XML 42 R27.htm IDEA: XBRL DOCUMENT v3.24.0.1
INCOME TAXES
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
Income Before Income Taxes
The consolidated income before income taxes for 2023, 2022, and 2021 consists of the following (in thousands):
Years Ended December 31,
 202320222021
Domestic$291,816 $144,443 $5,426 
Foreign2,869 1,992 (4,136)
Total income before income taxes$294,685 $146,435 $1,290 
Income Tax Expense
The consolidated income tax expense for 2023, 2022, and 2021 consists of the following components (in thousands):
Years Ended December 31,
 202320222021
Current   
Federal$65,797 $34,490 $8,449 
State9,322 6,468 (1,098)
Foreign1,170 321 922 
 76,289 41,279 8,273 
Deferred
Federal(14,889)(5,911)(9,423)
State1,430 (1,703)1,310 
Foreign— — (34)
 (13,459)(7,614)(8,147)
Total consolidated expense$62,830 $33,665 $126 
The following table provides a reconciliation of differences from the U.S. Federal statutory rates as follows (in thousands):
Years Ended December 31,
 202320222021
Pretax book income$294,685 $146,435 $1,290 
Federal tax expense at applicable statutory rate61,884 30,751 271 
State and local income taxes9,398 3,669 212 
Impairment and divestiture— — 870 
Tax credits(9,572)(2,422)(2,065)
Nondeductible officer (benefit) compensation(546)977 390 
Compensation (benefit) expense(1,563)1,013 964 
Other3,229 (323)(516)
Total income tax expense$62,830 $33,665 $126 
Deferred Taxes
The Company’s deferred income taxes are primarily due to temporary differences between financial and income tax reporting for incentive compensation, depreciation of property, plant and equipment, amortization of intangibles, and other accrued liabilities.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Companies are required to assess whether valuation allowances should be established against their deferred tax assets based on the consideration of all available evidence, both positive and negative, using a “more likely than not” standard. In making such judgments, significant weight is given to evidence that can be objectively verified.
The Company assesses, on a quarterly basis, the realizability of its deferred tax assets by evaluating all available evidence, both positive and negative, including: (1) the cumulative results of operations in recent years, (2) the nature of recent losses, if applicable, (3) estimates of future taxable income, (4) the length of net operating loss carryforwards (“NOLs”) and (5) the uncertainty associated with a possible change in ownership, which imposes an annual limitation on the use of these carryforwards.
As of December 31, 2023 and 2022, the Company retained a valuation allowance of $0.7 million and $0.8 million, respectively, against deferred tax assets related to various state and local NOLs that are subject to restrictive rules for future utilization.
As of December 31, 2023 and 2022, the Company had no U.S. federal tax NOLs. The Company incurred a net loss in 2020 and fully utilized that loss in carrybacks. The Company has various multi-state income tax NOLs aggregating approximately $47.5 million which will expire between 2024 and 2043, if unused.
The components of deferred tax assets and deferred tax liabilities as of December 31, 2023 and 2022 were as follows (in thousands):
December 31,
 20232022
Deferred tax assets  
Tax credits and loss carryforwards$2,128 $2,929 
Accrued liabilities8,242 5,965 
Incentive compensation8,131 6,960 
Operating lease assets8,102 5,878 
Research expenditure amortization22,160 7,739 
Other2,730 6,560 
 51,493 36,031 
Deferred tax liabilities
Property, plant and equipment(21,731)(22,991)
Intangibles(32,773)(30,188)
Operating lease liabilities(8,102)(5,878)
Other(5,182)(3,957)
 (67,788)(63,014)
Net deferred tax liability before valuation allowances and reserves(16,295)(26,983)
Valuation allowances(718)(775)
Net deferred tax liability$(17,013)$(27,758)
Tax Reserves
The Company’s policy with respect to interest and penalties associated with reserves or allowances for uncertain tax positions is to classify such interest and penalties in Income tax expense (benefit) on the Consolidated Statements of Operations. As of December 31, 2023 and 2022, the total amount of unrecognized income tax benefits, which are included in either Other noncurrent liabilities or Deferred income taxes in the Company’s Consolidated Balance Sheets, was approximately $4.8 million and $2.4 million, respectively, including interest and penalties, all of which, if recognized, would impact the effective income tax rate of the Company. As of December 31, 2023 and 2022, the Company had recorded a total of $0.9 million and $0.9 million, respectively, of accrued interest and penalties related to uncertain tax positions. The Company expects no significant changes to the facts and circumstances underlying its reserves and allowances for uncertain income tax positions as reasonably possible during the next 12 months. As of December 31, 2023, the Company is subject to unexpired statutes of limitation for U.S. federal income taxes for the years 2020 through 2022. The Company is also subject to unexpired statutes of limitation for Indiana state income taxes for the years 2020 through 2022.