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Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Geographic sources of income (loss) before taxes are as follows:
For the Year Ended December 31,
202420232022
(In thousands)
United States$81,289 $94,643 $81,488 
Foreign349,727 349,198 775,444 
Income before taxes$431,016 $443,841 $856,932 

The components of the provision (benefit) for income taxes are as follows:
For the Year Ended December 31,
202420232022
(In thousands)
Current:
Federal$7,898 $19,831 $40,063 
State34 7 150 
Foreign68,333 48,478 61,300 
76,265 68,316 101,513 
Deferred:
Federal153 8,899 (10,156)
State(501)1 1,458 
Foreign(436)4,494 (2,925)
(784)13,394 (11,623)
Income tax expense$75,481 $81,710 $89,890 

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,
202420232022
U.S. federal statutory income tax rate21.0 %21.0 %21.0 %
Foreign income taxed at different rates(2.1)(4.2)(12.0)
Foreign exchange (loss) gain1.4 0.5 2.2 
Change in valuation allowance(1.8)2.9 (2.4)
Income tax credits generated(6.8)(7.5)(6.1)
Foreign earnings and profits3.5 7.0 9.0 
Foreign derived intangible income(1.8)(1.6)(0.9)
Settlements and changes in uncertain tax positions3.8 (0.5)(0.2)
Other0.3 0.8 (0.1)
Income tax expense17.5 %18.4 %10.5 %

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, Singapore and Vietnam 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 $33.2 million, $18.6 million and $84.5 million in tax benefits as a result of the conditional reduced tax rates in 2024, 2023 and 2022, respectively. The benefit of the conditional reduced tax rates on diluted earnings per share was approximately $0.13, $0.08 and $0.34 for 2024, 2023 and 2022, respectively.

The following is a summary of the components of our deferred tax assets and liabilities:
December 31,
20242023
(In thousands)
Deferred tax assets:
Net operating loss carryforwards$21,420 $33,679 
Tax credit carryforwards69,373 88,147 
Property, plant and equipment18,512 21,387 
Deferred interest expense446 476 
Accrued liabilities37,968 37,832 
Receivable27,284 30,086 
Unrealized foreign exchange loss23,769 7,205 
Operating lease liabilities14,825 16,053 
Other14,203 15,219 
Total deferred tax assets227,800 250,084 
Valuation allowance(107,113)(114,811)
Total deferred tax assets net of valuation allowance120,687 135,273 
Deferred tax liabilities:
Property, plant and equipment27,442 34,206 
Deferred gain3,341 5,739 
Unrealized foreign exchange gain6,674 3,129 
Unbilled receivables6,508 8,995 
Operating lease right of use assets14,240 16,031 
Other6,560 5,533 
Total deferred tax liabilities64,765 73,633 
Net deferred tax assets$55,922 $61,640 
Recognized as:
Other assets$72,488 $73,585 
Other non-current liabilities(16,566)(11,945)
Total$55,922 $61,640 

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,
20242023
(In thousands)
Valuation allowance:
U.S.$44,853 $44,426 
Foreign62,260 70,385 
Total valuation allowance$107,113 $114,811 

Our net operating loss carryforwards are as follows:
December 31,
20242023Expiration
(In thousands)
U.S. federal net operating loss carryforwards$— $5,611 2024
U.S. state net operating loss carryforwards27,334 32,612 2025-2036
Foreign net operating loss carryforwards207,203 196,636 2025-2031

At December 31, 2024 and 2023, 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, 2024 and 2023.
Our tax credit carryforwards are as follows:
December 31,
20242023Expiration
(In thousands)
U.S. Foreign Tax Credits$49,639 $51,512 2027-2034
U.S. Other Tax Credits3,817 2,559 2026-2034
Foreign Tax Credits19,543 34,546 2025-2034

At December 31, 2024 and 2023, 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, 2024, we estimate that repatriation of these foreign earnings would generate withholding taxes and state income taxes of approximately $160 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 2013-2024. 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 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,
202420232022
(In thousands)
Balance at January 1$31,537 $33,253 $37,293 
Additions based on tax positions related to the current year7,260 — 1,519 
Additions for tax positions of prior years3,761 495 1,909 
Reductions for tax positions of prior years(4,992)(345)(5,755)
Reductions related to settlements with tax authorities(789)— (988)
Reductions from lapse of statutes of limitations(461)(1,866)(725)
Balance at December 31$36,316 $31,537 $33,253 

The net increase in our unrecognized tax benefits was $4.8 million from December 31, 2023 to December 31, 2024. The increase was primarily related to income attribution. At December 31, 2024, $32.7 million of our gross unrecognized tax benefits would reduce our effective tax rate, if recognized. It is reasonably possible that unrecognized tax benefits primarily related to income attribution will decrease in the next 12 months by up to $6.6 million due to the lapse of statutes of limitations in foreign jurisdictions.

The liability related to our unrecognized tax benefits, before interest and penalties, was $21.9 million as of December 31, 2024 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 $14.4 million. The balance of accrued and unpaid interest and penalties was $4.5 million as of December 31, 2024 and 2023 and is included as a component of other non-current liabilities in connection with our unrecognized tax benefits.