Income Taxes (Tables)
|
12 Months Ended |
Dec. 31, 2025 |
|---|
| Income Tax Disclosure [Abstract] |
|
| Schedule of components of net income before income taxes |
The components of net income before income taxes consist of the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
2025 |
|
2024 |
|
2023 |
Bermuda |
|
$ |
401,869 |
|
$ |
— |
|
$ |
— |
Foreign |
|
|
26,852 |
|
|
772,907 |
|
|
163,176 |
Net income before income taxes |
|
$ |
428,721 |
|
$ |
772,907 |
|
$ |
163,176 |
|
| Schedule of components of the provision for income taxes |
The components of the provision for income taxes consisted of the following benefit (expense) (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
2025 |
|
2024 |
|
2023 |
Current: |
|
|
|
|
|
|
|
|
|
Bermuda |
|
$ |
— |
|
$ |
— |
|
$ |
— |
Foreign |
|
|
|
|
|
|
|
|
|
United States - Federal and state |
|
|
1,876 |
|
|
(5,752) |
|
|
20 |
Other |
|
|
(3,007) |
|
|
(13,046) |
|
|
2,850 |
Total current: |
|
|
(1,131) |
|
|
(18,798) |
|
|
2,870 |
Deferred: |
|
|
|
|
|
|
|
|
|
Bermuda |
|
|
— |
|
|
— |
|
|
— |
Foreign |
|
|
|
|
|
|
|
|
|
United States - Federal and state |
|
|
(4,951) |
|
|
156,495 |
|
|
104 |
Other |
|
|
607 |
|
|
(347) |
|
|
28 |
Total deferred: |
|
|
(4,344) |
|
|
156,148 |
|
|
132 |
Income tax benefit (expense) |
|
$ |
(5,475) |
|
$ |
137,350 |
|
$ |
3,002 |
|
| Schedule of reconciliation of income tax benefit (expense) |
Our reconciliation of income tax expense computed by applying our Bermuda statutory rate and reported income tax benefit (expense) was as follows for the year ended December 31, 2025 (in thousands):
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2025 |
|
|
Amount |
|
Percent |
Tax at Bermuda statutory rate |
|
$ |
(64,308) |
|
|
15 |
% |
Nontaxable or nondeductible items |
|
|
|
|
|
|
|
International shipping income exclusion (1) |
|
|
141,821 |
|
|
(33) |
|
Foreign tax effects |
|
|
|
|
|
|
|
United States |
|
|
|
|
|
|
|
U.S.-source shipping income not exempt under Section 883 (2) |
|
|
(6,291) |
|
|
1 |
|
Other foreign income taxed at different rates |
|
|
816 |
|
|
— |
|
Change in valuation allowance |
|
|
(79,579) |
|
|
19 |
|
Other adjustments |
|
|
2,066 |
|
|
(1) |
|
Income tax benefit (expense) |
|
$ |
(5,475) |
|
|
1 |
% |
| (1) |
The international shipping income exclusion exempts 100% of shipping income from taxation. Net income before income taxes includes both shipping and non-shipping income. After an allocation of deductible indirect costs between shipping and non-shipping income, the exclusion of the exempt shipping income from taxable income resulted in a loss for income tax purposes related to non-exempt income.
|
| (2) |
The tax benefit associated with U.S.-source shipping income exempt under Section 883 was approximately $60 million.
|
Our reconciliation of income tax benefit (expense) computed by applying our Bermuda statutory rate and reported income tax benefit (expense) was as follows for the years ended December 31, 2024 and 2023 (in thousands):
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
2024 |
|
2023 |
Tax at Bermuda statutory rate |
|
$ |
— |
|
$ |
— |
Foreign income taxes at different rates |
|
|
(29,429) |
|
|
(3,610) |
Tax contingencies |
|
|
320 |
|
|
— |
Return to provision adjustments |
|
|
2,272 |
|
|
8,959 |
Change in tax laws |
|
|
15,389 |
|
|
532,387 |
Valuation allowance |
|
|
148,798 |
|
|
(534,734) |
Income tax benefit (expense) |
|
$ |
137,350 |
|
$ |
3,002 |
|
| Schedule of deferred tax assets and liabilities |
Deferred tax assets and liabilities were as follows (in thousands):
|
|
|
|
|
|
|
|
|
As of December 31, |
|
|
2025 |
|
2024 |
Deferred tax assets: |
|
|
|
|
|
|
Loss carryforwards |
|
$ |
812,878 |
|
$ |
729,735 |
Other |
|
|
38,728 |
|
|
38,451 |
Valuation allowance |
|
|
(638,234) |
|
|
(558,690) |
Total net deferred assets |
|
|
213,372 |
|
|
209,496 |
Deferred tax liabilities: |
|
|
|
|
|
|
Property and equipment |
|
|
(58,319) |
|
|
(53,605) |
Total deferred tax liabilities |
|
|
(58,319) |
|
|
(53,605) |
Net deferred tax asset |
|
$ |
155,053 |
|
$ |
155,891 |
|