v3.26.1
Taxes
 3 Months Ended
Mar. 31, 2026
Income Tax Disclosure [Abstract]  
Taxes Taxes
Plan Effective Date
As part of the Chapter 11 Cases, the Company’s prepetition funded debt was extinguished. The Internal Revenue Code of 1986, as amended (the “Code”), provides that a debtor in a bankruptcy case may exclude cancellation of debt income (“CODI”) from taxable income but must reduce certain of its tax attributes by the amount of any CODI realized as a result of the consummation of a plan of reorganization. The amount of the Company’s CODI was estimated to be $171.3 million. As a result, the Company’s current U.S. federal net operating loss (“NOL”) and loss carryforwards will be reduced by this amount. The reductions in NOL carryforwards for the CODI are expected to be fully offset by a corresponding decrease to the Company’s valuation allowance. Some states have similar rules for attribute reduction, which will result in the reduction of certain of the Company’s state NOL carryforwards. The reductions in state NOL carryforwards are also expected to be fully offset by a corresponding decrease in the Company’s state valuation allowance.
As a result of the emergence from bankruptcy, on the Plan Effective Date, the Company experienced an ownership change under Section 382 of the Code (“Section 382”), which is anticipated to subject certain remaining tax attributes to an annual limitation under Section 382.
As of the Plan Effective Date, the Company had recorded a full valuation allowance against its net deferred tax assets and continued to record a full valuation allowance as of March 31, 2026.
Provision (Benefit) for Income Taxes
The Company’s provision (benefit) for income taxes included in its Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) was as follows:
SuccessorPredecessor
Period from March 6, 2026 through March 31, 2026Period from January 1, 2026 through March 5, 2026Three Months Ended March 31, 2025
(in thousands, except percentages)(in thousands, except percentages)
Provision (benefit) for income taxes$(91)$109 $115 
Effective tax rate6.8 %0.1 %(1.7)%
The income tax provision recorded for the 2026 Predecessor Period was determined based on actual results for the period, including those resulting from reorganization adjustments and fresh start accounting. Any changes to deferred tax assets and liabilities for the 2026 Predecessor Period (whether resulting from reorganization adjustments, fresh start adjustments or otherwise) were fully offset with a corresponding adjustment to valuation allowance. The resulting tax provision for the 2026 Predecessor Period was primarily attributed to state and non-U.S. income taxes.
The effective tax rate for interim periods is determined using an annualized effective tax rate (“AETR”), adjusted for discrete items. For the 2026 Successor Period, the Company estimated its AETR in recording its interim income tax provision for the various jurisdictions in which it operates. The application of the AETR to the 2026 Successor Period resulted in a tax benefit, primarily attributed to state and non-U.S. income taxes.