Income Taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

14. Income Taxes

Income before income taxes for the United States for the year ended December 31, 2023 was $315 million. Income before income taxes for the United States for the year ended December 31, 2022 was $166 million. Loss before income taxes for the United States for the year ended December 31, 2021 was $721 million. Loss before income taxes for non-U.S. jurisdictions for the year ended December 31, 2023 was $8.8 million. Income before income taxes for non-U.S. jurisdictions for the years ended December 31, 2022 and 2021 was $2 million and $0.9 million, respectively.

Components of the income tax provision applicable to federal, state and foreign income taxes for the years ended December 31, 2023, 2022 and 2021 are as follows (in thousands):
 

	2023		2022			2021
Federal income tax expense (benefit):
Current	$	—	$	480		$	—
Deferred		44,369		11,820			(86,878	)
		44,369		12,300			(86,878	)
State income tax expense (benefit):
Current		7,002		2,647			144
Deferred		11,279		(4,896	)		23,028
		18,281		(2,249	)		23,172

Foreign income tax expense (benefit):
Current		1,578			2,750		134
Deferred		(3,076	)		403		870
		(1,498	)		3,153		1,004
Total income tax expense (benefit):
Current		8,580			5,877		278
Deferred		52,572			7,327		(62,980	)
Total income tax expense (benefit)	$	61,152		$	13,204	$	(62,702	)

The difference between the statutory U.S. federal income tax rate and the effective income tax rate for the years ended December 31, 2023, 2022 and 2021 is summarized as follows:

	2023			2022			2021
Statutory tax rate		21.0	%		21.0	%		21.0	%
State income taxes - net of the federal income tax benefit		3.2			3.0			3.0
State deferred tax remeasurement		(0.3	)		9.4			(0.8	)
Valuation allowance		(9.2	)		(33.4	)		(13.3	)
U.S. impact of foreign operations		—			1.3			—
Acquisition related costs		1.1			—			—
Effect of foreign taxes		0.1			1.6			(0.1	)
Non-deductible compensation		1.8			4.3			(0.3	)
Share-based compensation		1.6			(1.9	)		(0.3	)
Non-deductible expenses		0.7			1.2			(0.2	)
Other differences, net		(0.1	)		1.4			(0.3	)
Effective tax rate		19.9	%		7.9	%		8.7	%

Our effective income tax rate fluctuates based on, among other factors, changes in pre-tax income in countries with varying statutory tax rates, changes in valuation allowances, and the impacts of various other permanent adjustments.

The ability to recognize a portion of our U.S. federal and state net operating losses resulted in a significant impact, through changes in valuation allowances, in our effective tax rate for the year ended December 31, 2023. This benefit was partly offset by state and local income taxes and various other permanent adjustments.

The tax effect of temporary differences and tax attributes representing deferred tax assets and liabilities at December 31, 2023 and 2022 are as follows (in thousands):

	2023			2022
Deferred tax assets:
Net operating loss carryforwards	$	498,948		$	382,936
Tax credits		13,488			4,222
Expense associated with stock options and restricted stock		10,892			8,178
Workers’ compensation allowance		7,024			15,770
Other deferred tax asset		69,480			25,020
		599,832			436,126
Less:
Allowance to reduce deferred tax asset to expected realizable value		(75,250	)		(91,685	)
Total deferred tax assets		524,582			344,441
Deferred tax liabilities:
Property and equipment basis difference		(729,376	)		(355,129	)
Other		(39,386	)		(14,840	)
Total deferred tax liabilities		(768,762	)		(369,969	)
Net deferred tax liability	$	(244,180	)	$	(25,528	)

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized, and when necessary, valuation allowances are provided. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. We assess the realizability of our deferred tax assets quarterly and consider carryback availability, the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. During 2023, we reduced the valuation allowance against our net deferred tax assets by $16.4 million, which primarily related to U.S. federal and state activity.

For income tax purposes, we had approximately $1.9 billion of gross U.S. federal net operating losses, approximately $62.3 million of gross Canadian net operating losses, approximately $22.6 million of gross Colombian net operating losses and approximately $1.1 billion of post-apportionment U.S. state net operating losses as of December 31, 2023, before valuation allowances. The majority of U.S. federal net operating losses will expire in varying amounts, if unused, between 2030 and 2037. U.S. federal net operating losses generated after 2017 can be carried forward indefinitely. Canadian net operating losses will expire in varying amounts, if unused, between 2036 and 2043. Colombian net operating losses will expire in varying amounts, if unused, between 2028 and 2032. U.S. state net operating losses will expire in varying amounts, if unused, between 2024 and 2043.

As of December 31, 2023, we have not recognized any liabilities associated with unrecognized tax benefits. We have established a policy to account for interest and penalties related to uncertain income tax positions as operating expenses. As of December 31, 2023, the tax years ended December 31, 2010 through December 31, 2022 are open for examination by U.S. taxing authorities. As of December 31, 2023, the tax years ended December 31, 2015 through December 31, 2022 are open for examination by Canadian taxing authorities. As of December 31, 2023, the tax years ended December 31, 2017 through December 31, 2022 are open for examination by Colombian taxing authorities.

We continue to monitor income tax developments, including OECD Pillar 2 legislation, in the United States and other countries where we have legal entities. We will incorporate into our future financial statements the impacts, if any, of future regulations and additional authoritative guidance when finalized.