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Income Taxes | 12 Months Ended
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Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | Note 9 – Income Taxes Income before income taxes was derived from the following sources:
|  | 2022 |  |  | 2021 |  |  | 2020 |
United States |  | $ | 58,887 |  |  | $ | 32,570 |  |  | $ | 22,725 |
Foreign |  |  | 14,817 |  |  |  | 16,326 |  |  |  | 17,846 |
|  | $ | 73,704 |  |  | $ | 48,896 |  |  | $ | 40,571 |
The components of income taxes for the years ended December 31 are as follows:
|  | 2022 |  |  | 2021 |  |  | 2020 |
Current |  |  |  |  |  |  |  |  |
Federal |  | $ | 12,529 |  |  | $ | 649 |  |  | $ | 7,909 |
Foreign |  |  | 7,346 |  |  |  | 5,065 |  |  |  | 5,093 |
State and local |  |  | 2,086 |  |  |  | 917 |  |  |  | 1,188 |
|  |  | 21,961 |  |  |  | 6,631 |  |  |  | 14,190 |
Deferred |  |  |  |  |  |  |  |  |
Federal |  |  | 577 |  |  |  | 7,172 |  |  |  | (2,290 | )
Foreign |  |  | (3,326 | ) |  |  | (75 | ) |  |  | (445 | )
State and local |  |  | 93 |  |  |  | (553 | ) |  |  | (645 | )
|  |  | (2,656 | ) |  |  | 6,544 |  |  |  | (3,380 | )
Income taxes |  | $ | 19,305 |  |  | $ | 13,175 |  |  | $ | 10,810 |
The differences between the provision for income taxes at the U.S. federal statutory rate and the tax shown in the Statements of Consolidated Income for the years ended December 31 are summarized as follows:
|  | 2022 |  | 2021 |  | 2020
Federal tax at statutory rate |  | 21.0% |  | 21.0% |  | 21.0%
State and local taxes, net of federal benefit |  | 2.2 |  | 1.5 |  | 2.3
Valuation allowance |  | 2.9 |  | (1.5) |  | (0.6)
Non-deductible Goodwill Impairment |  | 2.7 |  | 0.0 |  | 0.0
Non-U.S. tax rate variances |  | (2.4) |  | 6.0 |  | 3.3
Foreign tax credits |  | (2.0) |  | (2.5) |  | (3.0)
Non-deductible officers' compensation |  | 1.4 |  | 1.6 |  | 2.9
Officer Life Insurance Proceeds |  | (1.2) |  | 0.0 |  | 0.0
Global intangible low-taxed income |  | 0.9 |  | 1.6 |  | 3.0
Uncertain tax positions |  | 0.7 |  | 0.0 |  | 0.0
Other U.S. federal permanent items |  | (0.4) |  | 0.1 |  | 0.4
Tax credits |  | (0.3) |  | (1.7) |  | (0.9)
Other, net |  | 0.7 |  | 0.8 |  | (1.8)
Effective income tax rate |  | 26.2% |  | 26.9% |  | 26.6%
Income tax expense for the periods ended December 31, 2022, 2021, and 2020 was $19.3 million, $13.2 million, and $10.8 million, respectively. The decrease in the effective tax rate from 2021 to 2022 was primarily due to the mix of income earned in jurisdictions with a lower tax rate than the U.S. and a non-taxable benefit related to the proceeds from a settlement of a Company-owned life insurance policy. This was partially offset by a goodwill impairment charge as discussed in Note 12 as well as an increase in valuation allowances recorded in certain international jurisdictions in 2022. Deferred Income Tax Assets and Liabilities Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets and liabilities were as follows:
|  | 2022 |  |  | 2021 |
Deferred tax assets: |  |  |  |  |  |
Benefit plan reserves |  | $ | 6,348 |  |  | $ | 7,048 |
Net operating loss carryforwards |  |  | 2,722 |  |  |  | 2,383 |
Inventory valuation reserves |  |  | 2,548 |  |  |  | 2,504 |
Other accrued expenses |  |  | 2,531 |  |  |  | 2,453 |
Research and development capitalization |  |  | 1,533 |  |  |  | — |
Foreign tax credit |  |  | 1,153 |  |  |  | 543 |
Accrued compensation and benefits |  |  | 994 |  |  |  | 1,175 |
Allowance for credit losses |  |  | 917 |  |  |  | 663 |
Unrealized foreign exchange |  |  | 215 |  |  |  | 213 |
