Income Taxes

The components of income (loss) before the provision for income taxes are as follows (in thousands):



	Years Ended December 31,
	2019			2018			2017
				As Restated			As Revised
United States	$	(324,467	)	$	(291,574	)	$	(297,473	)
Foreign	1,634			1,835			3,081
Total	$	(322,833	)	$	(289,739	)	$	(294,392	)

The provision for income taxes is comprised of the following (in thousands):



	Years Ended December 31,
	2019		2018			2017

Current:
Federal	$	—	$	—		$	—
State	26		191			25
Foreign	595		1,407			621
Total current	621		1,598			646
Deferred:
Federal	—		—			—
State	—		—			—
Foreign	12		(61		)	(10		)
Total deferred	12		(61		)	(10		)
Total provision for income taxes	$	633	$	1,537		$	636

A reconciliation of the U.S. federal statutory income tax rate to our effective tax rate is as follows (in thousands):



	Years Ended December 31,
	2019			2018			2017
				As Restated			As Revised
Tax at federal statutory rate	$	(67,795	)	$	(60,845	)	$	(100,093	)
State taxes, net of federal effect	26			191			25
Impact on noncontrolling interest	4,001			3,725			6,347
Non-U.S. tax effect	264			960			(437		)
Nondeductible expenses	144			6,796			5,698
Stock-based compensation	6,484			3,892			4,854
U.S. tax reform impact	—			—			239,117
U.S. tax on foreign earnings (GILTI)	221			127			—
Change in valuation allowance	57,288			46,691			(154,875		)
Provision for income taxes	$	633		$	1,537		$	636

For the year ended December 31, 2019, we recorded a provision for income taxes of $0.6 million on a pre-tax loss of $322.8 million, for an effective tax rate of (0.2)%. For the year ended December 31, 2018, we recorded a provision for income taxes of $1.5 million on a pre-tax loss of $289.7 million, for an effective tax rate of (0.5)%. For the year ended December 31, 2017, we recorded a provision for income taxes of $0.6 million on a pre-tax loss of $294.4 million, for an effective tax rate of (0.2)%. The effective tax rate for 2019, 2018 and 2017 is lower than the statutory federal tax rate primarily due to a full valuation allowance against U.S. deferred tax assets.

Significant components of our deferred tax assets and liabilities consist of the following (in thousands):



	December 31,
	2019			2018
				As Restated
Tax credits and NOLs	$	494,084		$	468,402
Leased liabilities	122,145			108,113
Depreciation and amortization	8,523			9,631
Deferred revenue	6,688			457
Accruals and reserves	5,874			4,462
Stock-based compensation	61,808			62,793
Other items - DTA	24,443			17,863
Gross deferred tax assets	723,565			671,721
Valuation allowance	(633,591		)	(571,277		)
Net deferred tax assets	89,974			100,444
Investment in PPA entities	(13,494		)	(21,587		)
Debt issuance cost	(4,055		)	(8,586		)
Leased assets	(65,978		)	(62,681		)
Other items - DTL	(5,803		)	(6,817		)
Gross deferred tax liabilities	(89,330		)	(99,671		)
Net deferred tax asset	$	644		$	773

Income taxes are recorded using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income (or loss) in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, is not more-likely-than-not to be realized. Management believes that, based on available evidence, both positive and negative, it is not more likely than not that the net U.S. deferred tax assets will be utilized. As a result, a full valuation allowance has been recorded.

The valuation allowance for deferred tax assets was $633.6 million and $571.3 million as of December 31, 2019 and 2018, respectively. The net change in the total valuation allowance for the years ended December 31, 2019 and 2018 was an increase of $62.3 million and an increase of $24.0 million, respectively.

At December 31, 2019, we had federal and state net operating loss carryforwards of $1.8 billion and $1.6 billion, respectively, to reduce future taxable income. Of the federal net operating loss carryforwards, $1.7 billion will begin to expire in 2022 and $125.2 million will carryforward indefinitely, while state net operating losses begin to expire in 2028. In addition, we had approximately $20.5 million of federal research credit, $6.6 million of federal investment tax credit, and $14.0 million of state research credit carryforwards. The federal tax credit carryforwards begin to expire in 2022.The state credit carryforwards may be carried forward indefinitely. We have not reflected deferred tax assets for the federal and state research credit carryforwards as the entire amount of the carryforwards represent unrecognized tax benefits.

Internal Revenue Code Section 382 (“Section 382”) limits the use of net operating loss and tax credit carryforwards in certain situations in which changes occur in our capital stock ownership. Any annual limitation may result in the expiration of net operating losses and credits before utilization. If we should have an ownership change, as defined by the tax law, utilization of the net operating loss and credit carryforwards could be significantly reduced. We completed a Section 382 analysis through December 31, 2019. Based on this analysis, Section 382 limitations will not have a material impact on our net operating loss and credit carryforwards related to any ownership changes which occurred during the period covered by the analysis.

During the year ended December 31, 2019, the amount of uncertain tax positions increased by $4.2 million. We have not recorded any uncertain tax liabilities associated with its tax positions.

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



	Years Ended December 31,
	2019			2018
Unrecognized tax benefits beginning balance	$	30,311		$	28,331
Gross decrease for tax positions of prior year	(93		)	(468		)
Gross increase for tax positions of prior year	615			353
Gross increase for tax positions of current year	3,647			2,095
Unrecognized tax benefits end balance	$	34,480		$	30,311

If fully recognized in the future, there would be no impact to the effective tax rate, and $31.5 million would result in adjustments to the valuation allowance. We do not have any tax positions that are expected to significantly increase or decrease within the next 12 months.

Interest and penalties, to the extent there are any, are included in income tax expense and there were no interest or penalties accrued during or for the years ended December 31, 2019 and 2018.

We are subject to taxation in the United States and various states and foreign jurisdictions. We currently do not have any income tax examinations in progress nor have we had any income tax examinations since our inception. All of our tax years will remain open for examination by federal and state authorities for three and four years from the date of utilization of any net operating losses and tax credits.

The Tax Cuts and Jobs Act of 2017 ("Tax Act") includes a provision referred to as Global Intangible Low-Taxed Income ("GILTI") which generally imposes a tax on foreign income in excess of a deemed return on tangible assets. FASB guidance issued in January 2018 allows companies to make an accounting policy election to either (i) account for GILTI as a component of tax expense in the period in which the tax is incurred ("period cost method"), or (ii) account for GILTI in the measurement of deferred taxes ("deferred method"). We elected to account for the tax effects of this provision using the period cost method.

Our accumulated undistributed foreign earnings as of December 31, 2019 have been subject to either the deemed one-time mandatory repatriation under the Tax Act or the current year income inclusion under GILTI regime for U.S. tax purposes. If we were to make actual distributions of some or all of these earnings, including earnings accumulated after December 31, 2017, we would generally incur no additional U.S. income tax but could incur U.S. state income tax and foreign withholding taxes. We have not accrued for these potential U.S. state income tax and foreign withholding taxes because we intend to permanently reinvest our foreign earnings in our international operations. However, any additional income tax associated with the distribution of these earnings would be immaterial.