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INCOME TAXES
 12 Months Ended
Dec. 31, 2024
INCOME TAXES  
INCOME TAXES

(7)     INCOME TAXES

Our income tax is different than the expected amount computed using the applicable federal statutory income tax rate of 21%. The reasons for and effects of such differences for the years ended December 31st are below (in thousands):

​

​

​

​

​

​

​

​

​

    

2024

    

2023

Expected amount

​

$

(49,464)

​

$

10,344

State income taxes, net of federal benefit

​

 

(9,059)

​

 

1,246

Percentage depletion

​

 

—

​

 

(3,348)

Change in valuation allowance

​

 

49,695

​

 

(3,681)

Stock-based compensation

​

 

121

​

 

(844)

Return to provision adjustments

​

 

(722)

​

 

159

Nondeductible items

​

​

175

​

​

—

Other

​

 

(150)

​

 

589

Total income tax expense

​

$

(9,404)

​

$

4,465

​

The deferred tax assets and liabilities resulting from temporary differences between book and tax basis are comprised of the following at December 31st (in thousands):

​

​

​

​

​

​

​

​

​

    

2024

    

2023

Deferred tax assets:

​

​

​

​

​

​

Net operating loss

​

$

32,725

​

$

20,029

Power contracts

​

 

10,828

​

 

23,302

Compensation

​

 

1,955

​

 

2,287

Accrued liabilities

​

 

423

​

 

570

ARO liabilities

​

​

2,293

​

​

2,798

Lease liabilities

​

​

3,938

​

​

3,044

Coal properties

​

​

26,191

​

​

—

Other

​

 

5,215

​

 

2,016

Total deferred tax assets

​

 

83,568

​

 

54,046

Valuation allowance

​

 

(49,695)

​

 

—

Deferred tax assets, net of valuation allowance

​

 

33,873

​

 

54,046

​

​

​

​

​

​

​

Deferred tax liabilities:

​

​

​

​

​

​

Coal properties

​

 

—

​

 

(28,535)

Power properties

​

 

(27,960)

​

 

(31,126)

Investment partnerships

​

 

(531)

​

 

(549)

ROU assets

​

 

(5,382)

​

 

(3,071)

Total deferred tax liabilities

​

 

(33,873)

​

 

(63,281)

​

​

​

​

​

​

​

Net deferred tax liability

​

$

—

​

$

(9,235)

​

Our effective tax rate (“ETR”) for 2024 and 2023 was approximately 4% and 9% respectively. The tax rate for the years ended December 31, 2024 and 2023 are not predictive of future tax rates. Our ETR differs from the statutory rate due to statutory depletion in excess of tax basis, return to provision adjustments, stock-based compensation and changes in the valuation allowance. The deduction for statutory depletion does not necessarily change proportionately to changes in income before income taxes.

We recognize deferred tax assets to the extent that we believe that these assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. Due to historical cumulative losses over the prior three years as well as projected losses over the next year, we believe that it is not more likely than not that the benefit from certain federal and state deferred tax assets will be realized. As such, we have recorded a full valuation allowance as of December 31, 2024.

The remaining federal NOLs generated in pre-2018 years of $19.5 million can offset 100% of future years’ taxable income. The federal NOLs generated in post 2017 years of $104.9 million can offset 80% of future years’ taxable income. The pre-2018 federal NOLs will expire in varying amounts from 2035 to 2037 if they are not utilized. Indiana NOLs, which total $168.0 million, have a 20-year carryforward period and will expire in the years 2034 to 2044 if they are not utilized.

We have analyzed our filing positions in all of the federal and state jurisdictions where we are required to file income tax returns, as well as all open tax years in these jurisdictions, to determine whether the positions will be more likely than not be sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold are not recorded as a tax benefit or expense in the current year. We identified our federal tax return and our Indiana state tax return as “major” tax jurisdictions. We believe that our income tax filing positions and deduction will be sustained on audit and do not anticipate any adjustments that will result in a material change to its consolidated financial position. While not material, we record any penalties and interest as general and administrative expense. Tax returns filed with the Internal Revenue Service and state entities generally remain subject to examination for three years after filing.