Income Taxes

12 Months Ended

Dec. 31, 2024

Income Taxes

Income Taxes

Note 10 Income Taxes

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

	Year Ended December 31,
United States and Other Jurisdictions	2024		2023		2022
	(In thousands)
United States	$	33,302	$	215,306	$	(19,820)
Other jurisdictions		(64,342)		(86,182)		(225,862)
Income (loss) from continuing operations before income taxes	$	(31,040)	$	129,124	$	(245,682)

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

	Year Ended December 31,
	2024		2023		2022
	(In thousands)
Current:
U.S. federal	$	1,175	$	4,783	$	1,320
Outside the U.S.		32,326		55,769		48,837
State		1,762		2,787		4,042
	$	35,263	$	63,339	$	54,199
Deferred:
U.S. federal	$	6,408	$	16,886	$	681
Outside the U.S.		13,854		(1,898)		(241)
State		1,422		893		6,897
	$	21,684	$	15,881	$	7,337
Income tax expense (benefit)	$	56,947	$	79,220	$	61,536

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

	Year Ended December 31,
	2024		2023		2022
	(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		51,433		74,581		25,685
Increase (decrease) in valuation allowance		10,094		22,533		43,060
Impact of foreign exchange rates		(9,145)		(28,484)		(32,108)
Prior year adjustments to provision		2,540		(3,513)		15,959
Uncertain tax positions		(1,828)		5,854		2,080
Audit settlements		(646)		12,464		—
State income taxes (benefit)		1,698		3,838		266
Other		2,801		(8,053)		6,594
Income tax expense (benefit)	$	56,947	$	79,220	$	61,536
Effective tax rate		(183.5%)		61.4%		(25.0%)

Our worldwide income tax expense for 2024 was $56.9 million compared to $79.2 million for 2023. The decrease in tax expense was primarily attributable to tax expense of $11.8 million in 2023 related to an audit settlement as well as changes in the amount and the geographic mix of our pre-tax earnings (losses) in the jurisdictions in which we operate.

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

	December 31,
	2024		2023
	(In thousands)
Deferred tax assets:
Net operating loss carryforwards	$	3,870,614	$	4,004,602
Tax credit and other attribute carryforwards		86,188		86,896
Disallowed interest carryforward		33,907		19,311
Other		88,644		106,520
Subtotal		4,079,353		4,217,329
Valuation allowance		(3,825,551)		(3,962,200)
Deferred tax assets:	$	253,802	$	255,129
Deferred tax liabilities:
Property, plant and equipment	$	34,089	$	15,181
Other		5,903		2,443
Deferred tax liability	$	39,992	$	17,624
Net deferred tax assets (liabilities)	$	213,810	$	237,505
Balance Sheet Summary:
Net noncurrent deferred tax asset	$	216,296	$	238,871
Net noncurrent deferred tax liability		(2,486)		(1,366)
Net deferred tax asset (liability)	$	213,810	$	237,505

As of December 31, 2024, we had federal, state, and foreign net operating loss (“NOL”) carryforwards of approximately $599.5 million, $792.4 million and $16.3 billion, respectively. Of those amounts, $7.9 billion will expire between 2025 and 2045 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 $3.8 billion as of December 31, 2024 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:

	2024		2023		2022
	(In thousands)
Balance as of January 1	$	34,016	$	45,452	$	45,988
Additions for tax positions of prior years		322		2,207		806
Reductions for tax positions for prior years		(1,046)		(256)		(1,342)
Settlements		(9,968)		(13,387)		—
Balance as of December 31	$	23,324	$	34,016	$	45,452

If the unrecognized tax benefits of $23.3 million are realized, this would favorably impact the worldwide effective tax rate. As of December 31, 2024, 2023 and 2022, we had approximately $8.2 million, $11.1 million and $17.0 million, respectively, of interest and penalties related to uncertain tax positions. During 2024, 2023 and 2022, we accrued and recognized estimated interest and penalties related to uncertain tax positions of approximately $(2.9) million, $(6.0) million and $2.6 million, respectively. During the first quarter of 2024, we settled tax audits for which we had accrued an uncertain tax position of $10.0 million and interest and penalties of $1.8 million. Upon settlement, we reversed the uncertain tax position accrual and related interest and penalties. 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, and the United States. We are no longer subject to U.S. Federal income tax examinations for years before 2021 and non-U.S. income tax examinations for years before 2007.

On August 16, 2022, the Inflation Reduction Act (“IRA”) was signed into law in the United States. Among other provisions, the IRA includes a 15% corporate minimum tax rate applied to certain large corporations and a 1% excise tax on corporate stock repurchases made after December 31, 2022. We do not expect the IRA to have a material impact to the Company.

The Organization Economic Co-operation and Development (“OECD”) introduced Base Erosion and Profit Shifting (“BEPS”) Pillar 2 rules that impose a global minimum tax rate of 15%. Numerous countries, including European Union member states, have enacted or are expected to enact legislation to be effective as early as January 1, 2024, with general implementation of a global minimum tax by January 1, 2025. Pillar 2 did not have a material impact to our consolidated financial statements for the year ended December 31, 2024.

On December 18, 2023, Bermuda enacted a 15% corporate income tax regime (the “Bermuda CIT”) that applies to Bermuda businesses that are part of multinational enterprise groups with annual revenue of €750 million or more and is effective for tax years beginning on or after January 1, 2025. As a result of the Bermuda CIT, the Company’s exemption from Bermuda corporate income taxes will cease in 2025. With the enactment of the Bermuda CIT in 2023, the Company underwent an analysis to determine the tax impacts to its consolidated financial statements. Bermuda CIT allows for a beginning net operating loss balance related to the five years preceding the effective date of Bermuda CIT. As of December 31, 2024, we have recorded a deferred tax asset of $206.9 million for the Bermuda net operating losses generated from 2020 through 2024 with an offsetting valuation allowance of $206.9 million.