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Income Taxes | 12 Months Ended
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Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Geographic sources of income (loss) before taxes are as follows:
| For the Year Ended December 31,
| 2023 |  | 2022 |  | 2021
| (In thousands)
United States | $ | 94,643 |  |  | $ | 81,488 |  |  | $ | 81,994 |
Foreign | 349,198 |  |  | 775,444 |  |  | 633,072 |
Income before taxes | $ | 443,841 |  |  | $ | 856,932 |  |  | $ | 715,066 |
The components of the provision (benefit) for income taxes are as follows:
| For the Year Ended December 31,
| 2023 |  | 2022 |  | 2021
| (In thousands)
Current: |  |  |  |  |
Federal | $ | 19,831 |  |  | $ | 40,063 |  |  | $ | 9,649 |
State | 7 |  |  | 150 |  |  | 198 |
Foreign | 48,478 |  |  | 61,300 |  |  | 48,936 |
| 68,316 |  |  | 101,513 |  |  | 58,783 |
Deferred: |  |  |  |  |
Federal | 8,899 |  |  | (10,156) |  |  | 20,478 |
State | 1 |  |  | 1,458 |  |  | 361 |
Foreign | 4,494 |  |  | (2,925) |  |  | (10,163) |
| 13,394 |  |  | (11,623) |  |  | 10,676 |
Income tax expense | $ | 81,710 |  |  | $ | 89,890 |  |  | $ | 69,459 |
The reconciliation between the U.S. federal statutory income tax rate of 21% and our effective tax rate is as follows:
| For the Year Ended December 31,
| 2023 |  | 2022 |  | 2021
U.S. federal statutory income tax rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
Foreign income taxed at different rates | (4.2) |  |  | (12.0) |  |  | (9.5) |
Foreign exchange (loss) gain | 0.5 |  |  | 2.2 |  |  | (2.3) |
Change in valuation allowance | 2.9 |  |  | (2.4) |  |  | 0.1 |
Income tax credits generated | (7.5) |  |  | (6.1) |  |  | (5.1) |
Foreign earnings and profits | 7.0 |  |  | 9.0 |  |  | 5.7 |
Foreign derived intangible income | (1.6) |  |  | (0.9) |  |  | (1.1) |
Settlements and changes in uncertain tax positions | (0.5) |  |  | (0.2) |  |  | 0.8 |
Other | 0.8 |  |  | (0.1) |  |  | 0.1 |
Income tax expense | 18.4 | % |  | 10.5 | % |  | 9.7 | %
In 2022, we reversed $17.8 million of valuation allowance recorded against U.S. foreign tax credit carryforwards previously projected to expire unused due to the limitations to utilize the credits under current tax law. Realization of these carryforwards is dependent on generating sufficient taxable income to overcome the foreign tax credit limitation provisions. Although utilization of these carryforwards is not assured, in light of our current earnings and recent estimates of future taxable income, management believes sufficient positive evidence exists to conclude that the respective valuation allowances are no longer needed, resulting in the reversal of these valuation allowances. As a result of certain capital investments, export commitments and employment levels, income from operations in Korea, the Philippines and Singapore was subject to reduced income tax rates and, in some cases, was exempt from income taxes. The most significant tax rate impact is in Singapore where we have been granted a conditional reduced tax rate that expires at the end of 2028. We recognized $18.6 million, $84.5 million and $56.7 million in tax benefits as a result of the conditional reduced tax rates in 2023, 2022 and 2021, respectively. The benefit of the conditional reduced tax rates on diluted earnings per share was approximately $0.08, $0.34 and $0.23 for 2023, 2022 and 2021, respectively. The following is a summary of the components of our deferred tax assets and liabilities:
| December 31,
| 2023 |  | 2022
| (In thousands)
Deferred tax assets: |  |  |
Net operating loss carryforwards | $ | 33,679 |  |  | $ | 49,846 |
Tax credit carryforwards | 88,147 |  |  | 92,368 |
Property, plant and equipment | 21,387 |  |  | 15,328 |
Deferred interest expense | 476 |  |  | — |
Accrued liabilities | 37,832 |  |  | 39,929 |
Receivable | 30,086 |  |  | 29,178 |
Unrealized foreign exchange loss | 7,205 |  |  | 8,018 |
Revenue recognition | — |  |  | 1,564 |
Operating lease liabilities | 16,053 |  |  | 26,955 |
Other | 15,219 |  |  | 14,665 |
Total deferred tax assets | 250,084 |  |  | 277,851 |
Valuation allowance | (114,811) |  |  | (101,869) |
Total deferred tax assets net of valuation allowance | 135,273 |  |  | 175,982 |
Deferred tax liabilities: |  |  |
Property, plant and equipment | 34,206 |  |  | 50,215 |
Deferred gain | 5,739 |  |  | 7,839 |
Unrealized foreign exchange gain | 3,129 |  |  | 5,242 |
Unbilled receivables | 8,995 |  |  | 822 |
Operating lease right of use assets | 16,031 |  |  | 26,241 |
Other | 5,533 |  |  | 7,433 |
Total deferred tax liabilities | 73,633 |  |  | 97,792 |
Net deferred tax assets | $ | 61,640 |  |  | $ | 78,190 |
Recognized as: |  |  |
Other assets | $ | 73,585 |  |  | $ | 86,616 |
Other non-current liabilities | (11,945) |  |  | (8,426) |
Total | $ | 61,640 |  |  | $ | 78,190 |
We monitor on an ongoing basis our ability to utilize our deferred tax assets and whether there is a need for a related valuation allowance. In evaluating our ability to recover our deferred tax assets in the jurisdictions from which they arise, we consider all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax-planning strategies and recent results of operations. Valuation allowance against deferred tax assets consist of the following:
