Income Taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

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,
	2023		2022		2021
Current tax provision (benefit):
Domestic	$	1,510	$	—	$	(1,103)
Foreign		5,310		8,217		7,347
Total current	$	6,820	$	8,217	$	6,244
Deferred tax provision (benefit):
Domestic	$	8,689	$	1,167	$	(5,756)
Foreign		2,843		3,219		(9,446)
Total deferred	$	11,532	$	4,386	$	(15,202)
Total income tax provision (benefit)	$	18,352	$	12,603	$	(8,958)

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

	Year Ended December 31,
	2023		2022		2021
Domestic	$	(31,646)	$	(13,745)	$	(53,989)
Foreign		39,160		(61,436)		(16,653)
Income (loss) before income taxes	$	7,514	$	(75,181)	$	(70,642)

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,
	2023				2022				2021
Taxes at U.S. statutory rate	$	1,578	21.0	%	$	(15,788)	21.0	%	$	(14,835)	21.0	%
Foreign tax provision		1,590	21.2			18,011	(24.0)			10,326	(14.6)
Change in valuation allowance		6,374	84.8			8,110	(10.8)			(5,675)	8.0
Non-deductible expenses		2,926	38.9			2,366	(3.1)			1,487	(2.1)
Extinguishment of long-term debt (1)		6,372	84.8			—	—			—	—
Other		(488)	(6.5)			(96)	0.1			(261)	0.4
Income tax provision (benefit)	$	18,352	244.2	%	$	12,603	(16.8)	%	$	(8,958)	12.7	%

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

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. Due to changes in the Luxembourg taxation of our Brazilian operations during the year, the assessment on the realizability of our Luxembourg net operating losses changed from remote to not more likely than not. Therefore, a deferred tax asset and corresponding valuation allowance have been recorded accordingly.

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.

During the year ended December 31, 2021, we released a non-U.S. valuation allowance of $5.0 million for deferred tax assets as it is more likely than not that they will be fully utilized.

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,
	2023		2022
Deferred tax liabilities:
Depreciation	$	132,178	$	147,302
Prepaid and other		1,560		1,868
Total deferred tax liabilities	$	133,738	$	149,170
Deferred tax assets:
Net operating losses	$	(78,250)	$	(53,136)
Reserves, accrued liabilities and other		(26,048)		(19,308)
Total deferred tax assets		(104,298)		(72,444)
Valuation allowance		81,115		22,157
Net deferred tax liabilities	$	110,555	$	98,883

At December 31, 2023, our U.S. tax attributes included $35.6 million of net operating losses, which do not expire, and $3.0 million in tax credits, which are subject to a full valuation allowance. At December 31, 2023, our non-U.S. net operating losses totaled $280.6 million, which included $217.5 million net operating losses in Luxembourg, and $63.1 million net operating losses in U.K. and Brazil, which do not expire under local tax law.

At December 31, 2023, we had accumulated undistributed earnings generated by our non-U.S. subsidiaries of approximately $79.1 million. With the enactment of the U.S. Tax Cuts and Jobs Act in 2017, repatriations of foreign earnings are generally free of U.S. federal income taxation.

For the year ended December 31, 2023, we released our remaining reserve for uncertain tax positions of $0.1 million, which related to a research and development credit taken on our 2019 U.S. Federal Income Tax Return.

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 2020 through 2023 are open to review and examination by the U.S. Internal Revenue Service. In non-U.S. jurisdictions, the open tax periods include 2019 through 2023.