Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Components of Income Tax Benefit (Provision)

The benefit (provision) for incomes taxes consists of the following:


	For the years ended December 31,
(In thousands)	2022		2021		2020
Current
Federal	$	—	$	—	$	(234)
State	(394)		(2,536)		351
Foreign	(10,512)		(2,794)		(2,094)
	(10,906)		(5,330)		(1,977)
Deferred
Federal	40,750		(10,901)		(254)
State	12,078		1,280		933
Foreign	21,577		(538)		(16,319)
	74,405		(10,159)		(15,640)
Total, net	$	63,499	$	(15,489)	$	(17,617)

Components of Deferred Income Tax Assets and Liabilities

Deferred income tax assets and liabilities as of December 31, 2022 and 2021 are comprised of the following:


(In thousands)	December 31, 2022		December 31, 2021
Deferred income tax assets:
Federal net operating loss	$	68,022	$	76,646
State net operating loss	55,134		56,583
Foreign net operating loss	16,947		17,106
Research and development expense	14,349		290
Tax credits	22,488		22,938
Stock options	33,558		30,324
Accruals	2,724		10,692
Equity investments	20,968		15,735
Bad debts	265		265
Lease liability	1,842		1,091
Foreign credits	9,629		9,829
Available-for-sale securities	2,649		2,582
Operating lease asset	10,919		14,554

Other	5,263		6,493
Deferred income tax assets	264,757		265,128
Deferred income tax liabilities:
Intangible assets	(94,856)		(80,230)
Convertible debt	—		(6,286)
Operating lease liability	(10,675)		(14,554)
Investment in subsidiaries	—		(42,140)
Fixed assets	(180)		(2,592)
Other	(3,097)		(1,638)
Deferred income tax liabilities	(108,808)		(147,440)
Net deferred income tax assets (liabilities)	155,949		117,688
Valuation allowance	(279,212)		(260,397)
Net deferred income tax liabilities	$	(123,263)	$	(142,709)

Note: Net deferred income tax liability balances at December 31, 2022 and 2021 include $3.2 million and $5.8 million, respectively, recorded to Other assets on the Consolidated Balance Sheets.

Change in Gross Unrecognized Income

The following summarizes the changes in our gross unrecognized income tax benefits.


	For the years ended December 31,
(In thousands)	2022		2021
Unrecognized tax benefits at beginning of period	$	11,497	$	13,954

Gross increases – tax positions in current period	3,713		166
Gross decreases – tax positions in prior period	(271)		(575)
Gross decreases – settlements with taxing authorities	—		(1,952)
Lapse of Statute of Limitations	(96)		(96)

Unrecognized tax benefits at end of period	$	14,843	$	11,497

Schedule of Difference in Federal and Effective Tax Rate

The significant elements contributing to the difference between the federal statutory tax rate and the effective tax rate are as follows:


	For the years ended December 31,
	2022		2021		2020
Federal statutory rate	21.0	%	21.0	%	21.0	%
State income taxes, net of federal benefit	4.0	%	(7.9)	%	17.4	%
Foreign income tax	(2.0)	%	21.6	%	53.7	%
Income Tax Refunds	—	%	6.1	%	(0.6)	%
Research and development tax credits	0.2	%	2.3	%	(1.0)	%
GeneDx Disposition	0.8	%	—	%	—	%
Valuation allowance	(6.3)	%	235.4	%	227.7	%
Rate change effect	5.2	%	(40.5)	%	11.4	%
Non-deductible items	0.6	%	(67.0)	%	5.2	%
Unrecognized tax benefits	(0.7)	%	11.3	%	(5.0)	%
GILTI	(4.9)	%	—	%	—	%
IPR&D benefit	—	%	—	%	(309.6)	%
Stock options excess tax benefit	(0.3)	%	(3.8)	%	10.6	%
Imputed interest	(0.4)	%	(6.3)	%	2.5	%
Investment in subsidiaries	—	%	(287.6)	%	—	%

Other	(1.0)	%	9.7	%	3.2	%
Total	16.2	%	(105.7)	%	36.5	%

Reconciliation Losses Before Tax, US and Foreign Jurisdictions

The following table reconciles our income (loss) before income taxes between U.S. and foreign jurisdictions:


	For the years ended December 31,
(In thousands)	2022		2021		2020
Pre-tax income (loss):
U.S.	$	(389,439)	$	(2,965)	$	81,734
Foreign	(2,465)		(11,689)		(33,531)
Total	$	(391,904)	$	(14,654)	$	48,203