Income taxes:

12 Months Ended

Dec. 31, 2021

Income taxes:

Income taxes:

5. Income taxes:

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

	Years Ended December 31,
	2021		2020		2019
Domestic	$	73,753	$	23,808	$	72,773
Foreign		(2,333)		(13,496)		(20,099)
Total income before income taxes	$	71,420	$	10,312	$	52,674

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

	Years Ended December 31,
	2021		2020		2019
Current:
Federal	$	—	$	32	$	—
State		(3,116)		(2,908)		(2,647)
Foreign		(1,833)		(947)		(370)
Deferred:
Federal		(17,959)		(1,867)		(10,899)
State		(2,348)		1,241		(1,285)
Foreign		2,021		353		47
Total income tax expense	$	(23,235)	$	(4,096)	$	(15,154)

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

	December 31,
	2021		2020
Deferred Tax Assets:
Net operating loss carry-forwards	$	246,276	$	273,999
Tax credits		2,119		1,965
Equity-based compensation		3,976		4,901
Operating leases		40,627		40,081
Total gross deferred tax assets		292,998		320,946
Valuation allowance		(132,800)		(150,589)
		160,198		170,357
Deferred Tax Liabilities:
Depreciation and amortization		46,642		37,364
Accrued liabilities and other		103,705		105,554
Right-of-use assets		37,784		37,097
Gross deferred tax liabilities		188,131		180,015
Net deferred tax liabilities	$	27,933	$	9,658

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, Asia, South America, Australia and Africa and net operating losses in the United States that are limited for use under Section 382 of the Internal Revenue Code.

As of December 31, 2021, 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 $39.5 million, net operating loss carry-forwards related to its European operations of $967.9 million and $7.3 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, 2021 in the United States $25.6 million are limited for use under Section 382. Net operating loss carryforwards outside of the United States totaling $1.0 billion are not subject to limitations similar to Section 382. The net operating loss carryforwards in the United States will expire, if unused, between 2026 and 2036. The net operating loss carry-forwards related to the Company’s European operations include $826.7 million that do not expire and $141.2 million that expire between 2022 and 2037.

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 does not have a material liability for uncertain tax positions at December 31, 2021 and does not expect that its liability for uncertain tax positions will materially increase during the twelve months ended December 31, 2022, 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 subsidiaries 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 2004 to 2021. The Company is subject to tax examinations in its foreign jurisdictions generally for years 2005 to 2021.

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,
	2021		2020		2019
Federal income tax expense at statutory rates	$	(14,999)	$	(2,166)	$	(11,061)
Effect of:
State income taxes, net of federal benefit		(4,123)		(1,091)		(2,973)
Impact of foreign operations		715		(365)		(505)
Non-deductible expenses		(1,365)		(411)		(491)
Tax effect of TCJA from foreign earnings		(389)		(66)		(28)
Other		—		32		(32)
Changes in valuation allowance		(3,074)		(29)		(64)
Income tax expense	$	(23,235)	$	(4,096)	$	(15,154)