Income Taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

13.Income Taxes

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

	Successor									Predecessor
(dollars in millions)	Year Ended December 31, 2023			Year Ended December 31, 2022			September 8, 2021 to December 31, 2021			January 1, 2021 to September 7, 2021
Current:
Federal	$	—		$	—		$	—		$	—
State and local		0.5			0.6			(0.4	)		0.7
Foreign		6.0			6.4			1.6			3.1
Total current		6.5			7.0			1.2			3.8
Deferred:
Federal		(52.8	)		(37.9	)		(9.2	)		(16.1	)
State and local		(5.2	)		2.7			7.4			(3.8	)
Foreign		(1.7	)		(3.1	)		(0.7	)		(0.8	)
Total deferred		(59.7	)		(38.3	)		(2.5	)		(20.7	)
Valuation allowance		18.9			(3.8	)		(6.0	)		—
Total	$	(34.3	)	$	(35.1	)	$	(7.3	)	$	(16.9	)

The following is a reconciliation of the statutory federal income tax rate with the effective tax rate for each period:

	Successor									Predecessor
	Year Ended December 31, 2023			Year Ended December 31, 2022			September 8, 2021 to December 31, 2021			January 1, 2021 to September 7, 2021
U.S. federal statutory rate		21.0	%		21.0	%		21.0	%		21.0	%
State and local income taxes, net of federal income tax		3.2			3.1			2.1			2.5
Transaction costs		—			—			(0.4	)		(4.1	)
Non-Deductible meals and entertainment		(0.3	)		(0.3	)		(0.2	)		(0.3	)
State net operating loss adjustments		(1.4	)		(4.4	)		(18.4	)		—
Change in valuation allowance, net of federal income tax		(8.3	)		2.3			17.5			—
Change in uncertain tax positions		—			—			0.1			—
Research and development credits		1.4			—			—			—
Other differences, net		(0.5	)		(0.5	)		(0.4	)		(1.9	)
Effective tax rate		15.1	%		21.2	%		21.3	%		17.2	%

The income tax (benefit) provision was charged to continuing operations or accumulated other comprehensive income as follows:

	Successor									Predecessor
(dollars in millions)	Year Ended December 31, 2023			Year Ended December 31, 2022			September 8, 2021 to December 31, 2021			January 1, 2021 to September 7, 2021
Income tax (benefit) provision related to:
Continuing operations	$	(34.3	)	$	(35.1	)	$	(7.3	)	$	(16.9	)
Accumulated other comprehensive (loss) income		(0.7	)	7.6			0.8			10.8

The components of our deferred tax assets and liabilities were as follows:

	December 31,
(dollars in millions)	2023			2022
Deferred tax assets:
Net operating loss carryforwards	$	209.0		$	227.6
Finance and operating lease obligations		19.8			21.6
Pension and postretirement benefits		32.8			35.8
Employee benefits		3.9			4.7
Interest limitation		48.8			16.7
State tax credit		7.4			8.0
Other		30.8			23.4
Total deferred tax assets		352.5			337.8
Valuation allowance		(32.8	)		(15.7	)
Total deferred tax assets, net of valuation allowance	$	319.7		$	322.1
Deferred tax liabilities:
Property, plant and equipment and intangibles	$	(361.8	)	$	(410.5	)
Other		(9.3	)		(7.6	)
Total deferred tax liabilities		(371.1	)		(418.1	)
Net deferred tax liabilities	$	(51.4	)	$	(96.0	)

As of December 31, 2023, the Company had $897.1 million of federal net operating loss carryforwards with a deferred tax asset value of $188.4 million and $20.6 million in deferred tax assets related to state and local net operating loss carryforwards. On its 2022 income tax return filed in 2023, the Company utilized the $55.8 million tranche of Federal operating loss carryforwards that would have otherwise expired. The next remaining material tranche of Federal net operating loss carryforwards will expire in 2031. U.S. tax laws limit the annual utilization of net operating loss carryforwards of acquired entities, and the Company does not expect to fully utilize the net operating loss carryforwards.

The Company assessed all available positive and negative evidence to determine whether it expects that sufficient future taxable income will be generated to allow it to realize its existing deferred tax assets. There are no longer sufficient sources of future taxable income (e.g. reversing deferred tax liabilities) for management to conclude that it is more likely than not that the Company will fully utilize available federal net operating loss carryforwards prior to their expiration and a partial valuation allowance was added in 2023.

As of December 31, 2023 and 2022, the Company had valuation allowances of $32.8 million and $15.7 million, respectively, recorded against other deferred tax assets consisting primarily of federal, foreign, state and local net operating loss carryforwards and state credits. Management has concluded that it is more likely than not that it will realize all other deferred tax assets.

The total amount of unrecognized tax benefits that, if recognized, would impact the effective tax rate is $19.3 million at December 31, 2023 and $19.0 million at December 31, 2022. Accrued interest and penalties on income tax uncertainties were immaterial as of December 31, 2023 and 2022.

A reconciliation of the unrecognized tax benefits is as follows:

	Successor						Predecessor
(dollars in millions)	Year Ended December 31, 2023		Year Ended December 31, 2022		September 8, 2021 to December 31, 2021		January 1, 2021 to September 7, 2021
Balance, beginning of year	$	19.3	$	19.3	$	19.2	$	19.2
Change in tax positions for the current year		0.3		—		0.1		—
Balance, end of year	$	19.6	$	19.3	$	19.3	$	19.2

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and various foreign, state and local jurisdictions. With a few exceptions, the Company is no longer subject to U.S. federal, state or local examinations for years before 2019.

The Company has not recorded deferred income taxes on the undistributed earnings of its foreign subsidiaries because of management’s intent to indefinitely reinvest such earnings. Determination of the amount of any unrecognized deferred income tax liability on temporary differences arising from tax and financial reporting basis differences has not been practicable.