Annual report [Section 13 and 15(d), not S-K Item 405]

INCOME TAXES

v3.25.4
INCOME TAXES
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The Company recognizes deferred tax assets or liabilities for the differences between the financial statement carrying amount and tax basis of assets and liabilities using enacted tax rates in effect for the years in which the asset is expected to be recovered or the liability is expected to be settled.
The components of deferred tax assets and liabilities are as follows (in thousands):
December 31,
  2025 2024
Deferred tax assets:
Foreign tax credits $ 6,004  $ 6,275 
Net operating losses 116,539  137,902 
Pension liability —  41 
Interest expense limitation 65,108  53,572 
Accrued expenses not currently deductible 24  12,682 
Lease liabilities 80,506  87,778 
Other 5,727  7,660 
Foreign currency adjustments 11,974  — 
Gross deferred tax assets 285,882  305,910 
Valuation allowance (97,766) (139,272)
Total deferred tax assets $ 188,116  $ 166,638 
Deferred tax liabilities:
Property and equipment $ (97,338) $ (92,505)
Accrued pension liability (2,897) — 
Inventories (925) (976)
Investment in foreign subsidiaries and unconsolidated affiliates (1,215) (2,764)
Right-of-use lease asset (80,576) (87,826)
Intangibles (9,199) (13,838)
Other 354  17,692 
Total deferred tax liabilities $ (191,796) $ (180,217)
Net deferred tax liabilities $ (3,680) $ (13,579)
As of December 31, 2025, the Company had deferred tax assets of $42.9 million recorded in other assets on the consolidated balance sheets.
For U.S. income taxes, companies may use foreign tax credits to offset the income taxes due on income earned from foreign sources. The foreign tax credits claimed for a particular taxable year may be limited. Foreign tax credits may be carried back one year and forward ten years. As of December 31, 2025, the Company had $6.0 million of excess foreign tax credits, all of which will expire in 2026 and beyond.
As of December 31, 2025, the Company had $10.5 million of net operating loss carryforwards in the U.S. In addition, the Company has net operating losses in certain states totaling $558.7 million, which will begin to expire in 2026. The following table shows the expiration of such loss carryforwards (in thousands, except dates):
  December 31, 2025 Expiration
Foreign tax credit carryforwards $6,004 2028-2032
Foreign net operating loss carryforwards $390,102 Indefinite
State net operating loss carryforwards $101,524 Indefinite
State net operating loss carryforwards $457,205 2026-2042
Section 163j interest expense $275,998 Indefinite
The Company estimates the likelihood of the recoverability of its deferred tax assets. Any valuation allowance recorded is based on estimates and assumptions of taxable income in future periods and a determination is made of the magnitude of deferred tax assets which are more likely than not to be realized. If these estimates and related assumptions change in the future, the Company may be required to record additional valuation allowances against its deferred tax assets and its effective tax rate may increase which could result in a material adverse impact on the Company’s financial position and results of operations. Valuation allowances continue to be applied against certain deferred income tax assets where the Company has assessed that the realization of
such assets does not meet the “more likely than not” criteria. Total valuation allowances against net deferred tax assets were $97.8 million and $139.3 million as of December 31, 2025 and 2024, respectively. As of December 31, 2025, valuation allowances were $34.6 million for foreign operating loss carryforwards, $8.9 million for state operating loss carryforwards, $36.8 million for interest expense limitation carryforwards, $3.1 million for foreign tax credits and $1.0 million for capital loss carryforwards. As of December 31, 2024, valuation allowances were $62.3 million for foreign operating loss carryforwards, $26.1 million for state operating loss carryforwards, $28.2 million for interest expense limitation carryforwards and $3.2 million for foreign tax credits and $1.0 million for capital loss carryforwards.
The Company recorded $1.5 million of deferred taxes related to the change in estimated UK pension liabilities. This amount is reflected in other comprehensive income. During the year ended December 31, 2025, the Company utilized $31.0 million of net operating losses in various foreign jurisdictions and released through continuing operations an offsetting valuation allowance previously recorded against the net operating losses.
