The income tax provision is as follows:


	Successor			Predecessor
In thousands:	Period February 3, 2021 through December 31, 2021			Period January 1, 2021 through February 2, 2021			For the Year Ended December 31, 2020			For the Year Ended December 31, 2019
Current income tax expense/(benefit)
Federal	$	(1,106	)	$	-		$	(36,506	)	$	-
State		(307	)		-			635			546
Foreign		6,220			3,314			8,497			(3,359	)
Total current income tax expense/(benefit)		4,807			3,314			(27,374	)		(2,813	)

Deferred income tax expense/(benefit)
Federal		(42,904	)		55,015			4,593			10,175
State		2,633			(182	)		(638	)		1,623
Foreign		2,166			1,856			(3,469	)		(6,252	)
Total deferred income tax expense/(benefit)		(38,105	)		56,689			486			5,546
Total income tax expense/(benefit)	$	(33,298	)	$	60,003		$	(26,888	)	$	2,733

On March 27, 2020, the President signed the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act), a tax relief and spending package intended to provide economic stimulus to address the impact of the COVID-19 pandemic. The CARES Act allows corporations with net operating losses generated in 2018, 2019 and 2020 to elect to carryback those losses for a period of five years and relaxes the limitation for business interest deductions for 2019 and 2020. Under the provisions of the CARES Act, we received a refund

of $30.5 million in July 2020 related to the carryback of the 2018 net operating loss and received a refund of $8.2 million in February 2021 related to the carryback of the 2019 net operating loss.

A reconciliation of the U.S. statutory federal tax rate to the consolidated effective tax rate is as follows:


	Successor			Predecessor
In thousands:	Period February 3, 2021 through December 31, 2021			Period January 1, 2021 through February 2, 2021			For the Year Ended December 31, 2020			For the Year Ended December 31, 2019
Computed expected tax expense/(benefit)	$	(32,635	)	$	69,125		$	(53,431	)	$	(18,380	)
State and foreign income taxes		(17,893	)		6,217			5,026			(7,444	)
Valuation allowance		-			(46,208	)		19,024			24,638
Gain on Settlement of Liabilities Subject to Compromise		-			(89,905	)		-			-
Reduction in Deferred Tax Assets		19,154			87,316			-			(233	)
Fresh Start Adjustments		-			29,099			-			-
Other		(1,924	)		4,359			2,493			4,152
Total income tax expense/(benefit)	$	(33,298	)	$	60,003		$	(26,888	)	$	2,733

We have evaluated the tax impact resulting from our emergence from Chapter 11 Bankruptcy on February 2, 2021 and the Plan. As part of the debt restructuring, a substantial portion of our pre-petition debt was extinguished. Absent an exception, a taxpayer recognizes cancellation of indebtedness income (“CODI”) upon discharge of its outstanding indebtedness for an amount of consideration that is less than its adjusted issue price. A taxpayer in bankruptcy may exclude CODI from taxable income but must first reduce its tax attributes by the amount of CODI realized. When the debt was extinguished, we realized CODI for U.S. federal income tax purposes of approximately $428 million. The CODI exclusion resulted in a partial elimination of our federal net operating loss carryforwards, as well as a partial reduction in tax basis in assets, primarily property, plant and equipment. The CODI also eliminated $19.2 million of state NOL deferred tax asset which resulted in a corresponding reduction in the state valuation allowance.

Section 382 of the Internal Revenue Code of 1986 provides an annual limitation with respect to the ability of a corporation to utilize its tax attributes, as well as certain built-in-losses, against future U.S. taxable income in the event of a change in ownership. We experienced an ownership change on February 2, 2021, as defined in Section 382, due to the Plan. The limitation under Section 382 is based on the value of the corporation as of the Emergence Date. We do not expect the Section 382 limitation to impact our ability to use U.S. tax attributes other than foreign tax credits.

