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Income Taxes | 12 Months Ended
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Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES We are subject to federal income tax in the U.S., Canada and the U.K., as well as income tax within multiple U.S. state jurisdictions. We provide for income taxes based on the enacted tax laws and rates in the jurisdictions in which we conduct our operations. These jurisdictions may have regimes of taxation that vary with respect to nominal rates and with respect to the basis on which these rates are applied. This variation, along with the changes in our mix of income within these jurisdictions, can contribute to shifts in our effective tax rate from period to period. We are currently under audit by various state and international authorities, and we do not have any returns under examination for years prior to 2017. We apply the provisions of FASB Topic Income Taxes regarding the treatment of uncertain tax positions. As of December 31, 2023 and 2022, we had no uncertain tax positions. Beginning in 2024, certain jurisdictions will implement the Organization for Economic Cooperation and Development's (OECD) Pillar Two rules regarding a 15% global minimum tax. Considering our current global footprint, we do not anticipate that these new rules will materially impact our provision for income taxes. Deferred income taxes reflect the net tax effects of temporary differences between the financial and tax bases of assets and liabilities. Significant components of deferred tax assets and liabilities as of December 31, 2023 and 2022 were as follows:
|  | December 31,
|  | 2023 |  | 2022
|  | (In thousands)
Deferred tax assets: |  |  |  |
Pension liability |  | $ | 17,439 |  |  | $ | 11,931 |
Accrued warranty expense |  | 1,641 |  |  | 1,694 |
Capitalized Section 174 expenditures |  | 23,800 |  |  | 11,145 |
Accrued vacation pay |  | 3,103 |  |  | 3,246 |
Accrued liabilities for self-insurance (including postretirement health care benefits) |  | — |  |  | 17 |
Accrued liabilities for executive and employee incentive compensation |  | 13,784 |  |  | 12,475 |
Environmental and products liabilities |  | 20,576 |  |  | 20,983 |
Lease liabilities |  | 4,860 |  |  | 5,298 |
Investments in joint ventures and affiliated companies |  | 224 |  |  | 1,494 |
Long-term contracts |  | 13,363 |  |  | 14,442 |
Accrued payroll taxes |  | — |  |  | 2,504 |
U.S. federal tax credits and loss carryforward |  | 7,055 |  |  | 7,113 |
U.S. state tax credits and loss carryforward |  | 7,935 |  |  | 4,731 |
Foreign tax credit and loss carryforward |  | 22,869 |  |  | 20,209 |
Other |  | 2,018 |  |  | 2,719 |
Gross deferred tax assets |  | 138,667 |  |  | 120,001 |
Valuation allowance for deferred tax assets |  | (17,421) |  |  | (13,022) |
Total deferred tax assets |  | 121,246 |  |  | 106,979 |
Deferred tax liabilities: |  |  |  |
Property, plant and equipment |  | 85,661 |  |  | 75,334 |
Right-of-use lease assets |  | 11,550 |  |  | 12,246 |
Accrued liabilities for self-insurance (including postretirement health care benefits) |  | 341 |  |  | — |
Intangibles |  | 21,976 |  |  | 22,404 |
Total deferred tax liabilities |  | 119,528 |  |  | 109,984 |
Net deferred tax assets (liabilities) |  | $ | 1,718 |  |  | $ | (3,005) |
The components of Income before Provision for Income Taxes were as follows:
|  | Year Ended December 31,
|  | 2023 |  | 2022 |  | 2021
|  | (In thousands)
U.S. |  | $ | 282,459 |  |  | $ | 281,677 |  |  | $ | 343,091 |
Other than U.S. |  | 38,941 |  |  | 32,700 |  |  | 52,622 |
Income before Provision for Income Taxes |  | $ | 321,400 |  |  | $ | 314,377 |  |  | $ | 395,713 |
The components of Provision for Income Taxes were as follows:
|  | Year Ended December 31,
|  | 2023 |  | 2022 |  | 2021
|  | (In thousands)
Current: |  |  |  |  |  |
U.S. – federal |  | $ | 69,254 |  |  | $ | 54,683 |  |  | $ | 31,535 |
U.S. – state and local |  | 4,255 |  |  | 5,360 |  |  | 1,030 |
Other than U.S. |  | 6,698 |  |  | 10,199 |  |  | 16,769 |
Total current |  | 80,207 |  |  | 70,242 |  |  | 49,334 |
Deferred: |  |  |  |  |  |
U.S. – federal |  | (8,968) |  |  | 5,755 |  |  | 40,463 |
U.S. – state and local |  | (376) |  |  | (34) |  |  | 3,473 |
Other than U.S. |  | 4,216 |  |  | (206) |  |  | (3,845) |
Total deferred |  | (5,128) |  |  | 5,515 |  |  | 40,091 |
Provision for Income Taxes |  | $ | 75,079 |  |  | $ | 75,757 |  |  | $ | 89,425 |
The following is a reconciliation of our income tax provision from the U.S. statutory federal tax rate to our consolidated effective tax rate:
|  | Year Ended December 31,
|  | 2023 |  | 2022 |  | 2021
U.S. federal statutory tax rate |  | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State and local income taxes |  | 1.2 | % |  | 1.7 | % |  | 1.1 | %
Foreign rate differential |  | 0.5 | % |  | 0.5 | % |  | 0.6 | %
Excess tax deductions on equity compensation |  | (0.3) | % |  | (0.1) | % |  | (0.1) | %
Other |  | 1.0 | % |  | 1.0 | % |  | — | %
Effective tax rate |  | 23.4 | % |  | 24.1 | % |  | 22.6 | %
At December 31, 2023, we had a valuation allowance of $17.4 million for deferred tax assets, which we expect cannot be realized through carrybacks, future reversals of existing taxable temporary differences and our estimate of future taxable income. We believe that our remaining deferred tax assets are more likely than not realizable through carrybacks, future reversals of existing taxable temporary differences, our estimate of future taxable income and potential tax planning. Any changes to our estimated valuation allowance could be material to our consolidated financial statements. The following is an analysis of our valuation allowance for deferred tax assets:
|  | Beginning Balance |  | Charges To Costs and Expenses |  | Charged To Other Accounts |  | Ending Balance
|  | (In thousands)
Year Ended December 31, 2023 |  | $ | (13,022) |  |  | (4,399) |  |  | — |  |  | $ | (17,421) |
Year Ended December 31, 2022 |  | $ | (13,218) |  |  | 196 |  |  | — |  |  | $ | (13,022) |
Year Ended December 31, 2021 |  | $ | (12,892) |  |  | (326) |  |  | — |  |  | $ | (13,218) |
We have domestic federal and foreign capital losses of $9.5 million available to offset future capital gains. The domestic federal capital losses begin to expire in 2024, while the foreign capital losses have an indefinite carryforward period. We are carrying a full valuation allowance of $9.5 million against the deferred tax asset related to these domestic federal and foreign capital loss carryforwards. In addition, we have state credits and state net operating losses of $10.0 million ($7.9 million net of federal tax benefit) available to offset future taxable income in various states. These state net operating loss carryforwards begin to expire in 2024. We are carrying a valuation allowance of $10.0 million ($7.9 million net of federal tax benefit) against the deferred tax asset related to the state credits and state loss carryforwards. We would be subject to withholding taxes if we were to distribute earnings from certain foreign subsidiaries. As of December 31, 2023, the undistributed earnings of these subsidiaries were approximately $292.3 million, and our unrecognized deferred income tax liabilities of approximately $14.6 million would be payable upon the distribution of these earnings. All of our foreign earnings are considered indefinitely reinvested.

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