Gross deferred tax assets |  |  | 18,961 |  |  |  | 16,982 |
Valuation allowance |  |  | (3,080 | ) |  |  | (1,932 | )
Net deferred tax assets |  |  | 15,881 |  |  |  | 15,050 |
Deferred tax liabilities: |  |  |  |  |  |
Depreciation and other basis differences |  |  | (10,825 | ) |  |  | (11,023 | )
Intangibles |  |  | (3,263 | ) |  |  | (2,594 | )
Other |  |  | (634 | ) |  |  | (404 | )
Deferred tax liabilities |  |  | (14,722 | ) |  |  | (14,021 | )
Net deferred tax assets |  | $ | 1,159 |  |  | $ | 1,029 |
|  | 2022 |  |  | 2021 |
Change in net deferred tax assets: |  |  |  |  |  |
Ordinary movement |  | $ | 2,656 |  |  | $ | (6,544 | )
Deferred tax balances from business acquisitions (see Note 17) |  |  | (1,999 | ) |  |  | — |
Items of other comprehensive loss (see Note 6) |  |  | (312 | ) |  |  | (371 | )
Currency translation |  |  | (7 | ) |  |  | 2 |
Other |  |  | (208 | ) |  |  | — |
Total change in net deferred tax assets |  | $ | 130 |  |  | $ | (6,913 | )
As of December 31, 2022, various international subsidiaries had gross net operating losses totaling $10.5 million, resulting in deferred tax assets of $2.7 million. Of the international net operating losses, $0.6 million can be carried forward indefinitely, while the remainder, if not utilized, will expire between 2024 and 2033. It is more likely than not that certain net operating loss carryforwards will not be realized; therefore, we have recorded a valuation allowance of $1.9 million against them. The net operating loss carryforwards are subject to various annual limitations under the tax laws of the different jurisdictions. The Company considers earnings in our non-U.S. subsidiaries to be permanently reinvested and therefore did not record any associated deferred income taxes on such earnings. Accordingly, the Company intends to continue to invest approximately $114.7 million of such earnings, as well as our capital in these subsidiaries, indefinitely outside of the U.S. Unrecognized Income Tax Benefits In 2022, we recognized an increase of $0.5 million to reserves for uncertain tax positions. The following is a tabular reconciliation of the total amounts of unrecognized tax benefits related to uncertain tax positions, excluding interest and penalties, for the year ended December 31:
|  | 2022 |  |  | 2021 |  |  | 2020 |
Balance at January 1 |  | $ | — |  |  | $ | 66 |  |  | $ | 118 |
Additions for tax positions of prior years |  |  | 482 |  |  |  | — |  |  |  | — |
Expiration of statutes of limitations |  |  | — |  |  |  | (66 | ) |  |  | (52 | )
Balance at December 31 |  | $ | 482 |  |  | $ | — |  |  | $ | 66 |
The increase in unrecognized tax benefits was primarily related to a reversal of benefits recognized in previous tax years from foreign tax credits. Additionally, the Company records accrued interest as well as penalties related to unrecognized tax benefits as part of the provision for income taxes. The accrued interest and penalties related to the gross unrecognized tax benefits, excluded from above, was de minimis in all years presented. Preformed Line Products Company and its subsidiaries file income tax return in the United States and various countries around the world. With few exceptions, the Company is no longer subject to United States federal examinations by tax authorities for years before 2018 and foreign, state, and local examinations by authorities for years before 2016.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI https://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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