Annual report pursuant to Section 13 and 15(d)

Income Taxes (Tables)

v3.19.1
Income Taxes (Tables)
12 Months Ended
Dec. 31, 2018
Income Tax Disclosure [Abstract]  
Schedule of Income before Income Tax, Domestic and Foreign
United States and foreign income (loss) from operations before income taxes was as follows (in thousands):

 
Year Ended December 31,
 
2018
 
2017
 
2016
United States
$
(239,989
)
 
$
(336,278
)
 
$
(119,549
)
Foreign
6,458

 
(25,723
)
 
(38,294
)
Loss before income taxes
$
(233,531
)
 
$
(362,001
)
 
$
(157,843
)
Schedule of Components of Income Tax Expense (Benefit)
The income tax provision based on the income (loss) from operations was as follows (in thousands):

 
Year Ended December 31,
 
2018
 
2017
 
2016
Current provision (benefit):
 
 
 
 
 
Federal
$
289

 
$
(323
)
 
$
47

State
211

 
(136
)
 
227

Foreign
10,473

 
12,485

 
15,184

Total current provision
$
10,973

 
$
12,026

 
$
15,458

Deferred benefit:
 
 
 
 
 
Federal
$
(6,924
)
 
$
(9,173
)
 
$
(53,395
)
State
(331
)
 
(60
)
 
(2,070
)
Foreign
(650
)
 
(7,680
)
 
(4,904
)
Total deferred benefit
(7,905
)
 
(16,913
)
 
(60,369
)
Total income tax provision (benefit)
$
3,068

 
$
(4,887
)
 
$
(44,911
)
Schedule of Effective Income Tax Rate Reconciliation
Income taxes differ from the amounts computed by applying the federal income tax rate of 21% for 2018 and 35% for 2017 and 2016. A reconciliation of this difference is as follows (in thousands):

 
Year Ended December 31,
 
2018
 
2017
 
2016
Income tax benefit at federal statutory rate
$
(49,042
)
 
$
(126,700
)
 
$
(55,245
)
State income tax, net of federal benefit
(185
)
 
(272
)
 
(1,898
)
Permanent items
633

 
3,623

 
1,781

Loss on distribution in kind
(23,755
)
 

 

Change in fair value of financial instruments
(4
)
 
(1,102
)
 
(8,836
)
Goodwill impairment

 
55,016

 
12,321

Sound-recording settlements

 

 
8,556

Stock-based compensation
2,700

 
2,660

 
229

Tax credits
(106
)
 
(116
)
 
(590
)
Other
(12,636
)
 
1,608

 
2,977

Uncertain tax positions
107

 
(420
)
 
3,858

Withholding taxes
9,137

 
5,090

 
4,732

Rate differential
6,657

 
(12,187
)
 
(2,158
)
Change in enacted tax rate
54

 
28,431

 
173

Change in valuation allowance
69,508

 
39,482

 
(10,811
)
Income tax provision (benefit)
$
3,068

 
$
(4,887
)
 
$
(44,911
)
Schedule of Deferred Tax Assets and Liabilities
Significant components of the deferred income taxes are as follows (in thousands):

 
 December 31,
 
2018
 
2017
Deferred tax assets:
 
 
 
Goodwill
$
6,734

 
$
15,272

Allowances and reserves
1,469

 
3,973

Accrued liabilities
3,908

 
5,135

Inventories
1,839

 
1,307

Stock-based compensation
4,363

 
5,043

Interest expense carryover
23,877

 

Tax credits
2,225

 
3,393

Net operating losses
144,010

 
98,249

Other
448

 
1,893

Total deferred tax assets
188,873

 
134,265

Less: valuation allowance
(161,511
)
 
(85,393
)
Net deferred tax assets
$
27,362

 
$
48,872

 
 
 
 
Deferred tax liabilities:
 
 
 
Property, plant and equipment
$
(8,737
)
 
$
(11,345
)
Intangible assets
(7,149
)
 
(21,170
)
Investments in affiliates
(17,253
)
 
(28,530
)
Debt costs
(2,550
)
 
(2,696
)
Other

 
(1,378
)
Total deferred tax liabilities
(35,689
)
 
(65,119
)
Net deferred tax liabilities
$
(8,327
)
 
$
(16,247
)
Schedule of Unrecognized Tax Benefits Roll Forward
The following table summarizes the changes to unrecognized tax benefits for the years ended December 31, 2018, 2017 and 2016 (in thousands):

 
2018
 
2017
 
2016
Balance at beginning of year
$
8,728

 
$
11,048

 
$
4,637

Additions from business combinations

 

 
3,492

Increase to prior year positions

 

 
(34
)
Reversal of prior tax positions
(786
)
 
(3,045
)
 
(147
)
Additions based on tax positions related to current year

 
725

 
3,100

Balance at end of year
$
7,942

 
$
8,728

 
$
11,048

Summary of Valuation Allowance
The following table summarizes the changes in the valuation allowance balance for the years ended December 31, 2018, 2017 and 2016 (in thousands):

 
Amount
Balance at December 31, 2015
$
53,199

Decrease in valuation allowance
(9,930
)
Balance at December 31, 2016
43,269

Increase in valuation allowance
42,124

Balance at December 31, 2017
85,393

Increase in valuation allowance
$
76,118

Balance at December 31, 2018
$
161,511