New Fortress Energy Inc.NFE
New Fortress Energy Inc. Income Taxes Disclosure
24. Income Taxes (As Restated)
The components of the Company’s income (loss) before income taxes for the years ended December 31, 2025, 2024 and 2023 were as follows:
Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 (As Restated) | 2023 (As Restated) | |||||||||||||||
| United States | $ | (454,662) | $ | (146,909) | $ | 271,781 | |||||||||||
| Foreign | (1,315,941) | (27,320) | 379,415 | ||||||||||||||
| Income before taxes | $ | (1,770,603) | $ | (174,229) | $ | 651,196 | |||||||||||
Income tax expense is comprised of the following for the years ended December 31, 2025, 2024 and 2023:
Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 (As Restated) | 2023 (As Restated) | |||||||||||||||
| Current: | |||||||||||||||||
| Domestic | $ | (646) | $ | 42,521 | $ | 40,916 | |||||||||||
| Foreign | 36,149 | 31,119 | 48,244 | ||||||||||||||
| Total current tax expense | 35,503 | 73,640 | 89,160 | ||||||||||||||
| Deferred: | |||||||||||||||||
| Domestic | 11,024 | (8,436) | 1,088 | ||||||||||||||
| Foreign | 14,823 | 5,104 | 12,724 | ||||||||||||||
| Total deferred tax (benefit) expenses | 25,847 | (3,332) | 13,812 | ||||||||||||||
| Total provision for (benefit from) income taxes | $ | 61,350 | $ | 70,308 | $ | 102,972 | |||||||||||
Effective Tax Rate
Upon the adoption of ASU 2023-09, as described in Note 5, the reconciliation of taxes at the federal statutory rate to our provision for (benefit from) income taxes for the year ended December 31, 2025 was as follows:
| Year Ended December 31, | ||||||||
| 2025 | ||||||||
| U.S. Federal Statutory Tax Rate | (371,826) | 21.0 | % | |||||
| State and Local Income Taxes, Net of Federal Income Tax Effect | 644 | — | ||||||
| Effect of Cross-Border Tax Laws | 11,308 | (0.6) | ||||||
| Changes in Valuation Allowance | 126,824 | (7.2) | ||||||
| Other | ||||||||
| Gain on Disposal of Business | 32,460 | (1.8) | ||||||
| Loss from Taxable Liquidation of Subsidiary | (69,797) | 3.9 | ||||||
| Others | 2,146 | (0.1) | ||||||
| Foreign Tax Effects | ||||||||
| BERMUDA | ||||||||
| Statutory Tax Rate Difference between Bermuda and United States | 31,103 | (1.8) | ||||||
| Impairment | 85,193 | (4.8) | ||||||
| Other | (9) | — | ||||||
| BRAZIL | ||||||||
| Nontaxable or Nondeductible Items | (25,923) | 1.5 | ||||||
| Valuation Allowance | 17,853 | (1.0) | ||||||
| Other | 33,097 | (1.9) | ||||||
| MEXICO | ||||||||
| Nontaxable or Nondeductible items | 37,535 | (2.1) | ||||||
| Valuation Allowance | 2,736 | -0.2 | ||||||
| Other | (567) | — | ||||||
| UNITED KINGDOM | ||||||||
| Statutory Tax Rate Difference between United Kingdom and United States | (25,165) | 1.4 | ||||||
| Impairment | 155,405 | (8.8) | ||||||
| Other | 18,590 | (1.0) | ||||||
| OTHER FOREIGN JURISDICTIONS | (1,656) | 0.1 | ||||||
| Changes in Unrecognized Tax Benefits | 1,399 | (0.1) | ||||||
| Grand Total | $ | 61,350 | (3.5) | % | ||||
The reconciliation of taxes at the federal statutory rate to our provision for (benefit from) income taxes for the years ended December 31, 2024 and 2023 in accordance with the guidance prior to the adoption of ASU 2023-09 was as follows:
Year Ended December 31, | ||||||||||||||
| 2024 (As Restated) | 2023 (As Restated) | |||||||||||||
| Income tax at the statutory rate | 21.0 | % | 21.0 | % | ||||||||||
| Foreign tax rate differential | 69.0 | (12.5) | ||||||||||||
| US taxation on foreign earnings | (7.4) | (0.6) | ||||||||||||
| Impact from foreign operations | 8.7 | — | ||||||||||||
| Change in valuation allowance | (152.7) | 8.6 | ||||||||||||
| Effects of share-based compensation | (3.0) | 0.3 | ||||||||||||
| Withholding taxes | — | 0.6 | ||||||||||||
| Income tax credits | 9.3 | (4.9) | ||||||||||||
| Outside basis differences | — | 0.1 | ||||||||||||
| Changes in deferred taxes and payable | 13.9 | — | ||||||||||||
| Other | 0.8 | 3.3 | ||||||||||||
| Effective income tax rate | (40.4 | %) | 15.8 | % | ||||||||||
The Company has certain operations in jurisdictions that are not subject to income taxes or are subject to preferential tax rates. The effect of these earnings taxed at zero percent, as well as the impact of such preferential tax rates, are included in the foreign rate differential.
