INCOME TAXES

12 Months Ended

Dec. 31, 2020

INCOME TAXES [Abstract]

INCOME TAXES

NOTE 9: INCOME TAXES

The components of earnings from continuing operations before income taxes are as follows:

in thousands	2020	2019	2018
Earnings from Continuing Operations
before Income Taxes
Domestic	$      732,971	$     734,025	$     593,446
Foreign	10,827	23,676	29,844
Total	$      743,798	$     757,701	$     623,290

Income tax expense (benefit) from continuing operations consists of the following:

in thousands	2020	2019	2018
Income Tax Expense (Benefit) from
Continuing Operations
Current
Federal	$        69,180	$       31,234	$       21,111
State and local	23,826	24,403	15,127
Foreign	942	3,304	4,278
Total	$        93,948	$       58,941	$       40,516
Deferred
Federal	$        50,890	$       67,810	$       59,216
State and local	10,798	8,660	8,369
Foreign	167	(213)	(2,652)
Total	$        61,855	$       76,257	$       64,933
Total expense	$      155,803	$     135,198	$     105,449

Income tax expense (benefit) differs from the amount computed by applying the federal statutory income tax rate to earnings from continuing operations before income taxes. The sources and tax effects of the differences are as follows:

dollars in thousands	2020		2019		2018
Income tax expense at the federal
statutory tax rate	$    156,198	21.0%	$    159,117	21.0%	$    130,891	21.0%
Expense (Benefit) from
Income Tax Differences
Statutory depletion	(24,728)	-3.3%	(23,006)	-3.0%	(21,733)	-3.5%
State and local income taxes, net of federal
income tax benefit	27,352	3.7%	26,119	3.4%	18,562	3.0%
Share-based compensation	(6,877)	-0.9%	(17,277)	-2.3%	(16,551)	-2.7%
Uncertain tax positions	1,380	0.2%	1,822	0.2%	(6,402)	-1.0%
Transition tax	0	0.0%	0	0.0%	595	0.1%
Research and development credit	(2,650)	-0.4%	(9,490)	-1.3%	0	0.0%
Other, net	5,128	0.6%	(2,087)	-0.2%	87	0.0%
Total income tax expense/
Effective tax rate	$    155,803	20.9%	$    135,198	17.8%	$    105,449	16.9%

Deferred taxes on the balance sheet result from temporary differences between the amount of assets and liabilities recognized for financial reporting and tax purposes. The components of the net deferred income tax liability at December 31 are as follows:

in thousands	2020	2019
Deferred Tax Assets Related to
Employee benefits	$        21,874	$       29,996
Incentive compensation	58,194	66,488
Asset retirement obligations & other reserves	58,327	55,033
State net operating losses	67,756	67,354
Other	25,362	44,169
Total gross deferred tax assets	$      231,513	$     263,040
Valuation allowance	(32,512)	(29,650)
Total net deferred tax asset	$      199,001	$     233,390
Deferred Tax Liabilities Related to
Property, plant & equipment	$      622,897	$     590,075
Goodwill/other intangible assets	252,209	238,712
Other	29,945	37,642
Total deferred tax liabilities	$      905,051	$     866,429
Net deferred tax liability	$      706,050	$     633,039

Each quarter we analyze the likelihood that our deferred tax assets will be realized. A valuation allowance is recorded if, based on the weight of all available positive and negative evidence, it is more likely than not (a likelihood of more than 50%) that some portion, or all, of a deferred tax asset will not be realized. At December 31, 2020, we have Alabama state net operating loss (NOL) carryforward deferred tax assets of $64,307,000, against which we have a valuation allowance of $29,236,000. Almost all of the Alabama NOL carryforward would expire between 2023 and 2029 if not utilized.

In February 2021, the Alabama Business Competitiveness Act (the Act) was signed into law. This Act contained a provision that requires most taxpayers to change from a three-factor, double-weighted sales method to a single-sales factor method to apportion income to Alabama. This provision was effective as of January 1, 2021 and likely will result in a substantial reduction in our apportionment of income to Alabama; thereby, further inhibiting our ability to utilize our Alabama NOL carryforward. In the first quarter of 2021, we will assess the impact of the Act to our Alabama NOL carryforward and adjust our valuation allowance accordingly.

Changes in our liability for unrecognized tax benefits for the years ended December 31 are as follows:

in thousands	2020	2019	2018
Unrecognized tax benefits as of January 1	$          5,442	$        3,661	$      11,643
Increases for tax positions related to
Prior years	353	273	0
Current year	1,884	3,224	698
Decreases for tax positions related to
Prior years	0	0	(655)
Expiration of applicable statute of limitations	(862)	(1,716)	(8,025)
Unrecognized tax benefits as of December 31	$          6,817	$        5,442	$        3,661

We classify interest and penalties recognized on the liability for unrecognized tax benefits as income tax expense. Interest and penalties recognized as income tax expense (benefit) were $36,000 in 2020, $(11,000) in 2019 and $(1,477,000) in 2018. The balance of accrued interest and penalties included in our liability for unrecognized tax benefits as of December 31 was $336,000 in 2020, $301,000 in 2019 and $312,000 in 2018. Our liability for unrecognized tax benefits at December 31 in the table above includes $6,641,000 in 2020, $5,292,000 in 2019 and $3,481,000 in 2018 that would affect the effective tax rate if recognized. We anticipate no single tax position generating a significant increase in our liability for unrecognized tax benefits within 12 months of this reporting date.

As of December 31, 2020, income tax receivables of $5,314,000 and $938,000 are included in other accounts and notes receivable and other current assets, respectively, in the accompanying Consolidated Balance Sheet. There were similar receivables of $299,000 recorded in other current assets as of December 31, 2019.