Income Taxes

12 Months Ended

Dec. 31, 2024

Income Taxes

Income Taxes

Note 8 — Income Taxes

We operate in multiple jurisdictions with complex tax laws subject to interpretation and judgment. We believe that our application of such laws and the tax impact thereof are reasonable and fairly presented in our consolidated financial statements.

Components of income tax provision (benefit) reflected in the consolidated statements of operations consist of the following (in thousands):

	Year Ended December 31,
	2024		2023		2022
Current tax provision (benefit):
Domestic	$	(97)	$	1,510	$	—
Foreign		15,918		5,310		8,217
Total current	$	15,821	$	6,820	$	8,217
Deferred tax provision (benefit):
Domestic	$	11,638	$	8,689	$	1,167
Foreign		(1,032)		2,843		3,219
Total deferred	$	10,606	$	11,532	$	4,386
Total income tax provision	$	26,427	$	18,352	$	12,603

Components of income (loss) before income taxes are as follows (in thousands):

	Year Ended December 31,
	2024		2023		2022
Domestic	$	(32,980)	$	(31,646)	$	(13,745)
Foreign		115,044		39,160		(61,436)
Income (loss) before income taxes	$	82,064	$	7,514	$	(75,181)

The primary differences between the income tax provision (benefit) at the U.S. statutory rate and our actual income tax provision (benefit) are as follows (dollars in thousands):

	Year Ended December 31,
	2024				2023				2022
Taxes at U.S. statutory rate	$	17,233	21.0	%	$	1,578	21.0	%	$	(15,788)	21.0	%
Foreign tax provision		7,944	9.7			1,590	21.2			18,011	(24.0)
Change in valuation allowance		(5,230)	(6.4)			6,374	84.8			8,110	(10.8)
Non-deductible expenses		3,105	3.8			2,926	38.9			2,366	(3.1)
Losses related to convertible senior notes (1)		4,078	5.0			6,372	84.8			—	—
Other		(703)	(0.9)			(488)	(6.5)			(96)	0.1
Income tax provision	$	26,427	32.2	%	$	18,352	244.2	%	$	12,603	(16.8)	%

(1) Relates to the non-deductibility for U.S. federal income tax purposes of certain charges associated with the 2026 Notes Repurchases and the 2026 Notes Redemptions (Note 7).

After applying the existing Pillar Two laws, we have no incremental Pillar Two taxes. Our income is subject to current taxation in the U.S. (21% statutory rate) and the U.K. (25% statutory rate), or subject to taxation in jurisdictions with statutory rates greater than the Pillar Two threshold of 15%. We will continue to monitor our income, attributes, and taxes by jurisdiction as well as the impact of new and proposed Pillar Two legislation.

For the year ended December 31, 2024, the valuation allowance decreased by $5.7 million, which included a $3.2 million decrease related to a valuation allowance release in Brazil, a $5.2 million increase in assessment on the realizability of U.S. group foreign tax credit carryforward, and a $7.7 million decrease in valuation allowance, which was predominantly driven by current year activity, including adjustments to prior year returns.

For the year ended December 31, 2023, the valuation allowance increased by $59.0 million, which included a $51.4 million increase for a change in assessment of our Luxembourg net operating losses, and a $7.6 million increase in valuation allowance, which was predominantly driven by current year activity, including adjustments to prior year returns.

For the year ended December 31, 2022, the $8.1 million increase in valuation allowance was predominantly driven by current year activity and the related change in unrealizable net deferred tax assets.

Deferred income taxes result from the effect of transactions that are recognized in different periods for financial and tax reporting purposes. The nature of these differences and the income tax effect of each are as follows (in thousands):

	December 31,
	2024		2023 (1)
Deferred tax liabilities:
Depreciation	$	126,218	$	132,178
Operating leases		77,773		38,579
Prepaid and other		14,090		13,105
Total deferred tax liabilities	$	218,081	$	183,862
Deferred tax assets:
Net operating losses	$	(71,244)	$	(78,250)
Operating leases		(77,773)		(38,579)
Asset retirement obligations		(13,219)		(12,885)
Reserves, accrued liabilities and other		(17,253)		(24,708)
Total deferred tax assets		(179,489)		(154,422)
Valuation allowance		75,381		81,115
Net deferred tax liabilities	$	113,973	$	110,555

(1) Amounts revised for an immaterial correction in the presentation of certain deferred taxes. There is no impact to the net deferred tax liabilities or consolidated financial statements.

At December 31, 2024, our U.S. tax attributes included $8.1 million in tax credits, which are subject to a full valuation allowance. Our non-U.S. net operating losses totaled $283.7 million, which included $228.7 million net operating losses in Luxembourg, and $55.0 million net operating losses in the U.K. and Brazil, which do not expire under local tax law.

We file tax returns in the U.S. and in various state, local and non-U.S. jurisdictions. We anticipate that any potential adjustments to our state, local and non-U.S. jurisdiction tax returns by taxing authorities would not have a material impact on our financial position. The tax periods from 2021 through 2024 are open to review and examination by the U.S. Internal Revenue Service. In non-U.S. jurisdictions, the open tax periods include 2020 through 2024.