Income Taxes

12 Months Ended

Dec. 31, 2022

Income Taxes

Income Taxes

Note 11 Income Taxes

Income (loss) from continuing operations before income taxes consisted of the following:

	Year Ended December 31,
United States and Other Jurisdictions	2022		2021		2020
	(In thousands)
United States	$	(19,820)	$	(153,243)	$	(182,706)
Other jurisdictions		(225,862)		(334,846)		(522,861)
Income (loss) from continuing operations before income taxes	$	(245,682)	$	(488,089)	$	(705,567)

Income tax expense (benefit) from continuing operations consisted of the following:

	Year Ended December 31,
	2022		2021		2020
	(In thousands)
Current:
U.S. federal	$	1,320	$	(1,905)	$	(39,268)
Outside the U.S.		48,837		60,318		33,858
State		4,042		7,914		(2,020)
	$	54,199	$	66,327	$	(7,430)
Deferred:
U.S. federal	$	681	$	(4,669)	$	67,909
Outside the U.S.		(241)		(3,608)		(4,992)
State		6,897		(2,429)		1,799
	$	7,337	$	(10,706)	$	64,716
Income tax expense (benefit)	$	61,536	$	55,621	$	57,286

A reconciliation of our statutory tax rate to our worldwide effective tax rate consists of the following:

	Year Ended December 31,
	2022		2021		2020
	(In thousands)
Income tax provision at statutory (Bermuda rate of 0%)	$	—	$	—	$	—
Taxes (benefit) on U.S. and other international earnings (losses) at greater than the Bermuda rate		25,685		23,395		62,751
Increase (decrease) in valuation allowance		43,060		8,276		(9,759)
Impact of foreign exchange rates		(32,108)		—		—
Prior year adjustments to provision		15,959		—		—
Tax reserves and interest		2,080		26,266		861
State income taxes (benefit)		266		(2,316)		3,433
Other		6,594		—		—
Income tax expense (benefit)	$	61,536	$	55,621	$	57,286
Effective tax rate		(25.0%)		(11.4%)		(8.1%)

Our worldwide income tax expense for 2022 was $61.5 million compared to $55.6 million for 2021. The increase in tax expense was primarily attributable to changes in the operating income and the geographic mix of our pre-tax earnings (losses) in the jurisdictions in which we operate, partially offset by tax expense recorded in 2021 attributable to a liability for uncertain tax positions of $26.3 million.

The components of our net deferred taxes consisted of the following:

	December 31,
	2022		2021
	(In thousands)
Deferred tax assets:
Net operating loss carryforwards	$	3,878,344	$	3,676,333
Tax credit and other attribute carryforwards		84,812		84,624
Accrued interest		13,302		—
Depreciation and amortization for tax in excess of book expense		20,431		118,151
Other		100,316		135,729
Subtotal		4,097,205		4,014,837
Valuation allowance		(3,839,885)		(3,754,207)
Deferred tax assets:	$	257,320	$	260,630
Deferred tax liabilities:
Other	$	2,858	$	4,772
Deferred tax liability	$	2,858	$	4,772
Net deferred tax assets (liabilities)	$	254,462	$	255,858
Balance Sheet Summary:
Net noncurrent deferred tax asset	$	257,320	$	258,631
Net noncurrent deferred tax liability		(2,858)		(2,773)
Net deferred tax asset (liability)	$	254,462	$	255,858

As of December 31, 2022, we had federal, state, and foreign net operating loss (“NOL”) carryforwards of approximately $727.1 million, $820.3 million and $14.9 billion, respectively. Of those amounts, $8.0 billion will expire between 2023 and 2042 if not utilized. We provide a valuation allowance against NOL carryforwards in various tax jurisdictions based on our consideration of existing temporary differences and expected future earning levels in those jurisdictions. A valuation allowance of approximately $3.5 billion as of December 31, 2022 has been recognized related to certain NOL carryforwards as we believe it is more likely than not that the benefit of these NOL carryforwards will not be realized.

The following is a reconciliation of our uncertain tax positions:

	2022		2021		2020
	(In thousands)
Balance as of January 1	$	45,988	$	26,704	$	25,770
Additions for tax positions of prior years		806		19,760		1,887
Reductions for tax positions for prior years		(1,342)		(476)		(953)
Balance as of December 31	$	45,452	$	45,988	$	26,704

If the unrecognized tax benefits of $45.5 million are realized, this would favorably impact the worldwide effective tax rate. As of December 31, 2022, 2021 and 2020, we had approximately $17.0 million, $14.4 million and $7.6 million, respectively, of interest and penalties related to uncertain tax positions. During 2022, 2021 and 2020, we accrued and recognized estimated interest and penalties related to uncertain tax positions of approximately $2.6 million, $6.9 million and ($0.6) million, respectively. We include potential interest and penalties related to uncertain tax positions within our global operations in the income tax expense (benefit) line item in our consolidated statements of income (loss).

It is reasonably possible that our existing liabilities related to our reserve for uncertain tax positions may increase or decrease in the next twelve months primarily due to the completion of open audits or the expiration of statutes of limitation. However, we cannot reasonably estimate a range of changes in our existing liabilities due to various uncertainties, such as the unresolved nature of various audits.

We conduct business globally and, as a result, we file numerous income tax returns in the U.S. and non-U.S. jurisdictions. In the normal course of business we are subject to examination by taxing authorities throughout the world, including major jurisdictions such as Colombia, Mexico, Saudi Arabia, Norway and the United States. We are no longer subject to U.S. Federal income tax examinations for years before 2019 and non-U.S. income tax examinations for years before 2007.