Bristow Group Inc.VTOL

Bristow Group Inc. Income Taxes Disclosure

10-KFiled Feb 26, 20268 min read
INCOME TAXES
The Company recognizes deferred tax assets or liabilities for the differences between the financial statement carrying amount and tax basis of assets and liabilities using enacted tax rates in effect for the years in which the asset is expected to be recovered or the liability is expected to be settled.
The components of deferred tax assets and liabilities are as follows (in thousands):
December 31,
 20252024
Deferred tax assets:
Foreign tax credits$6,004 $6,275 
Net operating losses116,539 137,902 
Pension liability— 41 
Interest expense limitation65,108 53,572 
Accrued expenses not currently deductible24 12,682 
Lease liabilities80,506 87,778 
Other5,727 7,660 
Foreign currency adjustments11,974 — 
Gross deferred tax assets285,882 305,910 
Valuation allowance(97,766)(139,272)
Total deferred tax assets$188,116 $166,638 
Deferred tax liabilities:
Property and equipment$(97,338)$(92,505)
Accrued pension liability(2,897)— 
Inventories(925)(976)
Investment in foreign subsidiaries and unconsolidated affiliates(1,215)(2,764)
Right-of-use lease asset(80,576)(87,826)
Intangibles(9,199)(13,838)
Other354 17,692 
Total deferred tax liabilities$(191,796)$(180,217)
Net deferred tax liabilities$(3,680)$(13,579)
As of December 31, 2025, the Company had deferred tax assets of $42.9 million recorded in other assets on the consolidated balance sheets.
For U.S. income taxes, companies may use foreign tax credits to offset the income taxes due on income earned from foreign sources. The foreign tax credits claimed for a particular taxable year may be limited. Foreign tax credits may be carried back one year and forward ten years. As of December 31, 2025, the Company had $6.0 million of excess foreign tax credits, all of which will expire in 2026 and beyond.
As of December 31, 2025, the Company had $10.5 million of net operating loss carryforwards in the U.S. In addition, the Company has net operating losses in certain states totaling $558.7 million, which will begin to expire in 2026. The following table shows the expiration of such loss carryforwards (in thousands, except dates):
 December 31, 2025Expiration
Foreign tax credit carryforwards$6,0042028-2032
Foreign net operating loss carryforwards$390,102Indefinite
State net operating loss carryforwards$101,524Indefinite
State net operating loss carryforwards $457,2052026-2042
Section 163j interest expense $275,998Indefinite
The Company estimates the likelihood of the recoverability of its deferred tax assets. Any valuation allowance recorded is based on estimates and assumptions of taxable income in future periods and a determination is made of the magnitude of deferred tax assets which are more likely than not to be realized. If these estimates and related assumptions change in the future, the Company may be required to record additional valuation allowances against its deferred tax assets and its effective tax rate may increase which could result in a material adverse impact on the Company’s financial position and results of operations. Valuation allowances continue to be applied against certain deferred income tax assets where the Company has assessed that the realization of
such assets does not meet the “more likely than not” criteria. Total valuation allowances against net deferred tax assets were $97.8 million and $139.3 million as of December 31, 2025 and 2024, respectively. As of December 31, 2025, valuation allowances were $34.6 million for foreign operating loss carryforwards, $8.9 million for state operating loss carryforwards, $36.8 million for interest expense limitation carryforwards, $3.1 million for foreign tax credits and $1.0 million for capital loss carryforwards. As of December 31, 2024, valuation allowances were $62.3 million for foreign operating loss carryforwards, $26.1 million for state operating loss carryforwards, $28.2 million for interest expense limitation carryforwards and $3.2 million for foreign tax credits and $1.0 million for capital loss carryforwards.
The Company recorded $1.5 million of deferred taxes related to the change in estimated UK pension liabilities. This amount is reflected in other comprehensive income. During the year ended December 31, 2025, the Company utilized $31.0 million of net operating losses in various foreign jurisdictions and released through continuing operations an offsetting valuation allowance previously recorded against the net operating losses.
In July 2025, a new tax bill referred to as the One Big Beautiful Bill Act (“OBBBA”) was signed into law in the U.S. As part of the new tax law, the OBBBA extends key elements of the previous Tax Cuts and Jobs Act enacted on December 22, 2017, including the 21% U.S. Federal statutory tax rate, business interest expense deduction limits, 100% bonus depreciation, domestic research cost expensing, and various expiring international provisions, with certain modifications. Pursuant to ASC 740 - Income Taxes, changes in tax rates and tax law are required to be recognized in the period in which the legislation is enacted. The Company has completed its evaluation of the impact of this legislation and has determined that the OBBBA did not have a material impact on its 2025 financial statements.
The components of income (loss) before income taxes for the periods reflected in the table below were as follows (in thousands):
 Year Ended December 31, 2025Year Ended December 31, 2024Year Ended December 31, 2023
Domestic$45,739 $21,188 $(39,130)
Foreign105,497 80,875 57,142 
Income (loss) before income taxes$151,236 $102,063 $18,012 
The components of income tax expense for the periods reflected in the table below were as follows (in thousands):
 Year Ended December 31, 2025Year Ended December 31, 2024Year Ended December 31, 2023
Current:
Domestic$4,776 $12,839 $10,347 
Foreign27,051 14,314 13,916 
$31,827 $27,153 $24,263 
Deferred:
Domestic$10,464 $(14,519)$(2,568)
Foreign(20,482)(5,441)3,237 
$(10,018)$(19,960)$669 
Income tax expense$21,809 $7,193 $24,932 
    
