The income tax provision is as follows:


	Successor									Predecessor
In thousands:	For the Year Ended December 31, 2023			For the Year Ended December 31, 2022			Period February 3, 2021 through December 31, 2021			Period January 1, 2021 through February 2, 2021
Current income tax expense/(benefit)
Federal	$	205		$	(50	)	$	(1,106	)	$	-
State		576			945			(307	)		-
Foreign		36,111			23,738			6,220			3,314
Total current income tax expense/(benefit)		36,892			24,633			4,807			3,314

Deferred income tax expense/(benefit)
Federal		44,712			(83,420	)		(42,904	)		55,015
State		(886	)		165			2,633			(182	)
Foreign		(20,977	)		(19,097	)		2,166			1,856
Total deferred income tax expense/(benefit)		22,849			(102,352	)		(38,105	)		56,689
Total income tax expense/(benefit)	$	59,741		$	(77,719	)	$	(33,298	)	$	60,003

Federal current and deferred tax primarily reflect use of NOL carryforwards. Foreign current tax is commensurate with prior year’s based on profitable operations in jurisdictions with limited annual or little NOL carryforwards and deferred benefit related to the release of valuation allowances on deferred tax assets in jurisdictions where there was positive evidence.

The Organization for Economic Co-operation and Development (“OECD”) reached agreement on Pillar Two Model Rules (“Pillar Two”) to implement a minimum 15% tax rate on certain multinational companies. Many countries are in the process of proposing and enacting tax laws to implement the Pillar Two framework. We continue to evaluate the impact of these proposals and legislative changes

as new guidance emerges. Due to the uncertainty regarding the timing and manner in which the separate jurisdictions in which we operate may adopt the Pillar Two rules, its impact is not currently estimable.

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, 2023			For the Year Ended December 31, 2022			Period February 3, 2021 through December 31, 2021			Period January 1, 2021 through February 2, 2021
Computed expected tax expense/(benefit)	$	49,211		$	44,798		$	(32,635	)	$	69,125
State and foreign income taxes		17,249			(350	)		(17,893	)		6,217
Foreign Tax Credit		(15,022	)		(5,161	)		-			-
Valuation allowance		(4,580	)		(13,140	)		-			(46,208	)
Release of unrecognized tax benefits		(9,897	)		-			-			-
Non-recurring non-deductible		3,498			-			-			-
Foreign income inclusion in US		10,270			-			-			-
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		6,781			(103,992	)		-			-
Other		2,231			126			(1,924	)		4,359
Total income tax expense/(benefit)	$	59,741		$	(77,719	)	$	(33,298	)	$	60,003

The effective tax rate in the Current Year is different from the U.S. federal statutory rate of 21.0% due to foreign income taxable in the U.S., a non-recurring non-deductible loss, and foreign tax rates that differ from the U.S. federal statutory rate. The effective tax rate in the Current Year was also impacted by the benefit of FTC generated in and carried over from 2023, and $9.9 million in income tax benefits from reversals of uncertain tax positions in foreign jurisdictions. Finally, the effective tax rate in the Current Year was impacted by adjustments to valuation allowances in the U.S. and foreign jurisdictions. We evaluate deferred tax assets, including tax credits and net operating losses, on a routine basis and this may result in the release of all or a portion of currently recorded valuation allowance when there is sufficient positive evidence.

Additionally, we identified an error in the tax provision for the year ended December 31, 2022 pertaining to certain net operating loss carryforwards that should have been eliminated as part of a worthless stock deduction taken in the fourth quarter of 2022. As such, we recognized an additional income tax expense of $7.6 million during the three months ended March 31, 2023, with a corresponding decrease to deferred tax assets, to correct this immaterial misstatement.

The effective tax rate for the Prior Year is different from the U.S. federal statutory rate of 21.0% primarily from a worthless stock deduction. Other impacts to the rate included non-deductible items, foreign tax rates that differ from the U.S. federal statutory rate, valuation allowance adjustments based on current period income in certain jurisdictions and foreign losses for which no tax benefit was being recorded.

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. We recognized cancellation of indebtedness income (“CODI”) upon discharge of our outstanding indebtedness. Due to bankruptcy, CODI was excluded from taxable income provided tax attributes were reduced by the amount of CODI realized. We realized CODI for U.S. federal income tax purposes of approximately $433.0 million resulting in a partial elimination of our federal net operating loss carryforwards, as well as a partial reduction in tax basis in assets. 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 under Section 382 relief provisions.

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


In thousands:	December 31, 2023			December 31, 2022
Deferred tax assets:
Allowance for doubtful accounts	$	1,159		$	1,374
U.S. operating loss and tax credit carryforwards		163,823			157,395
Compensation and employee benefits		6,843			7,376
Decommissioning liabilities		38,989			39,328
Goodwill and other intangible assets		63			369
Operating leases		147			126
Foreign deferred tax assets		45,003			38,780
Other assets		9,779			13,565
Total gross deferred tax assets		265,806			258,313
Less: Valuation allowance		(132,031	)		(80,280	)
Total deferred tax assets	$	133,775		$	178,033

Deferred tax liabilities:
Property, plant and equipment	$	53,613		$	64,571
Notes receivable		17,659			17,812
Other Liability		1,399			1,546
Total deferred tax liabilities	$	72,671		$	83,929

Net deferred tax assets (liabilities)	$	61,104		$	94,104

The Balance Sheet classification is based on a jurisdictional grouping:
Deferred tax assets		67,241			97,492
Less: Deferred tax liabilities (included in Other liabilities)		(6,137	)		(3,388	)
Total deferred tax assets and liabilities	$	61,104		$	94,104

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. During 2022, we determined there was enough positive evidence to realize a portion of the tax benefit related to FTC carryforwards. This is due to a pattern of sustained profitability in the U.S. since we emerged from bankruptcy and capacity of relief under Section 382. At December 31, 2023, we had a FTC carryforward of $77.6 million with expiration dates from 2024 to 2033. There is a partial valuation allowance of $50 million against the FTC carryforward at year end 2023 which will more-likely-than-not expire before being utilized. We will continue to evaluate the realizability of FTCs in future years.

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, 2023 is $90.0 million, which have an indefinite carryforward but are limited to offsetting 80% of taxable income each year. At December 31, 2023, we also had state net operating losses net deferred tax asset of $16.9 million offset by a full valuation allowance.

We have not provided additional US income tax expense on foreign earnings of foreign affiliates. 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 2019.

The activity in unrecognized tax benefits is as follows:


	Successor									Predecessor
In thousands:	For the Year Ended December 31, 2023			For the Year Ended December 31, 2022			Period February 3, 2021 through December 31, 2021			Period January 1, 2021 through February 2, 2021
Unrecognized tax benefits at beginning of period	$	14,009		$	14,973		$	14,706		$	13,206
Additions based on tax positions related to prior years		55			569			2,848			1,500
Reductions based on tax positions related to prior years		(75	)		(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		(9,765	)		-			-			-
Reductions relating to settlements with taxing authorities		(112	)		(1,277	)		(2,029	)		-
Unrecognized tax benefits at end of period	$	4,112		$	14,009		$	14,973		$	14,706

We had unrecognized tax benefits of $4.1 million as of December 31, 2023, $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 $0.9 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. It is our policy to recognize interest and applicable penalties, if any, related to uncertain tax positions in income tax expense. The amounts in the tabular reconciliation above include accrued interest and penalties of $1.9 million, $7.2 million and $6.9 million for periods ended December 31, 2023, 2022 and 2021, respectively.