In July 2025, a new tax bill referred to as the One Big Beautiful Bill Act (“OBBBA”) was signed into law in the U.S. As part of the new tax law, the OBBBA extends key elements of the previous Tax Cuts and Jobs Act enacted on December 22, 2017, including the 21% U.S. Federal statutory tax rate, business interest expense deduction limits, 100% bonus depreciation, domestic research cost expensing, and various expiring international provisions, with certain modifications. Pursuant to ASC 740 - Income Taxes, changes in tax rates and tax law are required to be recognized in the period in which the legislation is enacted. The Company has completed its evaluation of the impact of this legislation and has determined that the OBBBA did not have a material impact on its 2025 financial statements.
The components of income (loss) before income taxes for the periods reflected in the table below were as follows (in thousands):
  Year Ended December 31, 2025 Year Ended December 31, 2024 Year Ended December 31, 2023
Domestic $ 45,739  $ 21,188  $ (39,130)
Foreign 105,497  80,875  57,142 
Income (loss) before income taxes $ 151,236  $ 102,063  $ 18,012 
The components of income tax expense for the periods reflected in the table below were as follows (in thousands):
  Year Ended December 31, 2025 Year Ended December 31, 2024 Year Ended December 31, 2023
Current:
Domestic $ 4,776  $ 12,839  $ 10,347 
Foreign 27,051  14,314  13,916 
$ 31,827  $ 27,153  $ 24,263 
Deferred:
Domestic $ 10,464  $ (14,519) $ (2,568)
Foreign (20,482) (5,441) 3,237 
$ (10,018) $ (19,960) $ 669 
Income tax expense $ 21,809  $ 7,193  $ 24,932 
    
The following table reflects information on the provision of income taxes and rate reconciliations in accordance with ASU 2023-09:
Category Year Ended December 31, 2025 Effective Tax Rate
Federal statutory tax rate      31,760  21.0  %
State and local income taxes, net of federal income tax effect (1)
1,997  1.3  %
Foreign tax effects:
Australia
Nontaxable or nondeductible items (2,455) (1.6) %
Gain on sale of investment 2,541  1.7  %
Valuation allowances (27,110) (17.9) %
Cayman Islands
Tax rate differential (3,212) (2.1) %
Ireland
Other (767) (0.5) %
Tax rate differential 2,481  1.6  %
Netherlands
Transfer pricing (3,221) (2.1) %
Other 573  0.4  %
Nigeria
Other 3,199  2.1  %
Tax credits (3,248) (2.1) %
Tax rate differential 4,068  2.6  %
Withholding tax 2,326  1.5  %
Panama
Other (161) (0.1) %
Tax exempt interest (134,385) (88.9) %
Tax rate differential 21,572  14.3  %
Trinidad and Tobago   
Other 168  0.1  %
Tax rate differential 2,132  1.4  %
United Kingdom (England, Northern Ireland, Scotland, and Wales)
Gain on sale of investment 2,260  1.5  %
Other 1,221  0.8  %
Pillar two top up tax 1,715  1.1  %
Tax credits (2,640) (1.7) %
Tax exempt interest 134,280  88.8  %
Tax rate differential (20,285) (13.4) %
  Other jurisdictions    2,201  1.5  %
Effect of cross-border tax laws
Forgone foreign tax credit 3,265  2.2  %
Other 711  0.5  %
Valuation allowances (1,735) (1.2) %
Nontaxable or nondeductible Items 3,236  2.1  %
Other adjustments (676) (0.5) %
Total 21,809  14.4  %
(1)For the year ended December 31, 2025, state and local income taxes are primarily related to the state of Louisiana.
