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Income Taxes | 12 Months Ended
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Dec. 31, 2021
Income Tax Disclosure [Abstract] |
Income Taxes | (14) Income Taxes The sources of income before income taxes for the years ended December 31, 2021, 2020 and 2019 are presented as follows:
|  | Year Ended December 31,
(in thousands) |  | 2021 |  | 2020 |  | 2019
Income before taxes: |  |  |  |  |  |
United States |  | $ | (4,775 | ) |  | $ | 40,323 |  |  | $ | 44,290 |
Foreign |  | 140,450 |  |  | (32,152 | ) |  | 389,517 |
Total income before income taxes |  | $ | 135,675 |  |  | $ | 8,171 |  |  | $ | 433,807 |
The Company's income tax expense for the years ended December 31, 2021, 2020 and 2019 consisted of the following:
|  | Year Ended December 31,
(in thousands) |  | 2021 |  | 2020 |  | 2019
Current tax expense (benefit): |  |  |  |  |  |
U.S. |  | $ | 2,810 |  |  | $ | 2,605 |  |  | $ | (4,885 | )
Foreign |  | 59,874 |  |  | 39,270 |  |  | 83,792 |
Total current |  | 62,684 |  |  | 41,875 |  |  | 78,907 |
Deferred tax expense (benefit): |  |  |  |  |  |  |  |  |
U.S. |  | 12,269 |  |  | (16,100 | ) |  | (8,424 | )
Foreign |  | (9,865 | ) |  | (14,300 | ) |  | 16,629 |
Total deferred |  | 2,404 |  |  | (30,400 | ) |  | 8,205 |
Total tax expense |  | $ | 65,088 |  |  | $ | 11,475 |  |  | $ | 87,112 |
The following is a reconciliation of the federal statutory income tax rates of 21% to the effective income tax rate for the years ended December 31, 2021, 2020 and 2019:
|  | Year Ended December 31,
(dollar amounts in thousands) |  | 2021 |  | 2020 |  | 2019
U.S. federal income tax expense at applicable statutory rate |  | $ | 28,492 |  |  | $ | 1,716 |  |  | $ | 91,099 |
Tax effect of: |  |  |  |  |  |  |  |  |
State income tax expense at statutory rates, net of U.S. federal income tax |  | 1,516 |  |  | 347 |  |  | 5,101 |
Non-deductible expenses |  | 538 |  |  | 1,887 |  |  | 2,896 |
Share-based compensation |  | (3,524 | ) |  | (6,446 | ) |  | (2,875 | )
Other permanent differences |  | (2,047 | ) |  | 3,828 |  |  | (864 | )
Difference between U.S. federal and foreign tax rates |  | 7,438 |  |  | 7,002 |  |  | 12,281 |
Provision in excess of statutory rates |  | 2,879 |  |  | (6,491) |  |  | 3,565 |
Change in federal and foreign valuation allowance |  | 26,673 |  |  | (4,238) |  |  | 2,144 |
Impairment of goodwill and acquired intangibles assets |  | — |  |  | 22,053 |  |  | — |
GILTI, net of tax credits |  | 3,900 |  |  | — |  |  | 6,471 |
U.S. Tax Reform - transition tax and rate change |  | — |  |  | — |  |  | (25,728 | )
Tax credits |  | (1,122 | ) |  | (3,518 | ) |  | (4,500 | )
Other |  | 345 |  |  | (4,665 | ) |  | (2,478 | )
Total income tax expense |  | $ | 65,088 |  |  | $ | 11,475 |  |  | $ | 87,112 |
Effective tax rate |  | 48.0 | % |  | 140.4 | % |  | 20.1 | %
We calculate our provision for federal, state and international income taxes based on current tax law. In the fourth quarter of 2019 after additional regulatory guidance was issued by applicable taxing authorities relating to the U.S. Tax Reform, the Company elected to claim U.S. foreign tax credits, which reduced the net tax expense by $25.7 million. The tax effect of temporary differences and carryforwards that give rise to deferred tax assets and liabilities from continuing operations are as follows:
|  | As of December 31,
(in thousands) |  | 2021 |  | 2020
Deferred tax assets: |  |  |  |
Tax loss carryforwards |  | $ | 65,862 |  |  | $ | 45,609 |
Share-based compensation |  | 9,743 |  |  | 6,771 |
Accrued expenses |  | 19,907 |  |  | 22,243 |
Property and equipment |  | 11,949 |  |  | 10,835 |
Goodwill and intangible amortization |  | 9,353 |  |  | 7,614 |
Contract costs |  | 9,921 |  |  | — |
Intercompany notes |  | 6,077 |  |  | 7,689 |
Accrued revenue |  | 7,541 |  |  | 34,663 |
Tax credits |  | 65,267 |  |  | 65,388 |
Lease accounting |  | 42,381 |  |  | 39,962 |
Foreign exchange |  | 8,283 |  |  | 19,160 |
Other |  | 14,616 |  |  | 14,230 |
Gross deferred tax assets |  | 270,900 |  |  | 274,164 |
Valuation allowance |  | (100,489 | ) |  | (77,563 | )
Net deferred tax assets |  | 170,411 |  |  | 196,601 |
Deferred tax liabilities: |  |  |  |  |  |
Intangible assets related to purchase accounting |  | (11,763 | ) |  | (12,854 | )
Goodwill and intangible amortization |  | (30,339 | ) |  | (24,763 | )
Accrued expenses |  | (21,495 | ) |  | (43,971 | )
Intercompany notes |  | (10,388 | ) |  | (10,396 | )
Accrued interest |  | (34,175 | ) |  | (30,932 | )
Capitalized research and development |  | (6,376 | ) |  | (6,352 | )
Property and equipment |  | (15,597 | ) |  | (18,295 | )
Accrued revenue |  | (2,073 | ) |  | (1,829 | )