On July 4, 2025, the One Big Beautiful Bill Act (the “Tax Act of 2025”) was enacted. The Tax Act of 2025 includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework, and the restoration of favorable tax treatment of certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The Company has evaluated the provisions of the Tax Act of 2025 that could have an impact on the Company’s provision for the year ended December 31, 2025 related to Section 163(j), and such provisions have no impact to the effective tax rate for the year ended December 31, 2025.
The Organization for Economic Cooperation and Development (OECD) released the Pillar Two model rules to reform international corporate taxation that aim to ensure that applicable multinationals pay a minimum global effective tax rate of 15%. The rules are passed into national legislation based on each country’s approach, and some countries already enacted or substantively enacted the rules. The Company continues to assess the effective tax rate and cash tax impact for Pillar Two in light of legislative changes in multiple countries. During 2025, the Company incurred $8,632 of tax expense related to its Pillar Two obligations as a period cost and included such expenses as part of the consolidated annual effective tax rate.
Upon adoption of ASU 2023-09 as described in Note 5, cash paid for income taxes, net of refunds, during the year ended December 31, 2025 was as follows:
Year Ended December 31, | |||||
| 2025 | |||||
| Domestic Federal | $ | 44,172 | |||
| Domestic State | 477 | ||||
| Foreign | |||||
| Brazil | 17,083 | ||||
| Jamaica | 11,604 | ||||
| Puerto Rico | 32,467 | ||||
| Other | 3,288 | ||||
| Total Foreign | 64,442 | ||||
| Total | $ | 109,091 | |||
Income tax paid were $27,932 and $52,897 for the years ended December 31, 2024 and 2023, respectively.
The tax effect of each type of temporary difference and carryforward that give rise to a significant deferred tax asset or liability as of December 31, 2025 and 2024 are as follows:
Year Ended December 31, | |||||||||||
| 2025 | 2024 (As Restated) | ||||||||||
| Deferred tax assets: | |||||||||||
| Accrued interest | $ | — | $ | 40,255 | |||||||
| IRC Section 163(j) interest carryforward | 154,086 | 27,533 | |||||||||
| Federal and state net operating loss carryforward | 55,485 | 1,904 | |||||||||
| Foreign net operating loss carryforward | 246,308 | 253,337 | |||||||||
| Debt | 140,555 | 264,460 | |||||||||
| Lease liability | 346,578 | 316,896 | |||||||||
| Goodwill | 38,901 | 43,004 | |||||||||
| Other | 50,767 | 78,189 | |||||||||
| Total deferred tax assets | 1,032,680 | 1,025,578 | |||||||||
| Valuation allowance | (549,493) | (449,819) | |||||||||
| Deferred tax assets, net of valuation allowance | 483,187 | 575,759 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Property and equipment | (139,492) | (277,109) | |||||||||
| Right-of-use assets | (300,996) | (285,870) | |||||||||
| Investments | (11,671) | — | |||||||||
| Intangibles | (50,156) | (46,258) | |||||||||
| Capitalized costs | (40,424) | (20,514) | |||||||||
| Other | (16,950) | (17,522) | |||||||||
| Total deferred tax liabilities | $ | (559,689) | $ | (647,273) | |||||||
| Net deferred tax liabilities | $ | (76,502) | $ | (71,514) | |||||||
Tax Attributes
United States
As of December 31, 2025, NFE has approximately $261,466 of federal and $4,867 of state net operating loss carry forwards. The federal and state net operating losses are generally allowed to be carried forward indefinitely and can offset up to 80 percent of future taxable income.
Under the provisions of Internal Revenue Code Section 382, certain substantial changes in the Company’s ownership may result in a limitation on the amount of U.S. net operating loss carryforwards that can be utilized annually to offset future taxable income and taxes payable. The Company’s net operating loss carryforwards are subject to an annual limitation of $5,431 under Section 382 of the Internal Revenue Code.
