Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Schedule of Components of Income Tax Expense (Benefit)

The provision for income tax expense (benefit), including the amount of domestic and foreign loss before taxes, is as follows:


	Year Ended December 31,
(in $000s)	2021		2020		2019
Components of income (loss) before tax:
Domestic	$	(180,669)	$	(49,096)	$	(30,046)
Foreign	3,593		(2,255)		(2,992)
Total income (loss) before tax	(177,076)		(51,351)		(33,038)

Current tax expense (benefit):
Federal	—		(1,393)		—
Foreign	320		61		483
State	242		66		392
Total current tax expense (benefit)	562		(1,266)		875

Deferred tax expense (benefit):
Federal	(33,415)		(9,179)		852
Foreign	826		—		—
State	(9,507)		(1,786)		244
Total deferred tax expense (benefit)	(42,096)		(10,965)		1,096

Expense (benefit) from change in valuation allowance	45,959		(17,843)		(7,957)

Total tax expense (benefit)	$	4,425	$	(30,074)	$	(5,986)

Schedule of Effective Income Tax Rate Reconciliation

A reconciliation between the federal statutory income tax rate and our actual effective income tax rate is as follows:


	Year Ended December 31,
	2021	2020	2019
Expected federal statutory income tax rate	21.0%	21.0%	21.0%
Tax effect of differences:

Foreign operations	(0.3)%	(0.1)%	(1.2)%
Share-based payments	1.0%	(0.2)%	(0.1)%
Effect of state income taxes, net of federal income tax benefit	5.2%	2.6%	5.0%
Nondeductible acquisition costs	(0.7)%	—%	—%
Nondeductible expense on Warrants (see Note 16)	(1.3)%	—%	—%
Change in valuation allowance	(25.8)%	34.7%	(8.4)%
Other	(1.6)%	0.6%	1.8%
Effective income tax rate	(2.5)%	58.6%	18.1%

Schedule of Deferred Tax Assets and Liabilities

The components of the deferred tax assets and liabilities are as follows:


(in $000s)	December 31, 2021		December 31, 2020
Deferred tax assets
Accounts receivable	$	2,703	$	1,729
Inventory	6,435		740
Transaction and debt issuance costs	4,946		2,609
Compensation and benefits	6,067		668
Net operating loss carryforwards	241,663		88,913
Section 163j interest disallowance carryforwards	21,283		9,084
Operating lease liabilities(a)	8,731		—
Foreign tax credits, accrued expenses, and other	455		1,977
Total deferred tax assets	292,283		105,720
Less: valuation allowance	(84,577)		(16,542)
Total deferred tax assets, net	207,706		89,178

Deferred tax liabilities
Financing receivable	(3,466)		—
Rental equipment and other property and equipment	(173,522)		(50,554)
Goodwill and other intangibles	(36,825)		(21,672)
Operating lease assets(a)	(8,647)		—
Prepaid expenses and other items	(867)		—
Total deferred tax liabilities	(223,327)		(72,226)
Net deferred tax asset (liability)	$	(15,621)	$	16,952

(a) As a result of the adoption of Topic 842 during the year ended December 31, 2021, the Company recognized deferred taxes related to operating lease operating lease right-of-use assets and operating lease liabilities.

Summary of Valuation Allowance

The following presents changes in the valuation allowance:


	Year Ended December 31,
(in $000s)	2021		2020		2019
Valuation allowance - beginning of year	$	(16,542)	$	(34,385)	$	(31,610)
Assigned in purchase accounting (see Note 3)	(22,076)		—		—
Charged to benefit (expense)(a)	(45,959)		17,843		(2,775)
Valuation allowance - end of year	$	(84,577)	$	(16,542)	$	(34,385)

(a) Charged to benefit (expense) during the year ended December 31, 2021 includes a reduction to the allowance of approximately $9.1 million related to federal and state disallowed interest expense deduction carryforwards, offset by additional valuation allowance related to tax losses generated in the year, resulting in net income tax expense of $4.4 million.