Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Loss Before Income Tax Provision (Benefit)

The Company’s income before income tax provision was subject to taxes in the following jurisdictions for the following periods (in thousands):


	Years Ended December 31,
	2020		2019		2018
United States	$	68,916	$	55,352	$	100,031
Foreign	(196,394)		40,417		31,241
	$	(127,478)	$	95,769	$	131,272

Expense Benefit for Income Taxes

The expense (benefit) for income taxes is comprised of (in thousands):


	Years Ended December 31,
	2020		2019		2018
Current tax provision:
Federal	$	1,665	$	1,022	$	736
State	1,467		1,403		1,880
Foreign	5,385		9,933		6,577
	8,517		12,358		9,193
Deferred tax (benefit) expense:
Federal	8,579		10,185		14,844
State	5,166		335		1,086
Foreign	(22,806)		(6,338)		895
	(9,061)		4,182		16,825
Income tax (benefit) provision	$	(544)	$	16,540	$	26,018

Components of Deferred Tax Assets and Liabilities

Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2020 and 2019 are as follows (in thousands):


	December 31,
	2020		2019
Deferred tax assets:
Reserves and allowances not currently deductible for tax purposes	$	26,026	$	22,926
Basis difference related to fixed assets	6,294		8,381
Compensation and benefits	4,968		7,580
Basis difference for inventory valuation	927		849
Compensatory stock options and rights	2,586		3,404

Operating loss carryforwards	19,889		9,080
Tax credit carryforwards	49,525		55,001
ASC 842 lease liability	52,785		44,768
Interest expense carryforward	7,030		5,057
Basis difference related to intangible assets with a definite life	4,370		354
Other	7,992		2,790
Total deferred tax assets	182,392		160,190
Valuation allowance for deferred tax assets	(21,032)		(14,469)
Deferred tax assets, net of valuation allowance	$	161,360	$	145,721
Deferred tax liabilities:
Prepaid expenses	(1,323)		(1,685)
Convertible debt	(8,958)		—
Basis difference related to intangible assets with an indefinite life	(100,062)		(99,712)
ASC 842 right-of-use assets	(49,910)		(43,859)
Total deferred tax liabilities	(160,253)		(145,256)
Net deferred tax assets	$	1,107	$	465
Net deferred tax assets (liabilities) are shown on the accompanying consolidated balance sheets as follows:
Non-current deferred tax assets	$	59,735	$	73,948

Non-current deferred tax liabilities	(58,628)		(73,483)
Net deferred tax assets	$	1,107	$	465

Credit Carryforward Expiry

At December 31, 2020, the Company had federal and state income tax credit carryforwards of $41,020,000 and $22,585,000, respectively, which will expire if unused at various dates beginning on December 31, 2027. Such credit carryforwards expire as follows (in thousands):


U.S. foreign tax credit	$	18,627	2027 - 2029
U.S. research tax credit	$	22,368	2031 - 2040
U.S. business tax credits	$	26	2031 - 2039
State investment tax credits	$	1,650	Do not expire
State research tax credits	$	20,935	Do not expire

Net Operating Losses Expiry

The Company has recorded a deferred tax asset reflecting the benefit of operating loss carryforwards. The net operating losses expire as follows (in thousands):


U.S. loss carryforwards	$	—	N/A
State loss carryforwards	$	95,552	2032 - 2038

Reconciliation of Effective Tax Rate on Income or Loss and Statutory Tax Rate

A reconciliation of the effective tax rate on income or loss and the statutory tax rate is as follows:


	Years Ended December 31,
	2020		2019		2018
Statutory U.S. tax rate	21.0	%	21.0	%	21.0	%
State income taxes, net of U.S. tax benefit	(4.1)	%	1.6	%	1.8	%
Foreign income taxed at other than U.S. statutory rate	7.0	%	(5.0)	%	1.1	%
Federal tax credits	2.8	%	(3.5)	%	(4.4)	%
Goodwill impairment	(24.5)	%	—	%	—	%
Other non-deductible expenses	(1.7)	%	1.2	%	0.7	%
Non-deductible compensation	(0.7)	%	1.5	%	0.8	%
Stock option compensation excess tax benefits	1.4	%	(1.5)	%	(1.0)	%
Intra-entity asset transfers	—	%	—	%	0.8	%
U.S. foreign tax inclusions	(0.4)	%	0.1	%	1.1	%
Foreign derived intangible income deduction	1.1	%	(3.2)	%	(2.7)	%
Impact of uncertain tax positions	(1.6)	%	3.7	%	0.8	%
Enactment of the Tax Cuts and Jobs Act	—	%	—	%	0.3	%
Change in deferred tax valuation allowance	(0.7)	%	0.2	%	—	%
Other	0.8	%	1.2	%	(0.5)	%
Effective tax rate	0.4	%	17.3	%	19.8	%

Reconciliation of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):


	2020		2019		2018
Balance at January 1	$	25,993	$	11,832	$	9,300
Additions based on tax positions related to the current year	3,119		3,224		1,354
Additions for tax positions of prior years	474		593		1,624
Reductions for tax positions of prior years	(186)		(174)		(148)
Settlement of tax audits	—		(7)		—
Current year acquisitions	—		11,006		—
Reductions due to lapsed statute of limitations	(1,098)		(481)		(298)
Balance at December 31	$	28,302	$	25,993	$	11,832

Major Jurisdictions No Longer Subject to Income Tax Examinations by Tax Authorities

The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction and various states and foreign jurisdictions. The Company is generally no longer subject to income tax examinations by tax authorities in its major jurisdictions as follows:


Major Tax Jurisdiction			Years No Longer Subject to Audit
U.S. federal			2010 and prior
California (U.S.)			2008 and prior
Germany			2013 and prior
Japan			2013 and prior
South Korea			2014 and prior
United Kingdom			2016 and prior