Significant components of our deferred tax assets and liabilities are as follows:


	Successor			Predecessor
In thousands:	December 31, 2021			December 31, 2020
Deferred tax assets:
Allowance for doubtful accounts	$	1,046		$	1,713
Operating loss and tax credit carryforwards		84,684			150,426
Compensation and employee benefits		8,832			27,625
Decommissioning liabilities		39,328			30,960
Operating leases		197			2,792
Other assets		30,749			34,578
Total gross deferred tax assets		164,836			248,094
Less: Valuation allowance		(90,781	)		(139,106	)
Total deferred tax assets		74,055			108,988

Deferred tax liabilities:
Property, plant and equipment		64,721			69,510
Notes receivable		17,812			12,977
Goodwill and other intangible assets		(772	)		23,920
Other liabilities		1,287			7,869
Total deferred tax liabilities		83,048			114,276
Net deferred tax liabilities	$	8,993		$	5,288

Deferred tax assets and liabilities are recognized for the estimated future tax effects of temporary differences between the tax basis of an asset or liability and its reported amount in the consolidated financial statements. The measurement of deferred tax assets and liabilities is based on enacted tax laws and rates currently in effect in each of the jurisdictions in which we have operations. In recording deferred income tax assets, we consider whether it is more likely than not that some portion or all of the deferred income tax assets will be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income of the appropriate character during the periods in which those deferred income tax assets would be deductible. We consider all available positive and negative evidence, including scheduled reversal of deferred income tax liabilities, projected future taxable income,

tax-planning strategies, and results of recent operations for this determination. Due to the history of losses in recent years, we are not relying on any projected future taxable income for this analysis. We are in a net deferred tax liability position as of December 31, 2021 in the U.S., and the reversal of the deferred tax liability is expected to offset the reversal of U.S. deferred tax assets in the future periods. Thus, management believes that it is more likely than not that U.S. federal deferred tax assets, with the exception of certain credits, will be realized. Management determined that sufficient positive evidence does not exist to realize deferred tax assets for certain U.S. federal credits, certain U.S. state tax attributes, and for deferred tax assets in the majority of our foreign operations.

The amount of U.S. consolidated net operating losses available as of December 31, 2021, after attribute reduction, is estimated to be approximately $43.3 million, which are available to reduce future taxable income. These losses have an indefinite carryforward but are limited to offsetting 80% of taxable income each year. At December 31, 2021, we also had various state net operating loss carryforwards with expiration dates starting in 2022. A net deferred tax asset of $18.8 million reflects the expected future tax benefit for the state loss carryforwards. At December 31, 2021, we also had a U.S. foreign tax credit carryforward of $55.9 million with expiration dates from 2025 to 2027.

We have not provided income tax expense on earnings of our foreign subsidiaries, since we have reinvested or expect to reinvest undistributed earnings outside the U.S. indefinitely. At December 31, 2021, our foreign subsidiaries had an overall accumulated deficit in earnings. We do not intend to repatriate the earnings of our profitable foreign subsidiaries. We have not provided U.S. income taxes for such earnings. These earnings could become subject to U.S. income tax, state and foreign taxes if repatriated. It is not practicable to estimate the amount of taxes that might be payable on such undistributed earnings.

We file income tax return in the U.S., including federal and various state filings, and certain foreign jurisdictions. The number of years that are open under the statute of limitations and subject to audit varies depending on the tax jurisdiction. We remain subject to U.S. federal tax examinations for years after 2017.

The activity in unrecognized tax benefits is as follows:


	Successor			Predecessor
In thousands:	Period February 3, 2021 through December 31, 2021			Period January 1, 2021 through February 2, 2021		For the Year Ended December 31, 2020			For the Year Ended December 31, 2019
Unrecognized tax benefits at beginning of period	$	14,706		$	13,206	$	13,206		$	30,558
Additions based on tax positions related to prior years		2,848			1,500		1,757			2,500
Reductions based on tax positions related to prior years		(552	)		-		-			-
Additions based on tax positions related to current year		-			-		-			-
Reductions as a result of a lapse of the applicable statute of limitations		-			-		(757	)		-
Reductions relating to settlements with taxing authorities		(2,029	)		-		(1,000	)		(19,852	)
Unrecognized tax benefits at end of period	$	14,973		$	14,706	$	13,206		$	13,206

We had unrecognized tax benefits of $15.0 million, $13.2 million and $13.2 million as of December 31, 2021, 2020 and 2019, respectively, all of which would impact our effective tax rate if recognized. It is reasonably possible that $2.9 million of unrecognized tax benefits could be settled in the next twelve-month period due to the conclusion of tax audits or due to the expiration of statute of limitations.

The amounts above include accrued interest and penalties of $6.9 million, $5.8 million and $5.0 million for the years ended December 31, 2021, 2020 and 2019, respectively. During the year ended December 31, 2019, we recorded a reduction in unrecognized tax benefits of $19.9 million relating to settlements of income tax audits in foreign countries. Interest and penalties associated with the unrecognized tax benefits are classified as a component of income tax expense in the consolidated statements of operations.