XML 29 R15.htm IDEA: XBRL DOCUMENT
v3.22.4

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | Note 8. Income Taxes Prior to the Silver Lake Transaction, the Company was not a taxable entity. However, the Company’s wholly owned C-corporation subsidiaries were taxable entities. In connection with the Silver Lake Transaction, the Company became a U.S. domiciled corporation for tax purposes. The Company’s income tax expense and balance sheet accounts reflect the results of the Company and its subsidiaries. The domestic and foreign components of income (loss) before provision for income taxes for the year ended December 31, 2022 (Successor), for the year ended December 31, 2021 (Successor), for the period from February 1, 2020 through December 31, 2020 (Successor), and for the period from January 1, 2020 through January 31, 2020 (Predecessor), respectively, were as follows (in thousands):
|  | Successor |  |  |  | Predecessor |
|  | Year Ended December 31, 2022 |  |  | Year Ended December 31, 2021 |  |  | Period from February 1, 2020 through December 31, 2020 |  |  |  | Period from January 1, 2020 through January 31, 2020 |
Income (loss) before provision for income taxes from United States operations |  | $ | 46,766 |  |  | $ | (7,791 | ) |  | $ | (68,008 | ) |  |  | $ | (38,181 | )
Income before provision for income taxes from foreign operations |  |  | 38,313 |  |  |  | 32,704 |  |  |  | 9,161 |  |  |  |  | 780 |
Income (loss) before provision for income taxes |  | $ | 85,079 |  |  | $ | 24,913 |  |  | $ | (58,847 | ) |  |  | $ | (37,401 | )
The domestic and foreign components of the provision for income taxes for the year ended December 31, 2022 (Successor), for the year ended December 31, 2021 (Successor), for the period from February 1, 2020 through December 31, 2020 (Successor), and for the period from January 1, 2020 through January 31, 2020 (Predecessor), respectively, were as follows (in thousands):
|  | Successor |  |  |  | Predecessor |
|  | Year Ended December 31, 2022 |  |  | Year Ended December 31, 2021 |  |  | Period from February 1, 2020 through December 31, 2020 |  |  |  | Period from January 1, 2020 through January 31, 2020 |
Current: |  |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 179 |  |  | $ | 58 |  |  | $ | 51 |  |  |  | $ | (2 | )
State |  |  | 4,593 |  |  |  | 4,003 |  |  |  | 1,994 |  |  |  |  | (79 | )
Foreign |  |  | 9,817 |  |  |  | 7,618 |  |  |  | 3,818 |  |  |  |  | 128 |
Total Current |  | $ | 14,589 |  |  | $ | 11,679 |  |  | $ | 5,863 |  |  |  | $ | 47 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 1,773 |  |  | $ | 549 |  |  | $ | (16,144 | ) |  |  | $ | (701 | )
State |  |  | 5,030 |  |  |  | (4,495 | ) |  |  | (784 | ) |  |  |  | (149 | )
Foreign |  |  | (917 | ) |  |  | 1,129 |  |  |  | (290 | ) |  |  |  | (68 | )
Total Deferred |  | $ | 5,886 |  |  | $ | (2,817 | ) |  | $ | (17,218 | ) |  |  | $ | (918 | )
Total |  | $ | 20,475 |  |  | $ | 8,862 |  |  | $ | (11,355 | ) |  |  | $ | (871 | )
In the Predecessor periods, our effective tax rate was significantly impacted by the recognition of valuation allowances against certain deferred tax assets, primarily in the United States. In the Successor period, based upon the weight of all available evidence, the Company no longer maintains a valuation allowance against its deferred tax assets in the United States. The following table reconciles the U.S. statutory federal tax rate of 21% to the Company’s effective income tax rate of 24.07%, 35.57%, 19.29%, and 2.33%, for the year ended December 31, 2022 (Successor), for the year ended December 31, 2021 (Successor), for the period from February 1, 2020 through December 31, 2020 (Successor), and for the period from January 1, 2020 through January 31, 2020 (Predecessor), respectively:
|  | Successor |  |  |  | Predecessor |
|  | Year Ended December 31, 2022 |  |  | Year Ended December 31, 2021 |  |  | Period from February 1, 2020 through December 31, 2020 |  |  |  | Period from January 1, 2020 through January 31, 2020 |