Lease accounting |  | (42,381 | ) |  | (39,962 | )
Foreign exchange |  | (1,211 | ) |  | (10,880 | )
Other |  | (3,971 | ) |  | (6,826 | )
Total deferred tax liabilities |  | (179,769 | ) |  | (207,060 | )
Net deferred tax liabilities |  | $ | (9,358 | ) |  | $ | (10,459 | )
Net deferred tax assets of $37.7 million and $27.4 million as of December 31, 2021 and 2020, respectively, are recorded within "Other assets" on the Consolidated Balance Sheet. Subsequently recognized tax benefits relating to the valuation allowance for deferred tax assets as of December 31, 2021 are expected to be allocated to income taxes in the Consolidated Statements of Operations. As of December 31, 2021, and 2020, the Company's foreign tax loss carryforwards were $267.3 million and $197.4 million, respectively, and U.S. state tax loss carryforwards were $73.7 million and $95.8 million, respectively. As of December 31, 2021, the Company had U.S. foreign tax credit carryforwards of $61.6 million which are largely not expected to be utilized in future periods. In assessing the Company's ability to realize deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more likely than not the Company will realize the benefits of these deductible differences, net of the existing valuation allowances, as of December 31, 2021. As of December 31, 2021, the Company had foreign tax net operating loss carryforwards of $267.3 million, which will expire as follows:
(in thousands) |  | Gross |  | Tax Effected
Year ending December 31, |  |  |  |
2022 |  | $ | 3,960 |  |  | $ | 749 |
2023 |  | 2,296 |  |  | 533 |
2024 |  | 3,153 |  |  | 711 |
2025 |  | 21,012 |  |  | 4,664 |
2026 |  | 21,767 |  |  | 4,843 |
Thereafter |  | 25,465 |  |  | 6,501 |
Unlimited |  | 189,670 |  |  | 45,792 |
Total |  | $ | 267,323 |  |  | $ | 63,793 |
In addition, the Company's state tax net operating loss carryforwards of $73.7 million will expire periodically from 2022 through 2041, U.S. foreign tax credit carryforwards of $61.6 million that will expire periodically from 2022 through 2030 and U.S. federal research and expenditure credit carryforwards of $3.3 million that will expire periodically from 2034 through 2038. While U.S. tax expense has been recognized as a result of the transition tax and global intangible low-taxed income, or GILTI, provisions of U.S. Tax Reform, the Company has not provided additional deferred taxes with respect to items such as certain foreign exchange gains or losses, foreign withholding taxes or additional state taxes, if any, on undistributed earnings attributable to foreign subsidiaries and it is not practical to determine the income tax liability that would be payable if such earnings were not reinvested indefinitely. Gross undistributed earnings reinvested indefinitely in foreign subsidiaries aggregated approximately $1,808.8 million as of December 31, 2021. Accounting for uncertainty in income taxes A reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31, 2021 and 2020 is as follows:
|  | Year Ended December 31,
(in thousands) |  | 2021 |  | 2020
Beginning balance |  | $ | 39,785 |  |  | $ | 44,535 |
Additions based on tax positions related to the current year |  | 3,815 |  |  | 7,331 |
Additions for tax positions of prior years |  | — |  |  | — |
Reductions for tax positions of prior years |  | (1,998 | ) |  | (1,349 | )
Settlements |  | — |  |  | (10,127 | )
Statute of limitations expiration |  | (612 | ) |  | (605 | )
Ending balance |  | $ | 40,990 |  |  | $ | 39,785 |
As of December 31, 2021 and 2020, approximately $29.1 million and $31.8 million, respectively, of the unrecognized tax benefits would impact the Company's provision for income taxes and effective income tax rate, if recognized. Total estimated accrued interest and penalties related to the underpayment of income taxes was $7.2 million and $6.2 million as of December 31, 2021 and 2020, respectively. The following income tax years remain open in the Company's major jurisdictions as of December 31, 2021:
Jurisdictions | Periods
U.S. (Federal) | 2014 through 2021
Germany | 2016 through 2021
Greece | 2013 through 2021
Spain | 2015 through 2021
U.K. | 2018 through 2021
It is reasonably possible that the balance of gross unrecognized tax benefits could significantly change within the next twelve months as a result of the resolution of audit examinations and expirations of certain statutes of limitations and, accordingly, materially affect the Company's operating results. At this time, it is not possible to estimate the range of change due to the uncertainty of potential outcomes.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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