The following table reflects information on the provision of income taxes and rate reconciliations in accordance with ASU 2023-09:
CategoryYear Ended December 31, 2025Effective Tax Rate
Federal statutory tax rate     31,760 21.0 %
State and local income taxes, net of federal income tax effect (1)
1,997 1.3 %
Foreign tax effects:
Australia
Nontaxable or nondeductible items(2,455)(1.6)%
Gain on sale of investment2,541 1.7 %
Valuation allowances(27,110)(17.9)%
Cayman Islands
Tax rate differential(3,212)(2.1)%
Ireland
Other(767)(0.5)%
Tax rate differential2,481 1.6 %
Netherlands
Transfer pricing(3,221)(2.1)%
Other573 0.4 %
Nigeria
Other3,199 2.1 %
Tax credits(3,248)(2.1)%
Tax rate differential4,068 2.6 %
Withholding tax2,326 1.5 %
Panama
Other(161)(0.1)%
Tax exempt interest(134,385)(88.9)%
Tax rate differential21,572 14.3 %
Trinidad and Tobago   
Other168 0.1 %
Tax rate differential2,132 1.4 %
United Kingdom (England, Northern Ireland, Scotland, and Wales)
Gain on sale of investment2,260 1.5 %
Other1,221 0.8 %
Pillar two top up tax1,715 1.1 %
Tax credits(2,640)(1.7)%
Tax exempt interest134,280 88.8 %
Tax rate differential(20,285)(13.4)%
  Other jurisdictions   2,201 1.5 %
Effect of cross-border tax laws
Forgone foreign tax credit3,265 2.2 %
Other711 0.5 %
Valuation allowances(1,735)(1.2)%
Nontaxable or nondeductible Items3,236 2.1 %
Other adjustments(676)(0.5)%
Total21,809 14.4 %
(1)For the year ended December 31, 2025, state and local income taxes are primarily related to the state of Louisiana.
Below is a reconciliation of the statutory federal income tax expense and the Company’s total tax expense for years ended December 31, 2023 and 2024:
 Year Ended December 31, 2024Year Ended December 31, 2023
Statutory rate21.0 %21.0 %
Net foreign tax on non-U.S. earnings0.9 %15.5 %
Foreign earnings double tax relief(8.0)%(9.5)%
Foreign earnings indefinitely reinvested abroad— %(3.4)%
Change in valuation allowance(3.5)%(23.6)%
Foreign earnings that are currently taxed in the U.S.— %7.4 %
Changes in prior year estimates(0.3)%— %
Impact of U.S. withholding tax10.6 %2.2 %
Impact of tax rate changes2.9 %2.6 %
Foreign tax credits12.9 %76.5 %
Deferred gains(3.1)%7.9 %
GILTI income0.9 %19.8 %
Other, net(27.2)%22.0 %
Effective tax rate7.1 %138.4 %
The Company is domiciled in the U.S. and is a U.S. tax resident. Its subsidiaries conduct operations and earn income in numerous countries and are subject to the laws of taxing jurisdictions within those countries. During the year ended December 31, 2025, the Company recorded a total income tax provision of $21.8 million on pre-tax income of $151.2 million, resulting in an effective tax rate of 14.4%. The effective tax rate for 2025 was primarily impacted by our geographic mix of earnings and changes of valuation allowances on some of our deferred tax assets, mainly attributable to Australia.

