elections, offset by certain foreign jurisdictions projecting current income tax expense. Reconciliations of the statutory tax rates and the effective tax rates from continuing operations for the years ended December 31, 2020, 2019 and 2018 are as follows:
| Year Ended December 31,
| 2020 |  | 2019 |  | 2018
Statutory rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State taxes, net of federal benefit | (0.5) | % |  | (0.8) | % |  | 3.0 | %
Effect of rates different than statutory | (2.1) | % |  | (4.3) | % |  | (2.0) | %
Minority interest | 0.2 | % |  | 0.2 | % |  | (1.0) | %
Non-deductible Bad Debt | (2.9) | % |  | — | % |  | — | %
Stock based compensation | (6.1) | % |  | (2.5) | % |  | (2.0) | %
Foreign Basis Differences | 9.8 | % |  | — | % |  | — | %
Other permanent differences | (0.9) | % |  | (0.3) | % |  | — | %
Research and development credit | 6.5 | % |  | 0.5 | % |  | — | %
Change in valuation allowance | (3.2) | % |  | 6.7 | % |  | (17.0) | %
Uncertain tax positions | (0.7) | % |  | 0.6 | % |  | 1.0 | %
Other | 1.1 | % |  | (1.2) | % |  | 1.0 | %
Acquisitions and foreign tax residency changes | — | % |  | — | % |  | 3.0 | %
Investment in JV | — | % |  | (1.7) | % |  | — | %
Global Intangible Low-Taxed Income | 3.9 | % |  | (3.3) | % |  | — | %
Base Erosion Anti-Abuse Tax and Related Elections | 0.9 | % |  | (17.0) | % |  | — | %
NOL Carryback and Other Refund Claims | 45.4 | % |  | — | % |  | — | %
Effective tax rate | 72.4 | % |  | (2.1) | % |  | 7.0 | %
Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows:
| As of December 31,
| 2020 |  | 2019
Deferred tax assets: |  |  |
Accrued liabilities | $ | 1,660 |  |  | $ | 78 |
Deferred revenue | 5,410 |  |  | 12,943 |
Bad debts reserve | 2,248 |  |  | 9,291 |
Deferred compensation | 6,816 |  |  | 5,262 |
Federal net operating loss carryforwards | 8,876 |  |  | 7,969 |
State net operating loss carryforwards | 7,415 |  |  | 4,236 |
Foreign net operating loss carryforwards | 10,036 |  |  | 9,401 |
Lease obligations | 10,142 |  |  | 13,791 |
Capital loss carryforward | 10,365 |  |  | 1,563 |
Intangible assets | 6,153 |  |  | 2,716 |
Basis difference | 6,256 |  |  | 8,041 |
Installment sale | — |  |  | 8,726 |
Credits | 9,720 |  |  | — |
Fixed assets | 1,249 |  |  | — |
Other | 26 |  |  | 3,208 |
Total deferred tax assets | $ | 86,372 |  |  | $ | 87,225 |
Deferred tax liabilities: |  |  |
Basis difference | $ | (1,555) |  |  | $ | — |
Depreciation and amortization | (5,171) |  |  | (5,965) |
Lease Assets | (6,121) |  |  | (9,593) |
Other | (439) |  |  | — |
Total deferred tax liabilities | (13,286) |  |  | (15,558) |
Less: valuation allowance | (74,961) |  |  | (73,346) |
Net deferred income tax (liabilities) assets | $ | (1,875) |  |  | $ | (1,679) |
As of December 31, 2020, the Company has federal and state income tax net operating loss (“NOL”) carryforwards of $42.3 million and $116.3 million, respectively, including NOL carryforwards which will expire at various dates from 2023 through 2039, and NOL carryforwards which do not expire. The Company also has foreign NOL carryforwards in various jurisdictions of $112.3 million that have various carryforward periods. Such NOL carryforwards expire as follows:
| NOL carryforward
2021 | $ | 2,040 |
2022 | $ | 2,222 |
2023 - 2038 | 159,194 |
Indefinite | 107,474 |
Total | $ | 270,930 |
In evaluating the Company’s ability to recover its deferred tax assets within the jurisdiction from which they arise, the Company considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax-planning strategies, and results of recent operations. In projecting future taxable income, the Company begins with historical results and incorporates assumptions including the amount of future state, federal and foreign pretax operating income, the reversal of temporary differences, and the implementation of feasible and prudent tax- planning strategies. These assumptions require significant judgment about the forecasts of future taxable income and are consistent with the plans and estimates the Company is using to manage the underlying businesses. The foreign NOL carryforwards in the income tax returns filed included unrecognized tax benefits taken in prior years. The NOLs for which a deferred tax asset is recognized for financial statement purposes in accordance with ASC 740 are presented net of these unrecognized tax benefits. The Company continues to evaluate the ability to realize all of its net deferred tax assets at each reporting date and records a benefit for deferred tax assets to the extent it has deferred tax liabilities that provide a source of income to benefit the deferred tax asset. As a result of this analysis, the Company recorded a valuation allowance against the net deferred tax assets of certain foreign jurisdictions as the realization of these assets is not more likely than not, given uncertainty of future earnings in these jurisdictions. The valuation allowance increased by $1.6 million and decreased by $7.7 million during the years ended December 31, 2020 and December 31, 2019, respectively. The increase in tax year ended December 31, 2020 is primarily related to NOL and tax credits generated during the period and a decrease in deferred tax liabilities, partially