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Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes
Note 9 - Income Taxes
Income before income taxes was derived from the following sources:
 202420232022
United States$19,476 $57,736 $58,887 
Foreign31,294 24,608 14,817 
Total income before income taxes$50,770 $82,344 $73,704 
The components of income taxes for the years ended December 31 are as follows:
 202420232022
Current      
Federal$2,646 $12,263 $12,529 
Foreign9,613 6,654 7,346 
State and local316 2,322 2,086 
 12,575 21,239 21,961 
Deferred      
Federal2,139 (1,866)577 
Foreign(1,507)11 (3,326)
State and local452 (377)93 
 1,084 (2,232)(2,656)
Income taxes$13,659 $19,007 $19,305 
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:
 202420232022
Federal tax at statutory rate21.0%21.0%21.0%
Non-deductible officers' compensation4.01.51.4
Non-U.S. tax rate variances3.22.0(2.4)
Global intangible low-taxed income2.33.60.9
Other, net1.8(0.4)0.7
Valuation allowance0.50.72.9
State and local taxes, net of federal benefit0.52.22.2
Uncertain tax positions0.1—0.7
Other Life Insurance Proceeds——(1.2)
Goodwill Impairment——2.7
Other U.S. federal permanent items(0.1)(0.2)(0.1)
Tax credits(0.8)(1.3)(0.3)
Other stock compensation(2.4)(1.5)(0.3)
Foreign tax credits(3.2)(4.5)(2.0)
Effective income tax rate26.9%23.1%26.2%
Income tax expense for the periods ended December 31, 2024, 2023, and 2022 was $13.7 million, $19.0 million, and $19.3 million, respectively. The increase in the effective tax rate from 2023 to 2024 was primarily due to the limitations on the deductibility of compensation and the unfavorable impact from the mix of income earned in jurisdictions with a higher tax rate than the U.S. This was partially offset by a favorable impact from increase in excess tax benefit on share-based compensation.
Income taxes paid in the years ending December 31, 2024, 2023, and 2022 were $13.1 million, $21.9 million, and $14.6 million, respectively.
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:
 20242023
Deferred tax assets:    
Research and development capitalization$6,483 $5,522 
Benefit plan reserves5,947 6,200 
Inventory valuation reserves3,077 4,041 
Other accrued expenses2,128 972 
Net operating loss carryforwards1,967 1,940 
Foreign tax credit1,337 1,018 
Allowance for credit losses1,298 1,329 
Accrued compensation and benefits1,147 1,374 
Unrealized foreign exchange56 314 
Gross deferred tax assets23,440 22,710 
Valuation allowance(2,725)(2,567)
Net deferred tax assets20,715 20,143 
     
Deferred tax liabilities:    
Depreciation and other basis differences(15,179)(13,382)
Intangibles(2,003)(2,579)
Other(753)(609)
Deferred tax liabilities(17,935)(16,570)
Net deferred tax assets$2,780 $3,573 
 20242023
Change in net deferred tax assets:
Ordinary movement$(1,084)$2,232 
Deferred tax balances from business acquisitions— 153 
Items of other comprehensive loss267 216 
Currency translation24 (79)
Other— (108)
Total change in net deferred tax assets$(793)$2,414 
As of December 31, 2024, various international subsidiaries had gross net operating losses totaling $7.9 million, resulting in deferred tax assets of $2.0 million. Of the international net operating losses, $1.0 million carryforward indefinitely, while the remainder, if not utilized, will expire between 2026 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 $1.2 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 $139.3 million of such earnings, as well as our capital in these subsidiaries, indefinitely outside of the U.S.
Unrecognized Income Tax Benefits
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:
 202420232022
Balance at January 1$410 $482 $— 
Additions for tax positions of prior years— — 482 
Settlements with tax authorities— (72)— 
Expiration of statutes of limitations— — — 
Balance at December 31$410 $410 $482 
The decrease in unrecognized tax benefits from 2022 to 2023 was related to a settlement with foreign tax authorities. 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 2020 and foreign, state, and local examinations by authorities for years before 2018.