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Income Taxes (Tables)
12 Months Ended
Dec. 31, 2020
Income Tax Disclosure [Abstract]  
Components of Income Tax Expense

Income tax expense is comprised of the following:

 

 

 

Year Ended December 31,

 

(In thousands)

 

2020

 

 

2019

 

 

2018

 

Current taxes:

 

 

 

 

 

 

 

 

 

 

 

 

Federal

 

$

526

 

 

$

3,051

 

 

$

29

 

State

 

 

881

 

 

 

830

 

 

 

1,857

 

Deferred taxes:

 

 

 

 

 

 

 

 

 

 

 

 

Federal

 

 

14,114

 

 

 

11,853

 

 

 

20,136

 

State

 

 

2,009

 

 

 

4,559

 

 

 

5,024

 

Total

 

$

17,530

 

 

$

20,293

 

 

$

27,046

 

Significant Components of Net Deferred Tax Asset and Liability The following table sets forth the significant components of our net deferred tax asset and liability as of December 31, 2020 and 2019:

 

(In thousands)

 

December 31,

2020

 

 

December 31,

2019

 

Deferred tax asset:

 

 

 

 

 

 

 

 

Accruals and reserves

 

$

1,137

 

 

$

498

 

Deferred compensation

 

 

604

 

 

 

191

 

Share-based payments

 

 

2,909

 

 

 

2,802

 

Lease liability

 

 

4,993

 

 

 

5,003

 

Section 163(j) interest limitation

 

 

370

 

 

 

5,647

 

Interest rate swap

 

 

5,964

 

 

 

4,147

 

Unrealized losses

 

 

3,720

 

 

 

 

Net operating loss carryforwards

 

 

10,608

 

 

 

7,200

 

Capital loss carryforwards

 

 

149,608

 

 

 

7,801

 

 

 

 

179,913

 

 

 

33,289

 

Valuation allowance

 

 

(152,295

)

 

 

(13,147

)

 

 

$

27,618

 

 

$

20,142

 

Deferred tax liability:

 

 

 

 

 

 

 

 

Property and equipment

 

$

(4,516

)

 

$

(3,181

)

Intangible assets

 

 

(14,868

)

 

 

(14,651

)

Right-of-use assets

 

 

(4,633

)

 

 

(6,532

)

 

 

 

(24,017

)

 

 

(24,364

)

Net long-term deferred tax asset (liability)

 

$

3,601

 

 

$

(4,222

)

 

Difference between Income Tax Expense Computed using Statutory Federal Income Tax Rate and effective rate

The difference between income tax expense computed using the statutory federal income tax rate and the effective rate is as follows:

 

 

 

Year Ended December 31,

 

(In thousands)

 

2020

 

 

2019

 

 

2018

 

Statutory federal income tax

 

$

15,624

 

 

$

13,757

 

 

$

26,239

 

State income taxes, less federal income tax benefit

 

 

3,607

 

 

 

3,048

 

 

 

6,261

 

Permanent items

 

 

1,131

 

 

 

306

 

 

 

1,496

 

Change in valuation allowance

 

 

(2,659

)

 

 

2,509

 

 

 

(1,005

)

Share-based compensation

 

 

426

 

 

 

210

 

 

 

(6,378

)

State income tax credits

 

 

 

 

 

954

 

 

 

677

 

Change in uncertain tax position liability

 

 

 

 

 

 

 

 

(644

)

Prior year tax adjustments

 

 

(592

)

 

 

(464

)

 

 

(590

)

Net impact of foreign operations

 

 

3

 

 

 

(9

)

 

 

990

 

Other

 

 

(10

)

 

 

(18

)

 

 

 

Income tax expense

 

$

17,530

 

 

$

20,293

 

 

$

27,046

 

Changes in Unrecognized Tax Benefits

The aggregate changes in the balance of unrecognized tax benefits, exclusive of interest, were as follows:

 

(In thousands)

 

 

 

 

Unrecognized tax benefits at December 31, 2018

 

$

 

Increases related to acquisition of Nutrisystem

 

 

1,006

 

Increases related to current year tax positions

 

 

8

 

Increases related to prior year tax positions

 

 

66

 

Decreases due to lapse of statute of limitations

 

 

(19

)

Unrecognized tax benefits at December 31, 2019

 

$

1,061

 

Increases related to prior year tax positions

 

 

84

 

Decreases due to lapse of statute of limitations

 

 

(20

)

Decreases related to Nutrisystem divestiture

 

 

(1,125

)

Unrecognized tax benefits at December 31, 2020

 

$