Net operating loss carryforwards that will not be available to offset

[Table of Contents](#i89c3c9328e454b30b2c14123b867f3f0_7)EQUINIX, INC.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)  
  
Changes in the valuation allowance for deferred tax assets for the years ended December 31, 2021, 2020 and 2019 are as follows (in thousands):

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | 2021 |  | 2020 |  | 2019 |
| Beginning balance  | $ | 82,344  |  |  | $ | 57,812  |  |  | $ | 57,003  |  |
| Amounts from acquisitions | 964  |  |  | 5,777  |  |  | (2,707) |  |
| Divested balances | —  |  |  | —  |  |  | (351) |  |
| Amounts recognized into income  | 595  |  |  | (390) |  |  | 2,870  |  |
| Current increase | 19,539  |  |  | 15,044  |  |  | 697  |  |
| Impact of foreign currency exchange | (2,696) |  |  | 4,101  |  |  | 300  |  |
| Ending balance  | $ | 100,746  |  |  | $ | 82,344  |  |  | $ | 57,812  |  |

Our NOL carryforwards for federal, state and foreign tax purposes which expire, if not utilized, at various intervals from 2022, are outlined below (in thousands):

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Expiration Date |  | Federal (1) |  | State |  | Foreign (2) (3) |  | Total |
| 2022 |  | $ | 20,808  |  |  | $ | —  |  |  | $ | 754  |  |  | $ | 21,562  |  |
| 2023 to 2025 |  | 26,838  |  |  | 112  |  |  | 25,876  |  |  | 52,826  |  |
| 2026 to 2028 |  | 12,186  |  |  | —  |  |  | 12,560  |  |  | 24,746  |  |
| 2029 to 2031 |  | —  |  |  | 767  |  |  | 32,849  |  |  | 33,616  |  |
| 2032 to 2034 |  | 394  |  |  | 822  |  |  | —  |  |  | 1,216  |  |
| 2035 to 2037 |  | 6,739  |  |  | 2,491  |  |  | 3,838  |  |  | 13,068  |  |
| Thereafter |  | 437,683  |  |  | 80,613  |  |  | 488,897  |  |  | 1,007,193  |  |
|  |  | $ | 504,648  |  |  | $ | 84,805  |  |  | $ | 564,774  |  |  | $ | 1,154,227  |  |



|  |  |  |
| --- | --- | --- |
|  |  |  |
|  |

(1)The total amount of NOL carryforwards that will not be available to offset our future taxable income after the dividends paid deduction due to Section 382 limitations was $56.7 million for federal.(2)In certain jurisdictions, the net operating loss carryforwards can only be used to offset a percentage of taxable income in a given year. (3)If certain substantial changes in the entity's ownership occur or have determined to have occurred, there may be a limitation on the amount of the carryforwards that can be utilized.As of December 31, 2021, we had tax credit carryforwards of $7.2 million, which expire, if not utilized, from 2022 to 2031. We also had capital losses of $8.0 million, which can be carried forward indefinitely.The beginning and ending balances of our unrecognized tax benefits are reconciled below for the years ended December 31 (in thousands):

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | 2021 |  | 2020 |  | 2019 |
| Beginning balance | $ | 207,759  |  |  | $ | 173,726  |  |  | $ | 150,930  |  |
| Gross increases related to prior year tax positions | 4,547  |  |  | 14,732  |  |  | —  |  |
| Gross decreases related to prior year tax positions | (58,356) |  |  | —  |  |  | (1,160) |  |
| Gross increases related to current year tax positions | 10,000  |  |  | 29,149  |  |  | 31,332  |  |
| Decreases resulting from expiration of statute of limitation | (10,561) |  |  | (6,518) |  |  | (2,112) |  |
| Decreases resulting from settlements | (5,089) |  |  | (3,330) |  |  | (5,264) |  |
| Ending balance | $ | 148,300  |  |  | $ | 207,759  |  |  | $ | 173,726  |  |

We recognize interest and penalties related to unrecognized tax benefits within income tax expense in the consolidated statements of operations. We accrued $13.6 million, $21.3 million, and $14.2 million for interest and penalties as of December 31, 2021, 2020 and 2019, respectively.F-56  

