Annual report pursuant to Section 13 and 15(d)

Income Taxes (Tables)

v3.19.3.a.u2
Income Taxes (Tables)
12 Months Ended
Dec. 31, 2019
Income Tax Disclosure [Abstract]  
Summary of Income (Loss) Before Income Taxes
Income (loss) before income taxes is summarized below:
 
Successor
 
 
Predecessor
 
Nine Months Ended December 31,
 
 
Three Months Ended March 31,
 
Year Ended December 31,
Dollars in thousands
2019
 
 
2019
 
2018
United States
$
(3,342
)
 
 
$
16,785

 
$
(145,954
)
Foreign
20,946

 
 
(106,377
)
 
(11,947
)
Income (loss) before income taxes
$
17,604

 
 
$
(89,592
)
 
$
(157,901
)

Summary of Income Tax Expense (Benefit)
Income tax expense (benefit) is summarized as follows:
 
Successor
 
 
Predecessor
 
Nine Months Ended December 31,
 
 
Three Months Ended March 31,
 
Year Ended December 31,
Dollars in thousands
2019
 
 
2019
 
2018
Federal
$
(2,503
)
 
 
$
(364
)
 
$
(14
)
State
136

 
 
50

 
229

Foreign
7,557

 
 
2,655

 
8,010

Total current tax expense
5,190

 
 
2,341

 
8,225

Federal
5,163

 
 

 

State
635

 
 

 

Foreign
107

 
 
(1,685
)
 
(429
)
Total deferred tax expense (benefit)
5,905

 
 
(1,685
)
 
(429
)
Total income tax expense
$
11,095

 
 
$
656

 
$
7,796

 
 
 
 
 
 
 
Effective tax rate
63.0
%
 
 
(0.7
)%
 
(4.9
)%

Schedule of Income Tax Reconciliation from Federal Income Tax Statutory Rate
The Company’s effective tax rate differs from the amount that would be computed by applying the U.S federal income tax rate of 21% to pre-tax income as a result of the following:
 
Successor
 
 
Predecessor
 
Nine Months Ended December 31,
 
 
Three Months Ended March 31,
 
Year Ended 
 December 31,
 
2019
 
 
2019
 
2018
Dollars in thousands
Amount
 
% of Pre-Tax
Income
 
 
Amount
 
% of Pre-Tax
Income
 
Amount
 
% of Pre-Tax
Income
Income tax expense (benefit) at U.S. statutory rate
$
3,696

 
21.0
 %
 
 
$
(18,814
)
 
21.0
 %
 
$
(33,160
)
 
21.0
 %
Foreign taxes
565

 
3.2
 %
 
 
1,809

 
(2.0
)%
 
7,321

 
(4.6
)%
Tax effect different from statutory rates
472

 
2.7
 %
 
 
11,125

 
(12.4
)%
 
(68
)
 
 %
State taxes, net of federal benefit
305

 
1.7
 %
 
 
5,036

 
(5.6
)%
 
(2,552
)
 
1.6
 %
Change in valuation allowance
3,706

 
21.1
 %
 
 
(98,856
)
 
110.3
 %
 
28,353

 
(18.0
)%
Uncertain tax positions
(2,056
)
 
(11.7
)%
 
 
(940
)
 
1.1
 %
 
(221
)
 
0.1
 %
Permanent differences
421

 
2.4
 %
 
 
20,543

 
(22.9
)%
 
8,008

 
(5.1
)%
Prior year adjustments
(331
)
 
(1.9
)%
 
 
4,535

 
(5.1
)%
 
50

 
 %
Expiration/write-off of deferred tax assets
4,217

 
23.9
 %
 
 
76,034

 
(84.9
)%
 

 
 %
Other
100

 
0.6
 %
 
 
184

 
(0.2
)%
 
65

 
0.1
 %
Income tax expense
$
11,095

 
63.0
 %
 
 
$
656

 
(0.7
)%
 
$
7,796

 
(4.9
)%

Schedule of Income Taxes Paid (Net of any Refunds)
Supplemental cash flow information related to income taxes paid (net of refunds) are as follow:
 
Successor
 
 
Predecessor
 
Nine Months Ended December 31,
 
 
Three Months Ended March 31,
 
Year Ended December 31,
Dollars in thousands
2019
 
 
2019
 
2018
Income taxes paid (net of refunds)
$
8,161

 
 
$
1,421

 
$
7,373


Components of Deferred Tax Assets and Liabilities
Deferred tax assets and deferred tax liabilities consisted of:
 
Successor
 
 
Predecessor
 
Year Ended December 31,
 
 
Year Ended December 31,
Dollars in thousands
2019
 
 
2018
Federal net operating loss (“NOL”) carryforwards
$
39,636

 
 
$
109,002

State NOL carryforwards
5,165

 
 
13,168

Property, plant, and equipment
8,458

 
 

Excess interest

 
 
6,230

Other state deferred tax asset, net
1,149

 
 
1,201

Foreign tax credits

 
 
46,913

FIN 48
126

 
 
887

Foreign tax
45,026

 
 
40,190

Accruals not currently deductible for tax purposes
1,990

 
 
3,119

Deferred compensation
1,107

 
 
816

Other
377

 
 
1,297

Total deferred tax assets
103,034

 
 
222,823

Valuation allowance
(91,117
)
 
 
(186,267
)
Total deferred tax assets, net of valuation allowance
11,917

 
 
36,556

Property, plant, and equipment
(9,353
)
 
 
(28,440
)
Foreign taxes
(942
)
 
 
(510
)
Other state deferred tax liability, net
(2,236
)
 
 
(5,096
)
Intangibles
(1,972
)
 
 
(877
)
Total deferred tax liabilities
(14,503
)
 
 
(34,923
)
Net deferred tax asset (liability)
$
(2,586
)
 
 
$
1,633


Reconciliation of Unrecognized Tax Benefits
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
Dollars in thousands
 
Balance at January 1, 2019 (Predecessor)
$
(5,728
)
Additions based on tax position taken during a prior period
(148
)
Additions based on tax positions taken during the current period
(158
)
Reductions related to a lapse of applicable statute of limitations
1,141

Balance at March 31, 2019 (Predecessor)
(4,893
)
 
 
 
 
Additions based on tax positions taken during a prior period
(252
)
Additions based on tax positions taken during the current period
(492
)
Reductions based on tax positions taken during a prior period
9

Reductions related to settlement of tax matters
310

Reductions related to a lapse of applicable statute of limitations
1,668

Balance at December 31, 2019 (Successor)
$
(3,650
)

Open Tax Years by Major Tax Jurisdiction The following describes the open tax years, by major tax jurisdiction, as of December 31, 2019:
Canada
2016-present
Kazakhstan
2008-present
Mexico
2015-present
Russia
2015-present
United States — Federal
2008-present
United Kingdom
2017-present

Schedule of Liability for Unrecognized Tax Benefits and Accrued Interest and Penalties Unrecognized tax benefits and accrued interest and penalties related to uncertain tax positions was as follows:
 
Successor
 
 
Predecessor
Dollars in thousands
December 31,
2019
 
 
December 31,
2018
Liability for unrecognized tax benefits (1)
$
3,650

 
 
$
5,728

Accrued interest related to uncertain tax positions
$
600

 
 
$
833

Penalties related to uncertain tax positions
$
791

 
 
$
1,273


(1)
Our effective tax rate would be favorably impacted if the liability for unrecognized tax benefits is recognized.