U.S. statutory federal tax rate |  |  | 21.00 | % |  |  | 21.00 | % |  |  | 21.00 | % |  |  |  | 21.00 | %
State and local income taxes – net of federal tax benefits |  |  | 2.85 |  |  |  | (5.32 | ) |  |  | (1.50 | ) |  |  |  | (0.99 | )
Foreign rate difference |  |  | 0.67 |  |  |  | 3.25 |  |  |  | (0.14 | ) |  |  |  | 0.06 |
Change in valuation allowances |  |  | (1.06 | ) |  |  | (2.72 | ) |  |  | 0.00 |  |  |  |  | (12.37 | )
GILTI inclusion |  |  | 1.41 |  |  |  | 7.92 |  |  |  | 2.71 |  |  |  |  | (0.34 | )
Transaction cost |  |  | — |  |  |  | 5.21 |  |  |  | (1.09 | ) |  |  |  | (3.14 | )
Share-based compensation |  |  | 0.62 |  |  |  | 5.82 |  |  |  | (0.40 | ) |  |  |  | (2.23 | )
Rate change impact |  |  | (0.43 | ) |  |  | 2.23 |  |  |  | — |  |  |  |  | — |
US research and development credit |  |  | (1.44 | ) |  |  | (7.15 | ) |  |  | 0.85 |  |  |  |  | 0.35 |
Withholding tax |  |  | 0.38 |  |  |  | 5.34 |  |  |  | (1.90 | ) |  |  |  | — |
Other |  |  | 0.07 |  |  |  | (0.01 | ) |  |  | (0.24 | ) |  |  |  | (0.01 | )
Effective tax rate |  |  | 24.07 | % |  |  | 35.57 | % |  |  | 19.29 | % |  |  |  | 2.33 | %
On March 18, 2020, the Families First Coronavirus Response Act, and on March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act were each enacted in response to the COVID-19 pandemic. Some of the key tax-related provisions benefiting the Company include favorable modifications to the limitation on the deductibility of business interest and payroll tax deferral. As a result of the adjustment to the business interest limitations by these laws, the Company was eligible to increase its deductible interest expense for the period from February 1, 2020 through December 31, 2020 (Successor) and for the period from January 1, 2020 through January 31, 2020 (Predecessor). On August 16, 2022, the Inflation Reduction Act (“IRA”) was signed into law in the U.S. Some of the key provisions included in the IRA include implementation of a new alternative minimum tax, an excise tax on stock buybacks, and significant tax incentives for energy and climate initiatives. The Company has determined that the IRA had no significant impact on the Company as of and for the year ended December 31, 2022 (Successor). As of December 31, 2022 (Successor), the Company had approximately $69.2 million of accumulated unremitted earnings generated by its foreign subsidiaries. Under the U.S. Tax Cuts and Jobs Act of 2017 (“2017 Tax Act”), a portion of these earnings was subject to U.S. federal taxation with the one-time transition tax. With the exception of certain unremitted earnings in India and China, the Company asserted indefinite reinvestment on its unremitted earnings as well as any other additional outside basis differences of its foreign subsidiaries at December 31, 2022. Any future reversals could be subject to additional foreign withholding taxes, U.S. state taxes, and certain tax impacts relating to foreign currency exchange effects on any future repatriations of the unremitted earnings. The primary components of temporary differences that give rise to the Company’s net deferred tax liability as of December 31, 2022 and 2021 (Successor) consist of the following (in thousands):
|  | Successor |  |  | Successor |
|  | December 31, 2022 |  |  | December 31, 2021 |
Deferred tax assets: |  |  |  |  |  |
Federal net operating loss carryforwards |  | $ | 2,304 |  |  | $ | 25,227 |
State net operating loss carryforwards |  |  | 6,782 |  |  |  | 8,172 |
Foreign net operating loss carryforwards |  |  | 4,888 |  |  |  | 5,556 |
Deferred revenues |  |  | 205 |  |  |  | 172 |
Bad debt reserves |  |  | 297 |  |  |  | 203 |
Employee benefits |  |  | 1,563 |  |  |  | 3,118 |
Share-based compensation |  |  | 546 |  |  |  | 586 |
Accrued expenses and loss reserves |  |  | 1,802 |  |  |  | 2,346 |
