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Income taxes:

12 Months Ended

Dec. 31, 2024

Income taxes:

Income taxes:

5. Income taxes:

The components of (loss) income before income taxes consist of the following (in thousands):

​	​	​	​	​	​	​	​	​	​
​	​	Years Ended December 31,
​		2024			2023			2022
Domestic	​	$	(257,523)	​	$	1,217,084	​	$	34,784
Foreign	​		(2,126)	​	​	2,393	​	​	(8,408)
Total (loss) income before income taxes	​	$	(259,649)	​	$	1,219,477	​	$	26,376

​

The income tax benefit (expense) is comprised of the following (in thousands):

​	​	​	​	​	​	​	​	​	​
​	​	Years Ended December 31,
​		2024			2023			2022
Current:	​	​	​	​	​	​	​	​	​
Federal	​	$	—	​	$	(3,638)	​	$	—
State	​		4,620	​		(11,868)	​		(4,195)
Foreign	​		(351)	​		(203)	​		(496)
Deferred:	​	​	​	​	​	​	​	​	​
Federal	​		54,859	​		53,393	​		(16,299)
State	​		(3,143)	​		16,086	​		(143)
Foreign	​		(410)	​		194	​		(97)
Total income tax benefit (expense)	​	$	55,575	​	$	53,964	​	$	(21,230)

​

Our consolidated temporary differences comprising our net deferred tax assets are as follows (in thousands):

​

​	​	​	​	​	​	​
​	​	December 31,
​		2024			2023
Deferred Tax Assets:	​	​	​	​	​	​
Net operating loss carry-forwards	​	$	236,346	​	$	244,306
Interest expense limitation	​		66,386	​	​	34,828
Accrued liabilities and other	​	​	8,584	​	​	12,055
Operating leases	​	​	98,261	​	​	107,563
Total gross deferred tax assets	​		409,577	​	​	398,752
Valuation allowance	​	​	(131,773)	​	​	(136,533)
​	​	​	277,804	​	​	262,219
Deferred Tax Liabilities:	​	​	​	​	​	​
Property & equipment	​		308,254	​	​	295,630
Intangibles	​		113,596	​	​	118,727
Deferred consideration – IP Transit Services Agreement	​	​	63,070	​	​	114,844
Investment in foreign subsidiaries	​	​	95,974	​	​	100,081
Right-of-use assets	​	​	95,176	​	​	104,435
Gross deferred tax liabilities	​		676,070	​	​	733,717
Net deferred tax liabilities	​	$	398,266	​	$	471,498

​

The acquisition of Sprint was an asset acquisition for US federal income tax purposes. The Company recorded a net, deferred tax liability of $475 million, that represents the difference in book basis and tax basis of the assets acquired and liabilities assumed. The Seller indemnified the Company for historical tax exposures and the estimated indemnification asset is not material.

At each balance sheet date, the Company assesses the likelihood that it will be able to realize its deferred tax assets. The Company considers all available positive and negative evidence in assessing the need for a valuation allowance. The Company maintains a full valuation allowance against certain of its deferred tax assets consisting primarily of net operating loss carryforwards related to its foreign operations in Europe, South America, Oceania and Africa.

As of December 31, 2024, the Company has combined net operating loss carry-forwards of $1.0 billion. This amount includes federal net operating loss carry-forwards in the United States of $27.4 million, net operating loss carry-forwards related to its European operations of $956.9 million and $35.6 million related to its other international operations. Section 382 of the Internal Revenue Code in the United States limits the utilization of net operating losses when ownership changes, as defined by that section, occur. The Company has performed an analysis of its Section 382 ownership changes and has determined that the utilization of certain of its net operating loss carryforwards in the United States is limited based on the annual Section 382 limitation and remaining carryforward period. Of the net operating losses available at December 31, 2024 in the United States $12.8 million are limited for use under Section 382. Net operating loss carryforwards outside of the United States totaling $992.5 million are not subject to limitations similar to Section 382. There are $12.8 million of net operating loss carryforwards in the United States that will expire, if unused, in 2025. The net operating loss carry-forwards related to the Company’s European operations include $828.0 million that do not expire and $128.8 million that expire between 2025 and 2038.

The Company has not provided for United States deferred income taxes or foreign withholding taxes on its undistributed earnings for certain non-US subsidiaries earnings or cumulative translation adjustments because these earnings and adjustments are intended to be permanently reinvested in operations outside the United States. It is not practical to determine the amount of the unrecognized deferred tax liability on such undistributed earnings or cumulative translation adjustments.

In the normal course of business, the Company takes positions on its tax returns that may be challenged by taxing authorities. The Company evaluates all uncertain tax positions to assess whether the position will more likely than not be sustained upon examination. If the Company determines that the tax position is not more likely than not to be sustained, the Company records a liability for the amount of the benefit that is not more likely than not to be realized when the tax position is settled. The Company did not have a material liability for uncertain tax positions at December 31, 2024, 2023 and 2022, and does not expect that its liability for uncertain tax positions will materially increase during the year ended December 31, 2025; however, actual changes in the liability for uncertain tax positions could be different than currently expected. If recognized, changes in the Company’s total unrecognized tax benefits would impact the Company’s effective income tax rate.

The Company or one of its subsidiary’s files income tax returns in the US federal jurisdiction and various state and foreign jurisdictions. The Company is subject to US federal tax and state tax examinations for years 2005 to 2025. The Company is subject to tax examinations in its foreign jurisdictions generally for years 2005 to 2024.

The following is a reconciliation of the Federal statutory income taxes to the amounts reported in the financial statements (in thousands).

​

​	​	​	​	​	​	​	​	​	​
​	​	Years Ended December 31,
​		2024			2023			2022
Federal income tax expense at statutory rates	​	$	54,381	​	$	(256,086)	​	$	(5,537)
Effect of:	​	​	​	​	​	​	​	​	​
State income taxes, net of federal benefit	​		1,587	​	​	3,722	​	​	(1,700)
Impact of foreign operations	​		(1,602)	​	​	868	​	​	(651)
Non-deductible expenses	​		(2,713)	​	​	(2,783)	​	​	(2,679)
Bargain purchase gain - Sprint Business acquisition	​	​	4,662	​	​	295,351	​	​	—
Tax effect of TCJA from foreign earnings	​		—	​	​	(490)	​	​	(360)
Changes in valuation allowance	​		(740)	​	​	13,382	​	​	(10,303)
Income tax benefit (expense)	​	$	55,575	​	$	53,964	​	$	(21,230)

​

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