XML 45 R20.htm IDEA: XBRL DOCUMENT v3.25.0.1
Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The components of the provision for income taxes are as follows:
Year Ended December 31,
202420232022
(in millions)
Current:
Federal$3.7 $3.0 $11.3 
State4.6 1.9 7.9 
Foreign2.8 — 6.4 
Total current11.1 4.9 25.6 
Deferred:
Federal15.1 25.0 37.5 
State6.4 4.1 5.7 
Foreign3.7 2.7 1.6 
Total deferred25.2 31.8 44.8 
Provision$36.3 $36.7 $70.4 
The provision for income taxes results in effective tax rates that differ from the statutory rates. The following is a reconciliation between the statutory U.S. federal income tax rate and the Company’s effective income tax rate on income before income taxes:
Year Ended December 31,
202420232022
Statutory rate21.0 %21.0 %21.0 %
State taxes, including prior year true-ups7.5 2.3 3.8 
AMP tax credits(8.2)(3.5)— 
Statutory depletion(3.2)(2.1)(1.3)
Changes in valuation allowances and reserves(1.1)1.8 0.1 
Prior year true-ups0.4 (0.5)— 
Foreign adjustments1.5 1.8 (0.2)
Currency adjustments4.8 (2.6)(0.8)
Compensation related items0.5 — 0.2 
Divestiture-related non-deductible goodwill3.3 — — 
Other, net1.4 0.5 (0.5)
Effective rate27.9 %18.7 %22.3 %
The Company’s state income taxes include an increase in expense associated with the remeasurement of the Company’s deferred tax liabilities primarily in connection with acquisitions and divestitures that occurred during the year.
On August 16, 2022, the Inflation Reduction Act of 2022 (“IRA”) was enacted. Among other things, the IRA provides for certain manufacturing, production, and investment tax credit incentives, including new Advanced Manufacturing Production ("AMP") tax credits for companies that domestically manufacture and sell clean energy equipment, including wind towers. For the year ended December 31, 2024, the Company has recognized $53.6 million in gross AMP tax credits for wind towers produced and sold in 2024 which are included as a reduction to cost of revenues on the Consolidated Statement of Operations due to the refundable nature of the credits. In December 2024, the Company entered into agreements with unrelated third parties to sell a portion of our 2024 AMP tax credits under Section 6418 of the Internal Revenue Code. We sold $45.0 million of AMP tax credits resulting in a loss of $2.7 million which is reflected in cost of revenues on the Consolidated Statement of Operations. For the year ended December 31, 2023, the Company recognized $32.4 million in gross AMP tax credits for wind towers produced and sold in 2023. The Company utilized $9.8 million of the 2023 credits to offset the US federal income tax liability in 2023 and $8.0 million in 2024. The remaining $14.6 million of AMP tax credits are included in deferred tax assets on the Consolidated Balance Sheet.
The Organization for Economic Co-operation and Development issued Pillar Two model rules for a global minimum tax of 15% effective January 1, 2024 ("Pillar Two"). While it is uncertain whether the U.S. will enact legislation to adopt Pillar Two, certain countries in which we operate have adopted legislation, and other countries are in the process of introducing legislation to implement Pillar Two. Pillar Two had no impact on our 2024 tax rate, and we do not currently expect Pillar Two to significantly impact our tax rate going forward.
Income (loss) before income taxes for the years ended December 31, 2024, 2023, and 2022 was $130.9 million, $182.6 million, and $271.1 million, respectively, for U.S. operations, and $(0.9) million, $13.3 million, and $45.1 million, respectively, for foreign operations, principally Mexico and Canada. The Company provides deferred income taxes on the unrepatriated earnings of its foreign operations where it results in a deferred tax liability.
Deferred income taxes represent the tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The components of deferred tax liabilities and assets are as follows:
December 31,
20242023
(in millions)
Deferred tax liabilities:
Depreciation, depletion, and amortization$248.7 $230.8 
Total deferred tax liabilities248.7 230.8 
Deferred tax assets:
Workers compensation and other benefits12.3 13.9 
Warranties and reserves1.1 1.1 
Equity items— (0.3)
Tax carryforwards and credits36.9 52.8 
Inventory6.1 1.9 
Accrued liabilities and other1.5 (2.3)
Total deferred tax assets57.9 67.1 
Net deferred tax assets (liabilities) before valuation allowances(190.8)(163.7)
Valuation allowances7.0 9.1 
Adjusted net deferred tax assets (liabilities)$(197.8)$(172.8)
At December 31, 2024, the Company had $3.2 million of federal consolidated net operating loss carryforwards, primarily from businesses acquired, and $4.5 million of tax-effected state loss carryforwards remaining. In addition, the Company had $7.7 million of tax-effected foreign net operating loss carryforwards that will begin to expire in the year 2025.
We have established a valuation allowance for state and foreign tax operating losses and credits that we have estimated may not be realizable.
Income tax has not been recognized on the excess of the amount for financial reporting over the tax basis of investments in foreign subsidiaries that is indefinitely reinvested outside the U.S. This amount is recognized upon a repatriation of assets from the subsidiary or a sale or liquidation of the subsidiary. The amount of such temporary differences totaled approximately $100.1 million as of December 31, 2024. Determination of the amount of any unrecognized deferred income tax liability on this temporary difference is not practicable because of the complexities of the hypothetical calculation.
Taxing authority examinations
We have multiple federal tax return filings that are subject to examination by the Internal Revenue Service. U.S. federal tax returns of the Company for the 2021-2023 tax years currently remain open for possible examination. We have various subsidiaries that file separate state tax returns that are subject to examination by taxing authorities. State tax returns of these subsidiaries for 2019 and later tax years, generally currently remain open for possible examination. We have various subsidiaries in Mexico that file separate tax returns that are subject to examination by taxing authorities. Mexican tax returns of these subsidiaries for 2019 and later tax years currently remain open for possible examination.
Unrecognized tax benefits
Unrecognized tax benefits represent the differences between tax positions taken or expected to be taken on a tax return and the benefits recognized for financial statement purposes. There were no unrecognized tax benefits as of December 31, 2024, 2023, and 2022.
The Company accounts for interest expense and penalties related to income tax issues as income tax expense. Accordingly, interest expense and penalties associated with an uncertain tax position are included in the income tax provision. There were no accrued interest and penalties as of December 31, 2024, 2023, and 2022.