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Income Taxes
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The income tax expense (benefit) components recognized in Cont Ops follow:
 Year Ended December 31,
(in thousands)202120202019
Current:
Federal (a)
$961 $(121,411)$(36,591)
Foreign40,823 133,810 159,876 
State and local(4,754)5,343 4,295 
Total current37,030 17,742 127,580 
Deferred:
Federal— 17,451 325,351 
Foreign(20,541)(19,337)9,593 
State and local— — 19,441 
Total deferred(20,541)(1,886)354,385 
Total income tax expense$16,489 $15,856 $481,965 

(a)    The CARES Act allows entities to carry back 2019 loss to prior periods of up to five years and claim refunds of federal taxes paid. The Company has filed the refund claim with the IRS and received a refund of $49 million in the third quarter of 2020 and expect a refund of $72 million in 2022.

A reconciliation of U.S. statutory federal income tax expense (benefit) to income tax expense (benefit) from Cont Ops follows:
 Year Ended December 31,
(in thousands)202120202019
U.S. statutory federal tax expense (benefit)$(26,818)$734 $(176,288)
Increase (decrease) in taxes resulting from:
State and local income taxes12,777 (10,817)(5,128)
U.S. tax on GILTI— 3,835 21,433 
NCI(6,718)(9,143)13,209 
Foreign tax differential, net(23,315)(10,386)3,989 
Valuation allowance, net99,663 146,930 659,203 
Other changes to uncertain tax positions895 7,484 4,098 
Stranded tax effects from AOCI(51,782)— (35,619)
CARES Act benefit2,188 (124,753)— 
Other, net9,599 11,972 (2,932)
Total income tax expense$16,489 $15,856 $481,965 
Deferred taxes reflect the tax effects of differences between the amounts recorded as assets and liabilities for financial reporting purposes and the amounts recorded for income tax purposes. The tax effects of significant temporary differences giving rise to deferred tax assets and liabilities are as follows:
 December 31,
(in thousands)20212020
Deferred tax assets:
Accrued liabilities not currently deductible:
Employee compensation and benefits$138,034 $104,305 
Project and non-project reserves67,861 71,999 
Net operating loss carryforward346,561 326,402 
Tax basis of investment in excess of book basis144,019 118,915 
U.S. foreign tax credit carryforward455,912 414,348 
AOCI26,982 62,681 
Other26,794 103,955 
Total deferred tax assets1,206,163 1,202,605 
Valuation allowance(1,114,574)(1,080,752)
Deferred tax assets, net$91,589 $121,853 
Deferred tax liabilities:
Book basis of property and equipment in excess of tax basis(31,197)(43,475)
Dividend withholding on unremitted non-U.S. earnings(55,080)(57,859)
Other(21,539)(23,349)
Total deferred tax liabilities(107,816)(124,683)
Deferred tax assets, net of deferred tax liabilities$(16,227)$(2,830)

As of December 31, 2021, we are indefinitely reinvested only with respect to unremitted earnings required to meet our working capital and long-term investment needs in the foreign jurisdictions within which we operate. Beyond those limits, we expect current earnings to be available for distribution. Deferred tax liabilities of approximately $31 million have not been recorded with respect to unremitted earnings that are considered indefinitely reinvested, again primarily associated with foreign withholding and income taxes that would be due upon remittance. We have no intention of initiating any actions that would lead to taxation of the earnings deemed indefinitely reinvested.

As of December 31, 2021, tax credit carryforwards, principally federal, and tax loss carryforwards, principally federal, state, and foreign, were as follows:

(in thousands)Federal FTCFederal NOLsState NOLsForeign NOLs
Expiration periods:
2022 - 2026$94,317 $— $10,932 $40,177 
2027-2031361,595 — 34,034 56,255 
2032-2041— — 351,159 5,783 
Indefinite— 163,099 131,680 1,177,047 

During 2021 and 2020, we were in a three-year cumulative loss on a consolidated, jurisdictional basis in Australia, the Netherlands, the U.K. and the U.S. Such cumulative loss constitutes significant negative evidence (with regards to future taxable income) for assessing likelihood of realization. We also considered positive evidence but concluded it did not outweigh this significant negative evidence of a three-year cumulative loss. Accordingly, we recognized non-cash charges to tax expense of $10 million and $142 million to record a valuation allowance against net U.S. deferred tax assets and $42 million and $28 million against certain net foreign deferred tax assets during 2021 and 2020, respectively. We also reduced a valuation allowance for $18 million in AOCI against net deferred tax assets primarily related to the Netherlands' pension settlement that occurred in the fourth quarter of 2021.
In the normal course of business, we are subject to examination by taxing authorities worldwide, including such major jurisdictions as Australia, Canada, Chile, the Netherlands, the U.K. and the U.S. Although we believe our reserves for our tax positions are reasonable, the outcome of tax audits could be materially different, both favorably and unfavorably. With a few exceptions, we are no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations for years before 2012.

A summary of unrecognized tax benefits follows:
(in thousands)20212020
Balance at beginning of year$48,413 $42,394 
Change in tax positions of prior years— 8,166 
Change in tax positions of current year— — 
Reduction in tax positions for statute expirations(514)(1,510)
Reduction in tax positions for audit settlements— (637)
Balance at end of year$47,899 $48,413 

If recognized, the total amount of unrecognized tax benefits as of December 31, 2021 and 2020, would favorably impact the effective tax rates by $30 million in both years. We had $13 million and $11 million of accrued interest and penalties as of December 31, 2021 and 2020, respectively. We do not anticipate any significant changes to the unrecognized tax benefits within the next twelve months.

U.S. and foreign earnings (loss) from Cont Ops before taxes are as follows:
 Year Ended December 31,
(in thousands)202120202019
United States$(176,271)$(276,041)$(873,189)
Foreign48,566 279,535 33,724 
Total$(127,705)$3,494 $(839,465)