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Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes
20. Income Taxes
Loss from continuing operations before income tax consisted of the following:
Year Ended December 31,
 202420232022
United States$(8,590)$(65,413)$(53,012)
Foreign(40,610)(67,061)29,190 
Loss from continuing operations before income tax
$(49,200)$(132,474)$(23,822)
Income Tax (Expense) Benefit from Continuing Operations
Income tax (expense) benefit from continuing operations consisted of the following:
Year Ended December 31,
 202420232022
Current tax (expense) benefit:
Federal$981 $1,623 $2,815 
Foreign(1,468)3,119 (7,511)
State and other(191)(144)(154)
Total current(678)4,598 (4,850)
Deferred tax (expense) benefit:
Federal6,011 15,542 6,635 
Foreign3,086 12,028 (2,842)
State and other509 143 155 
Total deferred9,606 27,713 3,948 
Income tax (expense) benefit$8,928 $32,311 $(902)
The following table reconciles the effective income tax rate on continuing operations to the U.S. federal statutory rate:
Year Ended December 31,
 202420232022
U.S. federal statutory income tax rate21.0 %21.0 %21.0 %
Change in valuation allowance(11.5)(7.7)(38.2)
Adjustment to previously filed tax returns(0.4)2.0 11.3 
Tax credits (excluding foreign tax credit) 4.1 5.4 17.8 
Nondeductible compensation for executives and share-based awards(3.4)0.5 (10.5)
Net changes in uncertain tax positions6.3 (0.1)(5.6)
Difference in foreign statutory rates1.2 2.1 (8.2)
U.S. tax on foreign earnings (GILTI and Subpart F, net of FTC)(0.4)(0.1)(0.9)
Interest on tax payments/receipts1.1 0.6 10.1 
Other0.1 0.7 (0.6)
Effective income tax rate on continuing operations18.1 %24.4 %(3.8)%
Deferred Taxes
Deferred income taxes result from recording revenue and expense in different periods for financial reporting versus tax reporting. The nature of these temporary differences and the resulting net deferred tax balances follow:
December 31,
 20242023
Deferred tax assets:
Net operating losses(a)
$157,942 $116,353 
Canadian pool of SR&ED(a)
96,458 96,113 
Property, plant and equipment basis differences74,408 123,521 
Tax credit carryforwards(a)
71,013 71,741 
Environmental liabilities39,316 39,258 
Deferred U.S. interest deductions(a)
36,286 33,188 
Pension, postretirement and other employee benefits19,534 25,114 
Capitalized costs18,275 19,868 
Deferred foreign interest deductions(a)
7,601 3,290 
Other compensation7,050 5,412 
State net operating losses(a)
3,454 3,536 
Other deferred tax assets23,636 21,003 
Total gross deferred tax assets554,973 558,397 
Valuation allowance(a)
(86,082)(78,858)
Total deferred tax assets, net of valuation allowance468,891 479,539 
Deferred tax liabilities:
Property, plant and equipment basis differences(110,577)(115,315)
Prepaid expenses(4,487)(19,253)
Intangible assets(2,326)(4,377)
Other deferred tax liabilities(15,686)(10,603)
Total deferred tax liabilities(133,076)(149,548)
Net deferred tax asset$335,815 $329,991 
Net deferred tax asset as reflected in consolidated balance sheets:
Deferred tax assets$349,500 $345,181 
Deferred tax liabilities(13,685)(15,190)
$335,815 $329,991 
(a)Further detail of these items as of December 31, 2024 follows:
Gross AmountTax EffectedValuation AllowanceExpiration
Foreign R&D credit carryforwards$31,212 $31,212 $(31,212)2025-2042
U.S. tax credit carryforwards44,924 39,801 (19,270)2025-2033
State net operating losses74,124 3,454 (1,792)2025-2044
Canada non-capital losses626,536 141,987 (1,739)2027-2043
Other foreign net operating losses14,828 3,827 (1,998)2040-None
Canada pool of SR&ED417,988 96,458 — None
U.S. interest limitation carryforward164,938 36,286 (22,470)None
U.S. federal net operating losses57,750 12,128 — None
Foreign interest limitation carryforward30,479 7,601 (7,601)None
At both December 31, 2024 and 2023, the Company’s net DTA included $15 million of disallowed U.S. interest deductions that the Company does not believe will be realized. In strict compliance with the AICPA’s Technical Questions and Answers 3300.01-02, which asserts that certain material evidence regarding the realizability of disallowed U.S. interest deductions should be ignored when assessing the need for a valuation allowance, the Company has not recognized a valuation allowance on this portion of the DTA generated from disallowed interest.
The Company’s financial statements reflect the above net DTA under the assumption that it will generate sufficient taxable income in the applicable tax jurisdictions to realize the benefit of the net DTA. If the Company is unable to generate sufficient taxable income, it may be required to record a valuation allowance against its DTAs. Guidance requires certain evidence be given heavy consideration, including whether the Company has incurred cumulative income or losses in recent years. If the Company incurs adjusted losses in certain jurisdictions over a period, generally three years, it could be required to derecognize a material balance of its DTAs. The vast majority of the Company’s DTAs are in Canada, with $334 million and $333 million of net DTAs recognized on the consolidated balance sheets as of December 31, 2024 and 2023, respectively.
Unrecognized Tax Benefits
The Company recognizes the impact of a tax position if it is more likely than not to prevail, based on technical merit, in the case of an audit. As of December 31, 2024, several positions resulted in unrecognized tax benefits that, if recognized, would affect income tax expense. A reconciliation of beginning and ending unrecognized tax benefits balances follows:
Year Ended December 31,
 202420232022
Balance at beginning of period$13,580 $11,015 $12,073 
Decreases related to prior year tax positions(3,035)(1,612)(255)
Increases related to prior year tax positions905 2,804 440 
Decreases related to current year tax positions— — (2,386)
Increases related to current year tax positions957 1,373 1,143 
Decreases due to statutory expirations(1,963)— — 
Balance at end of period$10,444 $13,580 $11,015 
For the years ended December 31, 2024 and 2023, all unrecognized tax benefits would impact the effective tax rate if recognized. For the year ended December 31, 2022, $13 million of the Company’s unrecognized tax benefits would impact the effective tax rate if recognized as a result of a $2 million reduction in unrecognized tax benefits that would impact only the timing of tax deductions and would not impact the tax rate. Total interest and penalties recorded in unrecognized tax benefits were $1 million for each of the years presented.
As of December 31, 2024, it is reasonably possible that the Company’s unrecognized tax position will change within a range of a decrease of $3 million and an increase of $3 million due to conclusions of tax audits or the expiration of statute of limitations.
Tax Statutes
In the normal course of business, the Company is regularly audited by tax authorities and is currently under audit in the U.S. and Canada. The following table provides the tax years that remain open to examination by significant taxing jurisdictions:
Open Tax Years
U.S.2020-2024
France2021-2024
Canada2020-2024
Other Tax Items
Several provisions passed in 2017 as part of the Tax Cuts and Jobs Act went into effect in 2022. Certain of these provisions negatively impact the Company’s U.S. cash taxes in present and future years. The most impactful of these provisions is the further limitation of U.S. interest deductibility under Internal Revenue Code §163(j). Under this section, companies may only deduct U.S. interest expenses up to a portion of ATI. Beginning in 2022, ATI was reduced from a tax EBITDA measurement to tax EBIT, which resulted in a significant decrease in U.S. interest deductibility. Additional provisions that impact the Company’s U.S. taxes include the requirement to capitalize and amortize research expenditures and the phase-out of immediate expensing of U.S. capital asset additions.