The income tax provision is as follows:


	Successor						Predecessor
In thousands:	For the Year Ended December 31, 2022			Period February 3, 2021 through December 31, 2021			Period January 1, 2021 through February 2, 2021			For the Year Ended December 31, 2020
Current income tax expense/(benefit)
Federal	$	(50	)	$	(1,106	)	$	-		$	(36,506	)
State		945			(307	)		-			635
Foreign		23,738			6,220			3,314			8,497
Total current income tax expense/(benefit)		24,633			4,807			3,314			(27,374	)

Deferred income tax expense/(benefit)
Federal		(83,420	)		(42,904	)		55,015			4,593
State		165			2,633			(182	)		(638	)
Foreign		(19,097	)		2,166			1,856			(3,469	)
Total deferred income tax expense/(benefit)		(102,352	)		(38,105	)		56,689			486
Total income tax expense/(benefit)	$	(77,719	)	$	(33,298	)	$	60,003		$	(26,888	)

For the year ended December 31, 2022, we recognized a worthless stock deduction in the U.S. related to deductible outside basis differences in certain domestic subsidiaries, which is the primary driver of the increase in federal deferred tax. We executed a transaction through which a worthless stock deduction of approximately $495.2 million was deducted for income tax purposes resulting in an estimated net tax benefit of $104.0 million. Consistent with our policy, we evaluated the deduction and believe it will more likely than not be sustained on its technical merits and have recognized its benefits accordingly.

During the Current Period, U.S. rental income and foreign tax from foreign jurisdictions increased. Additionally, income in a few of our foreign operations improved. In these jurisdictions, namely Brazil, we benefitted from the release of a valuation allowance due to a pattern of sustained profitability such that it is viewed as more likely than not that the deferred income tax assets will be realized.

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.

Effective in tax year 2022, the Tax Cuts and Jobs Act of 2017 eliminates the option to deduct research and development expenditures in the current period and requires taxpayers to capitalize and amortize them over five or fifteen years pursuant to Internal Revenue Code Section 174. The legislation did not have a material impact in our business, operating results, and financial condition

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


	Successor						Predecessor
Continuing Operations (in thousands):	For the Year Ended December 31, 2022			Period February 3, 2021 through December 31, 2021			Period January 1, 2021 through February 2, 2021			For the Year Ended December 31, 2020
Computed expected tax expense/(benefit)	$	44,798		$	(32,635	)	$	69,125		$	(53,431	)
State and foreign income taxes		(350	)		(17,893	)		6,217			5,026
Valuation allowance		(13,140	)		-			(46,208	)		19,024
Gain on Settlement of Liabilities Subject to Compromise					-			(89,905	)		-
Reduction in Deferred Tax Assets					19,154			87,316			-
Fresh Start Adjustments					-			29,099			-
Worthless stock deduction		(103,992	)		-			-			-
Foreign Tax Credit		(5,161	)		-			-			-
Other		126			(1,924	)		4,359			2,493
Total income tax expense/(benefit)	$	(77,719	)	$	(33,298	)	$	60,003		$	(26,888	)

For the year ended December 31, 2022, the total tax provision differs from the tax computed using the standard tax rate primarily due to the worthless stock deduction of $104.0 million previously discussed. In addition, due to increased profitability, we released several valuation allowances including a $14.5 million related our U.S. foreign tax credit (“FTC”) carryforward and $8.7 million related to Brazil deferred tax assets primarily consisting of NOL carryforward.

For the year ended December 31, 2021, we 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 $433.0 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. Currently, we do not expect the Section 382 limitation to impact our ability to use U.S. NOLs and FTC carryover tax attributes due to qualification for relief under Section 382.

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


In thousands:	December 31, 2022			December 31, 2021
Deferred tax assets:
Allowance for doubtful accounts	$	1,374		$	1,046
Operating loss and tax credit carryforwards		157,395			84,684
Compensation and employee benefits		7,376			8,832
Decommissioning liabilities		39,328			39,328
Goodwill and other intangible assets		369			772
Operating leases		126			197
Other Asset		52,345			30,749
Total gross deferred tax assets		258,313			165,608
Less: Valuation allowance		(80,280	)		(90,781	)
Total deferred tax assets	$	178,033			74,827

Deferred tax liabilities:
Property, plant and equipment	$	64,571		$	64,721
Notes receivable		17,812			17,812
Other Liability		1,546			1,287
Total deferred tax liabilities	$	83,929		$	83,820

Net deferred tax assets (liabilities)	$	94,104		$	(8,993	)

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.

