XML 39 R25.htm IDEA: XBRL DOCUMENT v3.24.0.1
Income Taxes
 12 Months Ended
Dec. 31, 2023
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The current income tax provision represents the estimated amount of income taxes paid or payable for the year, as well as changes in estimates from prior years. The deferred income tax (benefit) provision represents the change in deferred tax liabilities and assets. The following table presents the significant components of the provision for income taxes:

 Fiscal Year
(in thousands)202320222021
Current:
Federal$158,475 $109,899 $59,308 
State39,652 26,053 15,444 
Total current provision$198,127 $135,952 $74,752 
Deferred:   
Federal$(40,658)$7,478 $(4,966)
State(8,363)1,499 (4,217)
Total deferred (benefit) provision$(49,021)$8,977 $(9,183)
Income tax expense$149,106 $144,929 $65,569 

The Company’s effective income tax rate was 26.7% for 2023, 25.2% for 2022 and 25.7% for 2021. The following table provides a reconciliation of income tax expense at the statutory federal rate to actual income tax expense:

 Fiscal Year
 202320222021
(in thousands)Income
tax expense		% pre-tax
income		Income
tax expense		% pre-tax
income		Income
tax expense		% pre-tax
income
Statutory expense$117,071 21.0 %$120,768 21.0 %$53,581 21.0 %
State income taxes, net of federal benefit21,001 3.8 21,572 3.8 9,522 3.7 
Nondeductible compensation7,372 1.3 4,005 0.7 3,545 1.4 
Meals, entertainment and travel expense3,336 0.6 1,694 0.3 2,028 0.8 
Valuation allowance change701 0.1 (932)(0.2)(902)(0.4)
Adjustment for uncertain tax positions52 — (1,351)(0.2)(984)(0.4)
Other, net(427)(0.1)(827)(0.2)(1,221)(0.4)
Income tax expense$149,106 26.7 %$144,929 25.2 %$65,569 25.7 %

The Company records liabilities for uncertain tax positions related to income tax positions. These liabilities reflect the Company’s best estimate of the ultimate income tax liability based on known facts and information. Material changes in facts or information, as well as the expiration of statutes of limitations and/or settlements with individual tax jurisdictions, may result in material adjustments to these estimates in the future.

The Company recognizes potential interest and penalties related to uncertain tax positions in income tax expense. During 2023, 2022 and 2021, the interest and penalties related to uncertain tax positions recognized in income tax expense were not material. In addition, the amount of interest and penalties accrued at December 31, 2023 and December 31, 2022 were not material.

The Company had uncertain tax positions, including accrued interest, of $0.4 million on December 31, 2023 and $0.3 million on December 31, 2022, all of which would affect the Company’s effective income tax rate if recognized. While it is expected the amount of uncertain tax positions may change in the next 12 months, the Company does not expect such change would have a material impact on the consolidated financial statements.
A reconciliation of uncertain tax positions, excluding accrued interest, is as follows:

 Fiscal Year
(in thousands)202320222021
Beginning balance - gross uncertain tax positions$285 $1,254 $2,161 
Increase as a result of tax positions taken in the current year105 105 59 
Increase as a result of tax positions taken in a prior year— — — 
Reduction as a result of the expiration of the applicable statute of limitations(60)(1,074)(966)
Ending balance - gross uncertain tax positions$330 $285 $1,254 

Deferred income taxes are recorded based upon temporary differences between the financial statement and tax bases of assets and liabilities and available net operating loss and tax credit carryforwards. Temporary differences and carryforwards that comprised deferred income tax assets and liabilities were as follows:

(in thousands)December 31, 2023December 31, 2022
Acquisition related contingent consideration$163,827 $132,535 
Accrued liabilities32,516 30,064 
Operating lease liabilities31,443 35,832 
Deferred compensation27,017 23,102 
Deferred revenue26,750 27,976 
Postretirement benefits13,601 11,511 
Transactional costs3,101 3,532 
Financing lease agreements470 614 
Net operating loss carryforwards437 532 
Pension427 808 
Other3,084 3,875 
Deferred income tax assets$302,673 $270,381 
Less: Valuation allowance for deferred tax assets4,130 3,428 
Net deferred income tax asset$298,543 $266,953 
Depreciation$(201,875)$(182,174)
Intangible assets(170,504)(173,560)
Right-of-use assets - operating leases(30,034)(34,410)
Inventory(11,425)(14,603)
Prepaid expenses(8,028)(9,193)
Patronage dividend(5,112)(3,235)
Deferred income tax liabilities$(426,978)$(417,175)
Net deferred income tax liability$(128,435)$(150,222)

The Company’s deferred income tax assets and liabilities are subject to adjustment in future periods based on the Company’s ongoing evaluations of such deferred assets and liabilities and new information available to the Company.

Valuation allowances are recognized on deferred tax assets if the Company believes it is more likely than not that some or all of the deferred tax assets will not be realized. The Company believes the majority of the deferred tax assets will be realized due to the reversal of certain significant temporary differences and anticipated future taxable income from operations.

The valuation allowance of $4.1 million on December 31, 2023 and $3.4 million on December 31, 2022 was established primarily for certain loss carryforwards and deferred compensation.

As of December 31, 2023, the Company had no federal net operating losses and $10.1 million of state net operating losses available to reduce future income taxes, which expire in varying amounts through 2043.

Prior tax years beginning in year 2020 remain open to examination by the Internal Revenue Service, and various tax years beginning in year 2000 remain open to examination by certain state tax jurisdictions due to loss carryforwards.