offset by decreases in other deferred tax assets due to current year activity. The decrease in tax year ended December 31, 2019 is primarily related to utilization of NOL carryforwards. The Company is subject to taxation in the United States and various states and foreign jurisdictions. As of December 31, 2020, the Company’s tax years for 2017 through 2020 are subject to examination by the tax authorities. With few exceptions, as of December 31, 2020, the Company is no longer subject to U.S. federal, state, local, or foreign examinations by tax authorities for years before 2016. Due to the amended returns filed to carryback NOLs under the CARES Act, U.S. federal tax returns for years 2013 – 2016 remain subject to future examination by the tax authorities. Additionally, to the extent we utilize our NOL carryforwards in the future, the tax years in which the attribute was generated may still be adjusted upon examination by the tax authorities in the future period when the attribute is utilized. The Company is currently under income tax examinations in Illinois for the tax years 2014 through 2015, Colorado for tax years 2014 through 2017, and Massachusetts for the tax years 2015 through 2017. The Company does not believe that the results of this audit will have a material effect on its financial position or results of operations. In 2017, the TCJA included a transition tax based on undistributed, untaxed foreign earnings analyzed in aggregate. The final analysis performed by the Company resulted in an overall untaxed deficit and no transition tax. In addition, no income taxes have been provided for any remaining undistributed foreign earnings not subject to the transition tax, or any additional outside basis difference inherent in these entities, as these amounts continue to be indefinitely reinvested in foreign operations. Should the Company decide to repatriate the foreign earnings, it would need to adjust its income tax provision in the period it determined that the earnings will no longer be indefinitely invested outside the United States. Due to the timing and circumstances of repatriation of such earnings, if any, it is not practicable to determine the unrecognized deferred tax liability relating to such amounts. In March 2020, in response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was signed into law. The CARES Act provides numerous tax provisions and other stimulus measures, including temporary changes regarding the prior and future utilization of net operating losses. The CARES Act amends the Net Operating Loss provisions of the Tax Cuts and Jobs Act, allowing for the carryback of losses arising in tax years 2018, 2019 and 2020, to each of the five taxable years preceding the taxable year of loss. A reconciliation of the amounts of unrecognized tax benefits excluding interest, are as follows:
Unrecognized tax benefit at December 31, 2017 | $ | 6,475 |
Decrease for tax positions taken during prior year | (567) |
Increases related to acquired entities | — |
Reduction due to lapse of applicable statute of limitations | (2,657) |
Decreases related to divested entities | — |
Increases for tax positions of current period | 721 |
Unrecognized tax benefit at December 31, 2018 | 3,972 |
Increase for tax positions taken during prior year | — |
Increases related to acquired entities | — |
Increases and (decreases) related to Lapse of Statute of Limitations | (703) |
Decreases related to divested entities | — |
Increases for tax positions of current period | — |
Unrecognized tax benefit at December 31, 2019 | 3,269 |
Increase for tax positions taken during prior year | — |
Increases related to acquired entities | — |
Increases and (decreases) related to Lapse of Statute of Limitations | (262) |
Decreases related to divested entities | — |
Increases (decreases) for tax positions of current period | 276 |
Unrecognized tax benefit at December 31, 2020 | $ | 3,283 |
Included in the balance of unrecognized tax benefits as of the years ended December 31, 2020 and 2019, are $2.7 million and $2.8 million, respectively, of tax benefits that, if recognized, would affect the effective tax rate. The Company recognizes interest and penalties, if any, related to unrecognized tax benefits in interest expense. The liability for unrecognized tax benefits excludes accrued interest of $0.3 million, $0.3 million and $0.4 million, for the years ended December 31, 2020, 2019 and 2018, respectively. The Company believes that it is reasonably possible that approximately $1.1 million of its currently unrecognized tax benefits primarily related to research and development credits, which are individually insignificant, may be recognized by the end of 2021 as a result of a lapse of the statute of limitations.

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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=84230637&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=116825942&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=84230637&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=116825942&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=84230637&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 + Details
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