Below is a reconciliation of the statutory federal income tax expense and the Company’s total tax expense for years ended December 31, 2023 and 2024:
  Year Ended December 31, 2024 Year Ended December 31, 2023
Statutory rate 21.0  % 21.0  %
Net foreign tax on non-U.S. earnings 0.9  % 15.5  %
Foreign earnings double tax relief (8.0) % (9.5) %
Foreign earnings indefinitely reinvested abroad —  % (3.4) %
Change in valuation allowance (3.5) % (23.6) %
Foreign earnings that are currently taxed in the U.S. —  % 7.4  %
Changes in prior year estimates (0.3) % —  %
Impact of U.S. withholding tax 10.6  % 2.2  %
Impact of tax rate changes 2.9  % 2.6  %
Foreign tax credits 12.9  % 76.5  %
Deferred gains (3.1) % 7.9  %
GILTI income 0.9  % 19.8  %
Other, net (27.2) % 22.0  %
Effective tax rate 7.1  % 138.4  %
The Company is domiciled in the U.S. and is a U.S. tax resident. Its subsidiaries conduct operations and earn income in numerous countries and are subject to the laws of taxing jurisdictions within those countries. During the year ended December 31, 2025, the Company recorded a total income tax provision of $21.8 million on pre-tax income of $151.2 million, resulting in an effective tax rate of 14.4%. The effective tax rate for 2025 was primarily impacted by our geographic mix of earnings and changes of valuation allowances on some of our deferred tax assets, mainly attributable to Australia.

For the year ended December 31, 2025, the Company did not experience any expiration of foreign tax credits. The Company remains focused on reviewing and implementing tax strategies that enhance the effective use of foreign tax credits while seeking to prevent potential expirations.
The Company’s 2024 consolidated effective income tax rate includes other, net discrete tax benefits of 18.4% from currency translation adjustments, a release of an unrecognized tax benefit of 4.0% due to the expiration of the statute of limitation on uncertain tax positions in foreign jurisdictions and a 7.8% tax benefit associated with adjustments to deferred tax balances.
The Company’s 2023 consolidated effective income tax rate includes $15.6 million of expired foreign tax credits in the U.S. due to the 10-year carryforward limitation. However, there was a corresponding valuation allowance released, which fully offset the impact of the effective income tax rate in the change in valuation allowances. The Company’s 2023 consolidated effective income tax rate includes other, net tax expense of 5.8% from imputed interest, UK disallowed interest of 8.6% and non-deductible expenses of 5.3%.
The Company files income tax returns in the U.S. federal jurisdiction, various states and foreign jurisdictions. The Company is currently undergoing multiple tax examinations in various jurisdictions in which it operates. The ultimate settlement and timing of these additional potential tax assessments is uncertain, but the Company will continue to vigorously defend its return filing positions and does not view additional assessments as probable at this time.
The following table summarizes the years open by jurisdiction as of December 31, 2025:
  Years Open
U.S. 2022 to present
UK 2024 to present
Nigeria 2015 to present
Guyana 2015 to present
Trinidad 2019 to present
Australia 2021 to present
Norway 2020 to present
Brazil 2021 to present
During the year ended December 31, 2025, no adjustments were made to estimates for uncertain tax positions based upon changes in facts and circumstances. As of December 31, 2025 and 2024, the Company had $0.1 million and $0.1 million, of unrecognized tax benefits, respectively, which would not have a material impact on its effective tax rate, if recognized.
The activity associated with unrecognized tax benefit for the periods reflected in the table below was follows (in thousands):
  Year Ended December 31, 2025 Year Ended December 31, 2024 Year Ended December 31, 2023
Unrecognized tax benefits – beginning of period $ 100  $ 4,173  $ 4,067 
Increases for tax positions taken in prior periods —  —  106 
Decrease related to statute of limitation expirations —  (4,073) — 
Unrecognized tax benefits – end of period $ 100  $ 100  $ 4,173 
As of December 31, 2025, the Company had aggregated approximately $410.7 million in unremitted earnings generated by foreign subsidiaries. The Company expects to indefinitely reinvest these earnings and has not provided deferred taxes on these unremitted earnings. If the Company’s expectations were to change, withholding and other applicable taxes incurred upon repatriation, if any, are not expected to have a material impact on its results of operations.
The following table presents income taxes paid (net of refunds received) for the year ended December 31, 2025 (in thousands):
Jurisdiction 2025 Actual % of Total
Nigeria $ 8,613  32  %
US 13,407  50  %
Trinidad 1,946  7  %
Falkland Islands 1,370  5  %
Other 1,382  5  %
Total $ 26,718  100  %