For the year ended December 31, 2025, the Company did not experience any expiration of foreign tax credits. The Company remains focused on reviewing and implementing tax strategies that enhance the effective use of foreign tax credits while seeking to prevent potential expirations.
The Company’s 2024 consolidated effective income tax rate includes other, net discrete tax benefits of 18.4% from currency translation adjustments, a release of an unrecognized tax benefit of 4.0% due to the expiration of the statute of limitation on uncertain tax positions in foreign jurisdictions and a 7.8% tax benefit associated with adjustments to deferred tax balances.
The Company’s 2023 consolidated effective income tax rate includes $15.6 million of expired foreign tax credits in the U.S. due to the 10-year carryforward limitation. However, there was a corresponding valuation allowance released, which fully offset the impact of the effective income tax rate in the change in valuation allowances. The Company’s 2023 consolidated effective income tax rate includes other, net tax expense of 5.8% from imputed interest, UK disallowed interest of 8.6% and non-deductible expenses of 5.3%.
The Company files income tax returns in the U.S. federal jurisdiction, various states and foreign jurisdictions. The Company is currently undergoing multiple tax examinations in various jurisdictions in which it operates. The ultimate settlement and timing of these additional potential tax assessments is uncertain, but the Company will continue to vigorously defend its return filing positions and does not view additional assessments as probable at this time.
The following table summarizes the years open by jurisdiction as of December 31, 2025:
 Years Open
U.S.2022 to present
UK2024 to present
Nigeria2015 to present
Guyana2015 to present
Trinidad2019 to present
Australia2021 to present
Norway2020 to present
Brazil2021 to present
During the year ended December 31, 2025, no adjustments were made to estimates for uncertain tax positions based upon changes in facts and circumstances. As of December 31, 2025 and 2024, the Company had $0.1 million and $0.1 million, of unrecognized tax benefits, respectively, which would not have a material impact on its effective tax rate, if recognized.
The activity associated with unrecognized tax benefit for the periods reflected in the table below was follows (in thousands):
 Year Ended December 31, 2025Year Ended December 31, 2024Year Ended December 31, 2023
Unrecognized tax benefits – beginning of period$100 $4,173 $4,067 
Increases for tax positions taken in prior periods— — 106 
Decrease related to statute of limitation expirations— (4,073)— 
Unrecognized tax benefits – end of period$100 $100 $4,173 
As of December 31, 2025, the Company had aggregated approximately $410.7 million in unremitted earnings generated by foreign subsidiaries. The Company expects to indefinitely reinvest these earnings and has not provided deferred taxes on these unremitted earnings. If the Company’s expectations were to change, withholding and other applicable taxes incurred upon repatriation, if any, are not expected to have a material impact on its results of operations.
The following table presents income taxes paid (net of refunds received) for the year ended December 31, 2025 (in thousands):
Jurisdiction2025 Actual% of Total
Nigeria$8,613 32 %
US13,407 50 %
Trinidad1,946 7 %
Falkland Islands1,370 5 %
Other1,382 5 %
Total$26,718 100 %

Historical Timeline

Fiscal YearFiled
2025Feb 26, 2026Showing above
2024Feb 27, 2025
2023Mar 6, 2024
2019Mar 6, 2020
2018Mar 8, 2019
2017Mar 9, 2018
2016Mar 9, 2017
2015Feb 26, 2016

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.

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