| December 31,
| 2023 |  | 2022
| (In thousands)
Valuation allowance: |  |  |
U.S. | $ | 44,426 |  |  | $ | 40,610 |
Foreign | 70,385 |  |  | 61,259 |
Total valuation allowance | $ | 114,811 |  |  | $ | 101,869 |
Our net operating loss carryforwards are as follows:
| December 31, |  |
| 2023 |  | 2022 |  | Expiration
| (In thousands) |  |
U.S. federal net operating loss carryforwards | $ | 5,611 |  |  | $ | 13,003 |  |  | 2024
U.S. state net operating loss carryforwards | 32,612 |  |  | 38,384 |  |  | 2024-2036
Foreign net operating loss carryforwards | 196,636 |  |  | 240,740 |  |  | 2027-2031
At December 31, 2023 and 2022, a portion of our remaining U.S. federal net operating loss carryforwards was reserved with a valuation allowance due to ownership change limitations from a prior year acquisition as well as certain state net operating loss carryforwards expected to expire unused. Also, we have a valuation allowance against foreign net operating loss carryforwards that we do not expect to have sufficient taxable income to realize as of December 31, 2023 and 2022. Our tax credit carryforwards are as follows:
| December 31, |  |
| 2023 |  | 2022 |  | Expiration
| (In thousands) |  |
U.S. Foreign Tax Credits | $ | 51,512 |  |  | $ | 54,130 |  |  | 2027-2033
U.S. Other Tax Credits | 2,559 |  |  | 110 |  |  | 2026-2033
Foreign Tax Credits | 34,546 |  |  | 38,128 |  |  | 2024-2033
At December 31, 2023 and 2022, a portion of our U.S. and foreign tax credit carryforwards were reserved with a valuation allowance for the amount expected to expire unused. Distributions of cash to the U.S. as dividends generally will not be subject to U.S. federal income tax. We have not provided foreign withholding taxes or state income taxes on the undistributed earnings of our foreign subsidiaries, over which we have sufficient influence to control the distribution of such earnings and have determined that substantially all such earnings have been reinvested indefinitely. These earnings could become subject to foreign withholding tax if they are remitted as dividends. For the year ended December 31, 2023, we estimate that repatriation of these foreign earnings would generate withholding taxes and state income taxes of approximately $165.9 million. We operate in and file income tax returns in various U.S. and foreign jurisdictions which are subject to examination by tax authorities. We have tax returns that are open to examination in various jurisdictions for tax years 2013-2023. The open years contain matters that could be subject to differing interpretations of applicable tax laws and regulations related to the amount and/or timing of income, deductions and tax credits. There can be no assurance that the outcome of examinations will be favorable. Our unrecognized tax benefits are subject to change as examinations of specific tax years are completed in the respective jurisdictions. In certain circumstances where we elect to appeal the results of an examination, we may be required to make tax assessment payments to proceed with the administrative appeal process. Current examinations include 2019-2022 Korean income tax returns, 2017-2021 Malaysia income tax returns and 2021 Philippine income tax return. A reconciliation of the beginning and ending gross amount of unrecognized tax benefits is as follows:
| For the Year Ended December 31,
| 2023 |  | 2022 |  | 2021
| (In thousands)
Balance at January 1 | $ | 33,253 |  |  | $ | 37,293 |  |  | $ | 32,598 |
Additions based on tax positions related to the current year | — |  |  | 1,519 |  |  | 9,562 |
Additions for tax positions of prior years | 495 |  |  | 1,909 |  |  | 1,740 |
Reductions for tax positions of prior years | (345) |  |  | (5,755) |  |  | (66) |
Reductions related to settlements with tax authorities | — |  |  | (988) |  |  | (1,266) |
Reductions from lapse of statutes of limitations | (1,866) |  |  | (725) |  |  | (5,275) |
Balance at December 31 | $ | 31,537 |  |  | $ | 33,253 |  |  | $ | 37,293 |
The net decrease in our unrecognized tax benefits was $1.7 million from December 31, 2022 to December 31, 2023. The decrease was primarily related to the lapse of statutes of limitations. At December 31, 2023, all of our gross unrecognized tax benefits would reduce our effective tax rate, if recognized. It is reasonably possible that unrecognized tax benefits related to income attribution will decrease in the next 12 months by up to $0.8 million due to the lapse of statutes of limitations in foreign jurisdictions. The liability related to our unrecognized tax benefits, before interest and penalties, is $23.0 million as of December 31, 2023 and is reported as a component of other non-current liabilities. The unrecognized tax benefits presented in the table above also include positions that have reduced deferred tax assets by $8.5 million. The balance of accrued and unpaid interest and penalties is $4.5 million and $4.9 million as of December 31, 2023 and 2022, respectively, and is included as a component of other non-current liabilities in connection with our unrecognized tax benefits.

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