Company: TDDWW
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0001437749-25-005487
Chunk: 445

Company: TIDEWATER INC
Filing Date: 2025-02-27
Form: 10-K
Item: Item 1
Chunk 445
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 of non-U.S. foreign tax credits as of  December 31, 2024.
    
   IRC Sections 382 and 383 provide an annual limitation with respect to the ability of a corporation to utilize its tax attributes, as well as certain built-in-losses, against future U.S. taxable income in the event of a change in ownership. Our emergence from Chapter 11 bankruptcy proceedings in 2017 is considered a change in ownership for purposes of IRC Section 382. The Company’s annual limitation under the IRC is approximately $15.0 million which is based on our value as of the ownership change date. In addition, the merger with GulfMark in 2018 resulted in a change in ownership of GulfMark for purposes of IRC Section 382. The GulfMark ownership change results in an annual limitation of approximately $5.6 million on GulfMark’s tax attributes generated prior to the ownership change date, which begin to expire in 2035. The Company has recorded a valuation allowance on the net operating loss balance as it believes that it is more likely than not that the deferred tax asset will not be realized.
    
   Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit the use of the existing deferred tax assets. 

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   Based on this evaluation, for the period ended  December 31, 2024, a valuation allowance of $533.0 million was recorded against our net deferred tax asset. For the period ended  December 31, 2023, a valuation allowance of $591.7 million was recorded against our net deferred tax asset. The decrease in the valuation allowance was primarily attributable to the current year utilization of U.S. net operating losses (NOLs) and the foreign currency revaluation for foreign NOLs. Our ability to utilize U.S. NOLs in the current year was primarily driven by activity in international jurisdictions that generated income subject to U.S. tax. Our ability to utilize U.S. NOLs in future periods is likely to be impacted by the extent to which we will generate such income in future periods which will be influenced by a variety of factors including the jurisdictions in which our vessels operate and the extent to which we are impacted by various global minimum tax initiatives that are adopted in those jurisdictions. The amount of the deferred tax asset considered realizable could be adjusted if estimates of future U.S. and foreign taxable income during the carryforward period increased or if