Income Taxes (Tables)
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12 Months Ended |
Dec. 31, 2019 |
Income Tax Disclosure [Abstract] |
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Schedule of loss before provision for income taxes |
Our loss before provision for income taxes was as follows (in thousands): | | | | | | | | | | | | | | For the Years Ended December 31, | | 2019 | | 2018 | | 2017 | Domestic | $ | (328,161 | ) | | $ | (54,681 | ) | | $ | (76,404 | ) | Foreign | 1,045 |
| | 530 |
| | — |
| Loss before income taxes and non-controlling interests | $ | (327,116 | ) | | $ | (54,151 | ) | | $ | (76,404 | ) |
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Components of income tax expense (benefit) |
Components of income tax expense (benefit) (in thousands) consist of the following: | | | | | | | | | | | | | | For the Years Ended December 31, | | 2019 | | 2018 | | 2017 | Current | | | | | | Federal | $ | 1,175 |
| | $ | 458 |
| | $ | 368 |
| State and local | 14 |
| | 9 |
| | 266 |
| Foreign | 399 |
| | 251 |
| | — |
| Total current tax expense | 1,588 |
| | 718 |
| | 634 |
| Deferred | | | | | | Federal | (27,334 | ) | | (14,820 | ) | | 3,202 |
| State and local | (5,046 | ) | | (2,252 | ) | | (3,102 | ) | Foreign | 6 |
| | (49 | ) | | — |
| Total deferred tax expense | (32,374 | ) | | (17,121 | ) | | 100 |
| Change in valuation allowance | 9,250 |
| | 16,443 |
| | (7,371 | ) | Total tax expense (benefit) | $ | (21,536 | ) | | $ | 40 |
| | $ | (6,637 | ) |
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Schedule of reconciliation of the U.S. statutory tax rate to our effective tax rate |
A reconciliation of the U.S. statutory tax rate to our effective tax rate and our statutory rate is presented below: | | | | | | | | | | | For the Years Ended December 31, | | 2019 | | 2018 | | 2017 | U.S. statutory tax rate | 21.0 | % | | 21.0 | % | | 35.0 | % | U.S. state income taxes, net of U.S. federal tax benefit | 4.4 | % | | 3.6 | % | | 3.3 | % | Foreign earnings at other than U.S. rates | (0.1 | )% | | (0.2 | )% | | — | % | Change in valuation allowance | (2.8 | )% | | (30.4 | )% | | (34.0 | )% | Change in valuation allowance, tax reform | — | % | | — | % | | 43.7 | % | Impact of tax reform | — | % | | — | % | | (36.0 | )% | Non-deductible goodwill impairment | (15.8 | )% | | — | % | | — | % | Non-controlling interest | (0.3 | )% | | (0.7 | )% | | (4.6 | )% | Excess tax benefits on stock-based compensation | (0.2 | )% | | 3.9 | % | | 3.1 | % | Federal and state research tax credits | — | % | | 4.5 | % | | — | % | Change in uncertain tax positions | 0.1 | % | | (1.1 | )% | | — | % | Effect of investment in MHG | (1.4 | )% | | — | % | | — | % | Change in indefinite reinvestment assertion for domestic subsidiaries | 2.6 | % | | — | % | | — | % | Other, net | (0.8 | )% | | (0.7 | )% | | (1.8 | )% | Effective rate | 6.7 | % | | (0.1 | )% | | 8.7 | % |
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Schedule of deferred tax assets and liabilities |
Significant components of the Company’s deferred tax assets and liabilities (in thousands) were as follows:
| | | | | | | | | | As of December 31, | | 2019 | | 2018 | Deferred Tax Assets | | | | Start-up and organizational costs | $ | 149 |
| | $ | 160 |
| Internally developed software costs | — |
| | 3,283 |
| Goodwill | 19,142 |
| | — |
| Operating lease liabilities | 18,055 |
| | — |
| Accrued expenses | 9,534 |
| | — |
| Stock based compensation | 8,899 |
| | — |
| Net operating loss carryforwards | 112,316 |
| | 76,019 |
| Federal and state research tax credits | 1,828 |
| | 1,828 |
| Other | 3,941 |
| | 861 |
| Subtotal | 173,864 |
| | 82,151 |
| Valuation allowance | (50,815 | ) | | (37,037 | ) | Total deferred tax assets | 123,049 |
| | 45,114 |
| | | | | Deferred Tax Liabilities | | | | Internally developed software costs | 14,603 |
| | — |
| Intangible assets | 58,655 |
| | 26,710 |
| Outside basis differences | 5,865 |
| | 43,492 |
| Right-of-use assets - Operating | 16,180 |
| | — |
| Contract fulfillment costs | 9,510 |
| | — |
| Convertible debt | 15,732 |
| | — |
| Fixed assets | 796 |
| | — |
| Other | 3,650 |
| | — |
| Total deferred tax liabilities | 124,991 |
| | 70,202 |
| Net deferred tax assets (liabilities) | $ | (1,942 | ) | | $ | (25,088 | ) |
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Changes in valuation allowance |
Changes in our valuation allowance (in thousands) were as follows:
| | | | | | | | | | | | | | For the Years Ended December 31, | | 2019 | | 2018 | | 2017 | Balance at beginning-of-year | $ | 37,037 |
| | $ | 53,201 |
| | $ | 26,376 |
| Charged to costs and expenses | 9,250 |
| | 16,443 |
| | (7,371 | ) | Charged to other accounts (1) | 4,528 |
| | (32,607 | ) | | 34,196 |
| Balance at end-of-year | $ | 50,815 |
| | $ | 37,037 |
| | $ | 53,201 |
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(1) Amounts charged to other accounts includes an increase of $4.5 million and a decrease of $32.6 million and an increase of $34.2 million charged to additional paid-in-capital for the years ended December 31, 2019, 2018 and 2017, respectively.
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Changes in unrecognized tax benefits |
Changes in our unrecognized tax benefits (in thousands) were as follows: | | | | | | | | | | | | | | For the Years Ended December 31, | | 2019 | | 2018 | | 2017 | Balance at beginning-of-year | $ | 934 |
| | $ | 762 |
| | $ | — |
| Gross increases - tax positions in prior period | — |
| | 934 |
| | 1,108 |
| Gross decreases - tax positions in prior period | — |
| | (762 | ) | | — |
| Gross increases - tax positions in current period | — |
| | — |
| | 74 |
| Lapse of statute of limitations | (181 | ) | | — |
| | — |
| Change in tax rate | — |
| | — |
| | (420 | ) | Balance at end-of-year | $ | 753 |
| | $ | 934 |
| | $ | 762 |
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