CW 2020 Annual Report

As of December 31, 2020, and 2019, the Company has accumulated $5.6 billion and $6.5 billion of undistributed earnings. These earnings do not meet the indefinite reinvestment criteria because the Company does not intend to permanently reinvest such earnings. The deferred tax liability of $15.9 million as of December 31, 2020 relates to income taxes and withholding taxes on potential future distributions of cash balances in excess of working capital requirements. As of December 31, 2020, and 2019, the Company had available operating loss carryforwards of $211.8 million and $149.5 million, respectively, which will begin to expire in 2021, and foreign tax credit carryforwards of $12.2 million and $4.0 million, respectively. The Company also had a U.S. interest expense disallowance carryforward of $22.9 million and $76.8 million as of December 31, 2020 and 2019, respectively, which has an indefinite carryforward. The change in deferred tax balances for operating loss carryovers from 2019 to 2020 includes increases from current year losses and decreases from current year utilization. The jurisdictional location of the operating loss carryforward is broken out as follows: As of December 31, 2020 Range of expiration dates United States $ 61.4 2021 - Indefinite All other countries 150.4 2021 - Indefinite Total $ 211.8 Valuation allowances have been provided regarding the tax benefit of certain net operating loss, interest expense disallowance, and tax credit carryforwards, for which it has been concluded that it is more likely than not that the deferred tax asset will not be realized. Management assesses the positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative loss incurred over a three-year period ended December 31, 2020. Such objective evidence limits the ability to consider other subjective evidence, such as the Company's projections for future growth. Based on this evaluation, valuation allowances were increased in 2020 by $67.4 million overall, primarily driven by the global operating loss, other tax attributes, and deferred tax assets resulting from temporary differences that will not be realized in jurisdictions including U.S., U.K., and Australia. Note 12: Stock-based Payments In May 2015, the Company adopted the MEIP, which authorized an unspecified number of equity awards for the Company’s ordinary shares to be granted to certain senior executives and management. The Company also issues individual grants of share-based compensation awards, subject to board approval, for purposes of recruiting and as part of its overall compensation strategy. The Company has granted both stock options and Restricted Stock Units (“RSUs”). On August 6, 2018, the Company adopted the 2018 Omnibus Management Share and Cash Incentive Plan (the “Management Plan”) and the 2018 Omnibus Non-Employee Director Share and Cash Incentive Plan (the “Director Plan,” and together with the Management Plan, the “2018 Omnibus Plans”). Stock Options The Company has granted time-based options and performance-based options. Both time-based and performance-based options expire ten years from the date of grant and are classified as equity awards. Time-Based Options Time-based options vest over the requisite service period, which is generally between two years to five years. The compensation cost related to time-based options is recognized over the requisite service period using the straight-line vesting method. There were no time-based options granted during 2020 and 2019. The fair value of time-based options granted during 2018 was $6.13. As there were multiple option grants during 2018, the assumptions below are calculated using a weighted average based on total shares issued. Fair value of time-based options was determined using the Black-Scholes model using the following assumptions:

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