The ultimate realization of deferred tax assets for the U.S. FTC carryovers is dependent on the generation of future taxable income of the appropriate character during the FTC carryforward period. We previously considered FTC credit carryforwards to be unrealizable primarily due to our cumulative history of losses in the U.S. and Sec. 382 tax attribute utilization limits resulting from bankruptcy. During 2022, we determined there is now enough positive evidence to realize a portion of the tax benefit related to U.S. FTC carryforwards. This is due to a pattern of sustained profitability in the U.S. since we emerged from bankruptcy and capacity relief under Section 382. The amount of valuation allowance released recognizes the FTC deferred tax assets we estimate will offset U.S. taxes in the next 2-3 years before expiration. We have $40.0 million of U.S. FTC deferred tax assets that continue to have a valuation allowance against them, including $5.2 million in 2022 FTCs that carryforward up to 10 years. We will continue to evaluate the realizability of U.S. FTCs in future years.

A valuation allowance has been placed on the state net operating losses. Similarly, with the exception of Brazil, the deferred tax assets on the majority of our foreign operation jurisdictions continue to require a valuation allowance.

The amount of our net deferred tax assets considered realizable could be adjusted if projections of future taxable income are reduced or objective negative evidence in the form of a three-year cumulative loss is present or both. Should we no longer have a level of sustained profitability, excluding non-recurring charges, we will have to rely more on our future projections of taxable income to determine if we have an adequate source of taxable income for the realization of our deferred tax assets, namely NOL, interest limitation, and tax credit carryforwards. This may result in the need to record a valuation allowance against all or a portion of our deferred tax assets.

The amount of U.S. consolidated net operating losses available as of December 31, 2022, after attribute reduction, is estimated to be approximately $367.9 million, which are available to reduce future taxable income, of which $20.4 million have a 20-year carryforward period and expire after 2036 and $347.5 million have an indefinite carryforward but are limited to offsetting 80% of taxable income each year. At December 31, 2022, we also had various state net operating loss carryforwards with expiration dates starting in 2022. The state net operating losses net deferred tax asset of $19.6 million has a full valuation allowance. At December 31, 2022, we also had a U.S. foreign tax credit carryforward of $59.7 million with expiration dates from 2024 to 2032. A partial valuation

allowance was setup against the foreign tax credit carryforward in the amount of $40.0 million, which will more-likely-than-not expire before being utilized.

We have not provided additional US income tax expense on foreign earnings of foreign affiliates. At December 31, 2022 our foreign subsidiaries had an overall accumulated deficit in earnings. We are repatriating from foreign subsidiaries and the distributions are not subject to incremental US taxation because they represent either 1) return of basis where there is not current or accumulated earnings and profits, 2) previously taxed earnings and profits or 3) foreign earnings exempt from incremental US tax. We file income tax returns 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 2018.

The activity in unrecognized tax benefits is as follows:


	Successor						Predecessor
In thousands:	For the Year Ended December 31, 2022			Period February 3, 2021 through December 31, 2021			Period January 1, 2021 through February 2, 2021		For the Year Ended December 31, 2020
Unrecognized tax benefits at beginning of period	$	14,973		$	14,706		$	13,206	$	13,206
Additions based on tax positions related to prior years		569			2,848			1,500		1,757
Reductions based on tax positions related to prior years		(334	)		(552	)		-		-
Additions based on tax positions related to current year		78			-			-		-
Reductions as a result of a lapse of the applicable statute of limitations		-			-			-		(757	)
Reductions relating to settlements with taxing authorities		(1,277	)		(2,029	)		-		(1,000	)
Unrecognized tax benefits at end of period	$	14,009		$	14,973		$	14,706	$	13,206

We had unrecognized tax benefits of $14.0 million as of December 31, 2022, and $15.0 million as of December 31, 2021, all of which would impact our effective tax rate if recognized. It is reasonably possible that $9.7 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. It is our policy to recognize interest and applicable penalties, if any, related to uncertain tax positions in income tax expense.

The amounts above includes accrued interest and penalties of $7.2 million and $6.9 million for periods ended December 31, 2022 and 2021, respectively.