Federal operating loss carry forwards

  
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at December 31 are as follows (in thousands):

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  | 2021 |  | 2020 |
| Deferred tax assets: |  |  |  |  |
| Accounts receivable, principally due to the allowance for doubtful accounts |  | $ | 13,987  |  |  | $ | 10,515  |  |
| Accrued expenses not currently deductible for tax |  | 6,252  |  |  | 3,442  |  |
| Lease deferral |  | 20,349  |  |  | 23,506  |  |
| Interest rate swap |  | 7,621  |  |  | 21,792  |  |
| Stock based compensation |  | 39,658  |  |  | 36,015  |  |
| Income tax credits |  | 51,264  |  |  | 51,264  |  |
| Net operating loss carry forwards |  | 76,988  |  |  | 83,372  |  |
| Accrued escheat |  | 3,170  |  |  | 3,567  |  |
| Other |  | 10,078  |  |  | 11,711  |  |
| Deferred tax assets before valuation allowance |  | 229,367  |  |  | 245,184  |  |
| Valuation allowance |  | (94,601) |  |  | (90,340) |  |
| Deferred tax assets, net |  | 134,766  |  |  | 154,844  |  |
| Deferred tax liabilities: |  |  |  |  |
| Intangibles—including goodwill |  | (520,349) |  |  | (481,388) |  |
| Basis difference in investment in subsidiaries |  | (42,938) |  |  | (42,313) |  |
| Lease deferral |  | (17,739) |  |  | (19,977) |  |
| Accrued Expense Liability  |  | (795) |  |  | (513) |  |
| Prepaid expenses |  | (1,788) |  |  | (2,126) |  |
| Withholding taxes |  | (38,704) |  |  | (30,488) |  |
| Property and equipment and other |  | (76,810) |  |  | (71,342) |  |
| Deferred tax liabilities |  | (699,123) |  |  | (648,147) |  |
| Net deferred tax liabilities |  | $ | (564,357) |  |  | $ | (493,303) |  |

The Company’s deferred tax balances are classified in its balance sheets as of December 31 as follows (in thousands): 

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  | 2021 |  | 2020 |
| Long term deferred tax assets and liabilities: |  |  |  |  |
| Long term deferred tax assets |  | $ | 1,934  |  |  | $ | 4,851  |  |
| Long term deferred tax liabilities |  | (566,291) |  |  | (498,154) |  |
|  |  |  |  |  |
| Net deferred tax liabilities |  | $ | (564,357) |  |  | $ | (493,303) |  |

The valuation allowances relate to capital loss carryforwards, income tax credits, foreign net operating loss carryforwards and state net operating loss carryforwards. The net change in the total valuation allowance for the year ended December 31, 2021, was an increase of $4.3 million. The valuation increase was primarily due to net operating losses generated in certain states where the Company and its subsidiaries file on a separate company basis as well as an increase in foreign net operating losses where significant negative evidence on future utilization was considered.As of December 31, 2021, the Company had a net operating loss carryforward for U.S. federal income tax purposes of approximately $4.0 million gross of tax that is available to offset U.S. federal taxable income indefinitely. The Company had a net operating loss carryforward for state income tax purposes of approximately $837.2 million gross of tax that is available to offset future state taxable income indefinitely, and in some cases subject to expiration in 15 or 20 years. Additionally, the Company had $93.9 million net operating loss carryforwards gross of tax that are available to offset future foreign taxable income. Most foreign net operating loss carryforwards will not expire in future years. The Company has provided a valuation allowance against $42.0 million of its deferred tax asset related to the net operating losses as it does not anticipate utilizing the losses in the foreseeable future.82