Other deferred tax assets |  |  | 5,890 |  |  |  | 9,382 |
Less: Valuation allowances |  |  | (1,467 | ) |  |  | (2,367 | )
Total deferred tax asset |  | $ | 22,810 |  |  | $ | 52,395 |
Deferred tax liabilities: |  |  |  |  |  |
Trade name |  | $ | (17,632 | ) |  | $ | (19,809 | )
Goodwill |  |  | (11,703 | ) |  |  | (7,340 | )
Depreciable and other amortizable assets |  |  | (77,127 | ) |  |  | (107,080 | )
Other deferred liabilities |  |  | (4,482 | ) |  |  | (1,406 | )
Total deferred tax liability |  | $ | (110,944 | ) |  | $ | (135,635 | )
Net deferred tax liability |  | $ | (88,134 | ) |  | $ | (83,240 | )
As of December 31, 2022 and 2021 (Successor), the Company believes that federal, state, and foreign net operating loss carryforwards will be available to reduce future taxable income after taking into account various federal and foreign limitations on the utilization of such net operating loss carryforwards. The net operating loss carryforward balances as of December 31, 2022 and 2021 (Successor), are as follows (in thousands):
|  | Successor |  |  | Successor |
|  | December 31, 2022 |  |  | December 31, 2021 |
Federal |  | $ | 10,970 |  |  | $ | 120,130 |
State |  |  | 125,989 |  |  |  | 147,539 |
Foreign |  |  | 24,207 |  |  |  | 25,063 |
|  | $ | 161,166 |  |  | $ | 292,732 |
The Company has approximately $4.4 million and $5.0 million of research and development credit carryforwards as of December 31, 2022 and 2021 (Successor). The Company’s remaining research and development credit carryforwards will expire beginning in 2039. The Company believes that the research and development credit carryforwards will be utilized to reduce future tax liability before they expire. After consideration of all of the evidence, the Company has determined that a valuation allowance of approximately $1.5 million and $2.4 million is necessary as of December 31, 2022 and 2021 (Successor), respectively, primarily for certain foreign net operating loss carryforwards. The decrease in the valuation allowance in 2022 is primarily due to the utilization of some of the net operating loss carryforwards during the year and revaluation of the remaining net operating loss carryforwards at December 31, 2022. The Company is no longer subject to U.S. federal examinations by tax authorities for years before 2012, and state, local, and non-U.S. income tax examinations by tax authorities before 2005. The aggregate changes in the balance of our gross unrecognized tax benefits, excluding accrued interest, for the year ended December 31, 2022 (Successor), for the year ended December 31, 2021 (Successor), for the period from February 1, 2020 through December 31, 2020 (Successor), and for the period from January 1, 2020 through January 31, 2020 (Predecessor), were as follows (in thousands):
|  | Successor |  |  |  | Predecessor |
|  | Year Ended December 31, 2022 |  |  | Year Ended December 31, 2021 |  |  | Period from February 1, 2020 through December 31, 2022 |  |  |  | Period from January 1, 2020 through January 31, 2020 |
Balance, beginning of period |  | $ | 1,399 |  |  | $ | 1,341 |  |  | $ | 1,290 |  |  |  | $ | 1,296 |
Increases for tax positions related to prior years |  |  | 28 |  |  |  | 58 |  |  |  | 51 |  |  |  |  | 4 |
Decreases for tax positions related to prior years |  |  | (455 | ) |  |  | — |  |  |  | — |  |  |  |  | (10 | )
Balance, end of period |  | $ | 972 |  |  | $ | 1,399 |  |  | $ | 1,341 |  |  |  | $ | 1,290 |
An income tax benefit of approximately $1.0 million would be recorded if these unrecognized tax benefits are recognized. The Company believes it is reasonably possible that its liability for unrecognized tax benefits will decrease in the next twelve months. The Company recognizes accrued interest related to unrecognized tax benefits in interest expense and penalties in income tax expense.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI https://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration