Loss on divestments

[Table of Contents](#i89c3c9328e454b30b2c14123b867f3f0_7)EQUINIX, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)  
  
The tax benefit (expenses) for income taxes consisted of the following components for the years ended December 31, (in thousands):

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | 2021 |  | 2020 |  | 2019 |
| Current: |  |  |  |  |  |
| Federal  | $ | 7,753  |  |  | $ | 4,552  |  |  | $ | (17,906) |  |
| State and local  | (156) |  |  | 1,597  |  |  | (4,624) |  |
| Foreign  | (76,450) |  |  | (171,092) |  |  | (135,356) |  |
| Subtotal  | (68,853) |  |  | (164,943) |  |  | (157,886) |  |
| Deferred: |  |  |  |  |  |
| Federal  | 11,060  |  |  | 16,553  |  |  | (7,459) |  |
| State and local  | (1,411) |  |  | 704  |  |  | (1,775) |  |
| Foreign  | (50,020) |  |  | 1,535  |  |  | (18,232) |  |
| Subtotal  | (40,371) |  |  | 18,792  |  |  | (27,466) |  |
| Income tax expense | $ | (109,224) |  |  | $ | (146,151) |  |  | $ | (185,352) |  |

State and foreign taxes not based on income are included in general and administrative expenses and the aggregate amounts were not significant for the years ended December 31, 2021, 2020 and 2019.The fiscal 2021, 2020, and 2019 income tax benefit (expenses) differed from the amounts computed by applying the U.S. federal income tax rate of 21% to pre-tax income as a result of the following for the years ended December 31 (in thousands):

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | 2021 |  | 2020 |  | 2019 |
| Federal tax at statutory rate  | $ | (127,880) |  |  | $ | (109,906) |  |  | $ | (145,445) |  |
| State and local tax (expense) benefit | (1,513) |  |  | 2,071  |  |  | (5,852) |  |
| Deferred tax assets generated in current year not benefited  | (19,703) |  |  | (12,852) |  |  | (5,398) |  |
| Foreign income tax rate differential  | (18,918) |  |  | (16,364) |  |  | (11,610) |  |
| Non-deductible expenses  | (10,579) |  |  | (4,427) |  |  | (1,021) |  |
| Stock-based compensation expense  | (1,385) |  |  | (954) |  |  | (2,105) |  |
| Change in valuation allowance  | (595) |  |  | 390  |  |  | (2,870) |  |
| Foreign financing activities | (4,805) |  |  | (11,743) |  |  | (18,738) |  |
| Loss on divestments | —  |  |  | —  |  |  | (3,277) |  |
| Uncertain tax positions reserve  | 50,059  |  |  | (38,014) |  |  | (35,724) |  |
| Tax adjustments related to REIT | 39,164  |  |  | 50,107  |  |  | 63,614  |  |
| Change in deferred tax adjustments | (1,251) |  |  | (136) |  |  | (10,574) |  |
| Effect of tax rate change on deferred tax assets | (12,297) |  |  | —  |  |  | —  |  |
| Other, net  | 479  |  |  | (4,323) |  |  | (6,352) |  |
| Total income tax expense  | $ | (109,224) |  |  | $ | (146,151) |  |  | $ | (185,352) |  |

Of the unrecognized tax benefits being realized in the year ended December 31, 2021, approximately $32.0 million is related to the uncertain tax position inherited from the Metronode Acquisition in 2018, which is related to an outstanding income tax audit at the time of the acquisition. The uncertain tax position was covered by an indemnification agreement with the Seller. The income tax audit was settled during 2021, as such, the realization of the unrecognized tax benefits resulted in an impairment of the indemnification asset for the same amount, which has been included in Other Income (Expense) on the Consolidated Statements of Operations for the year ended December 31, 2021.Our accounting policy is to treat any tax on Global Intangible Low-Taxed Income ("GILTI") inclusions as a current period cost included in the tax expense in the year incurred. We believe the GILTI inclusion provision will F-54  