Foreign Jurisdictions
The Company’s foreign subsidiaries file income tax returns in certain foreign jurisdictions. As of December 31, 2025, the Company’s foreign subsidiaries have approximately $983,111 of net operating loss carry forwards, of which $320,558 will expire, if unused between 2028 and 2041, and the remaining $662,553 are allowed to be carried forward indefinitely.
Valuation Allowances
The following table summarizes the changes in the Company’s valuation allowance on deferred tax assets for the years ended December 31, 2025 and 2024:
Year Ended December 31, | |||||||||||
| 2025 | 2024 (As Restated) | ||||||||||
| Balance at the beginning of the period | $ | 449,819 | $ | 189,690 | |||||||
| Change in valuation allowance | 99,674 | 260,129 | |||||||||
| Balance at the end of the period | $ | 549,493 | $ | 449,819 | |||||||
The change in valuation allowance was mainly due to net operating losses, increase in deferred tax asset related to interest expense disallowance under section 163(j) in the U.S. and increase in net operating losses in foreign jurisdictions for the year ended December 31, 2025.
NFE recorded a valuation allowance against its US federal and state deferred tax assets to reduce the net carrying value to an amount that it believes is more likely than not to be realized. The Company concluded, based on the weight of all available positive and negative evidence, those deferred tax assets are not more likely than not to be realized and accordingly, a valuation allowance has been recorded on this deferred tax asset for the amount not supported by reversing taxable temporary differences. The Company recorded a valuation allowance against foreign deferred tax assets to reduce the net carrying value to an amount that it believes is more likely than not to be realized.
Uncertain Taxes
The following table summarizes the changes in the Company’s unrecognized tax benefits for the years ended December 31, 2025 and 2024:
Year Ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Balance at the beginning of the period | $ | — | $ | — | |||||||
| Recognized in the income tax provision | 15,943 | — | |||||||||
| Balance at the end of the period | $ | 15,943 | $ | — | |||||||
Income Tax Examinations
The Company and its subsidiaries file income tax returns in the U.S. federal and various state and local jurisdictions, as well as various foreign jurisdictions. The U.S. Federal and state income tax returns filed for tax years 2022, 2023 and 2024 are open for examination. The Company is generally open to tax examinations in other foreign jurisdictions for a period of to six years from the filing of the income tax return.
Undistributed Earnings
The Company has not recorded a deferred tax liability for undistributed earnings for any controlled foreign corporation as of December 31, 2025 and 2024. The Company has unremitted earnings in certain jurisdictions where distributions can be made at no net tax cost. From time to time, the Company may remit these earnings. The Company has the ability and intent to indefinitely reinvest any earnings that cannot be remitted at no net tax cost. It is not practicable to estimate the amount of any additional taxes which may be payable on these undistributed earnings.
Preferential Tax Rates
The Company has subsidiaries incorporated in Bermuda. Under prior Bermuda law before the Bermuda Corporate Income Tax Act 2023, the Company was not required to pay taxes in Bermuda on either income or capital gains. The Company has received an undertaking from the Bermuda government that, in the event of income or capital gain taxes being imposed, it will be exempted from such taxes until 2035. On December 27, 2023, Bermuda enacted the Bermuda Corporate Income
Tax Act 2023, which institutes a corporate income tax rate of 15% effective for tax years beginning January 1, 2025. As a result, such tax exemptions will not be valid beyond such subsidiaries’ taxable year ended December 31, 2024, the impact of which has been included in the tax provision and was not material.
Certain of the Company’s Puerto Rican subsidiaries received tax decrees from the Puerto Rico government that affords such subsidiaries a 4% tax rate on qualifying income. The effect of the earnings taxed at a 4% foreign tax rate is included in the foreign rate differential line in the Company’s effective tax rate. For the years ended December 31, 2025 and 2024, the income tax benefits attributable to the tax decrees, before taking into consideration the impact on U.S. taxation and the associated U.S. foreign tax credits, are estimated to be approximately $27,823 ($(0.10) per share of issued and outstanding Class A common stock on a diluted basis) and $142,776 ($(0.65) per share of issued and outstanding Class A common stock on a diluted basis), respectively.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Apr 13, 2026 | Showing above |
| 2024 | Mar 10, 2025 | |
| 2023 | Feb 29, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Mar 1, 2022 | |
| 2020 | Mar 16, 2021 | |
| 2019 | Mar 4, 2020 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.