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Income Taxes
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Income tax provision (benefit) from continuing operations consists of the following:
Year ended December 31,
(in thousands)202220212020
Current:
  Federal$38,801 $23,333 $(42,718)
  State and local13,541 4,934 (748)
  Foreign4,741 760 6,731 
57,083 29,027 (36,735)
Deferred:
  Federal(13,425)(3,687)28,665 
  State and local(6,775)819 1,180 
  Foreign2,745 3,069 (4,020)
(17,455)201 25,825 
Total:
  Federal25,376 19,646 (14,053)
  State and local6,766 5,753 432 
  Foreign7,486 3,829 2,711 
$39,628 $29,228 $(10,910)

Income (loss) before income taxes from continuing operations consists of the following:
Year ended December 31,
(in thousands)202220212020
  U.S.$173,810 $143,712 $(38,319)
  Foreign20,772 17,058 11,238 
$194,582 $160,770 $(27,081)

A reconciliation from the statutory U.S. federal tax rate to the effective tax rate follows:
Year ended December 31,
202220212020
Statutory U.S. federal tax rate21.0 %21.0 %21.0 %
Increase (decrease) in rate resulting from:
State and local income taxes, net of related federal taxes2.4 2.5 0.5 
Federal tax rate differential(0.3)0.4 (2.1)
U.S. tax rate change and other tax law impacts (a)
0.4 0.5 56.2 
Effect of noncontrolling interest(3.9)(4.2)(17.0)
Derivative instruments and hedging activities(1.3)0.4 (11.8)
U.S. income taxes on foreign earnings(0.1)0.7 (1.8)
Nondeductible compensation1.2 1.9 (5.5)
Unrecognized tax benefits8.0 2.1 (72.2)
Valuation allowance0.7 0.1 (1.9)
Foreign tax credits(2.1)(1.3)(0.5)
Research and development and other tax credits(7.0)(5.0)75.6 
Equity method investments0.8 (0.6)(0.1)
Other, net0.6 (0.3)(0.1)
Effective tax rate20.4 %18.2 %40.3 %
(a) Reflects the impact of the CARES Act which provided a financial statement benefit of $14.8 million in 2020.
Net income taxes of $88.7 million, $51.7 million and $2.4 million were paid in the years ended December 31, 2022, 2021 and 2020, respectively.

TAMH and ELEMENT are treated as partnerships for U.S. tax purposes. Partnerships are not taxable entities so the tax consequences of the partnership’s transactions flow through to the partners (i.e., investors) at their proportionate share. As a result, the Consolidated Financial Statements do not reflect such income taxes on income (loss) before taxes attributable to the noncontrolling interest in the partnerships.

The Company has elected to treat Global Intangible Low Tax Income (“GILTI”) as a period cost and, therefore, has not recognized deferred taxes for basis differences that may reverse as GILTI tax in future years.

For the years ended December 31, 2022 and 2021, the Company has not recognized deferred tax liabilities for temporary differences related to investments in foreign subsidiaries that were deemed permanently reinvested. Determination of the amount of unrecognized deferred income tax liabilities on these earnings is not practicable because such liability, if any, depends on certain circumstances existing and if/when remittance occurs. A deferred tax liability will be recognized if and when the Company no longer plans to permanently reinvest these undistributed earnings.


Significant components of the Company's deferred tax liabilities and assets are as follows:
December 31,
(in thousands)20222021
Deferred tax liabilities:
 Property, plant and equipment$(58,273)$(66,913)
 Operating lease right-of-use assets(9,370)— 
 Identifiable intangibles(6,802)(7,022)
 Investments(34,604)(35,842)
 Derivative Instruments(7,911)— 
 Other(5,160)(3,859)
(122,120)(113,636)
Deferred tax assets:
 Employee benefits28,859 27,695 
 Accounts and notes receivable6,726 2,189 
 Inventory10,272 4,533 
 Federal income tax credits1,914 2,292 
 Net operating loss carryforwards1,740 2,906 
 Derivative instruments— 1,774 
 Operating lease liability9,526 — 
 Other7,118 5,490 
Total deferred tax assets66,155 46,879 
less: Valuation allowance3,834 2,834 
62,321 44,045 
Net deferred tax liabilities(a)
$(59,799)$(69,591)
(a) The Company had deferred tax assets of $4.3 million and $1.5 million included in Other assets in the Consolidated Balance Sheets as of December 31, 2022 and 2021, respectively.

On December 31, 2022, the Company had $47.3 million and $3.7 million of state and non-U.S. net operating loss carryforwards that begin to expire in 2023 and 2035, respectively. The Company also has $1.9 million of U.S. foreign tax credits ("FTCs") carryforwards that begin to expire after 2031. The valuation allowance of $3.8 million is related to deferred tax assets of $1.9 million, $1.5 million, and $0.4 million for U.S. federal FTCs, branch income tax accounting that will impact future U.S. federal FTCs, and outside basis differences in U.S. equity investees, respectively.
Deferred income tax assets and liabilities are recognized for the future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance will be recorded to reduce deferred tax assets if, based on all available evidence, it is considered more likely than not that some portion or all of the recorded deferred tax assets will not be realized in future periods. In assessing the realizability of our deferred tax assets, we consider positive and negative evidence, including historical operating results, future reversals of existing taxable temporary differences, projected future earnings, and tax planning strategies.

The Company and its subsidiaries, file income tax returns in the U.S., foreign, state and local jurisdictions. The Company is no longer subject to examination by taxing authorities in the U.S., foreign, or state and local jurisdictions for years before 2014. The Company’s subsidiary partnership returns are under federal tax examination by the IRS for the tax years 2015 through 2018. The Company’s subsidiary is under federal tax examination by the Mexican tax authorities for tax year 2015. Due to the potential for resolution of U.S. federal, foreign, state and local examinations, it is reasonably possible that the gross unrecognized tax benefits may change within the next twelve months by a range of $18.6 million to $40.7 million.


A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:
(in thousands)202220212020
Balance at beginning of period$51,754 $44,401 $22,415 
Tax positions related to the current year
Gross additions8,074 13,179 11,598 
Tax positions related to prior years
Gross additions19,434 1,364 12,013 
Gross reductions— (7,190)(1,566)
Lapse in statute of limitations— — (59)
Balance at end of period$79,262 $51,754 $44,401 
As of December 31, 2022, 2021 and 2020, if our unrecognized tax benefits were recognized in future periods, they would favorably impact our effective tax rate. As of December 31, 2022, unrecognized tax benefits of $79.2 million include $60.3 million associated with the federal and state R&D Credits.

The Company’s practice is to recognize interest and penalties on uncertain tax positions in the provision for income taxes in the Consolidated Statement of Operations. At December 31, 2022, 2021, and 2020, the Company recorded reserves of $8.6 million, $2.7 million and $1.8 million, respectively, of interest and penalties on uncertain tax positions in the Consolidated Balance Sheets.