Income Taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company provides for income taxes and the related accounts under the asset and liability method. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates expected to be in effect during the year in which the basis differences reverse. Valuation allowances are established when management determines it is more likely than not that some portion, or all, of the deferred tax assets will not be realized.

The components of (Loss) income before income tax (benefit) provision and the Income tax (benefit) provision for the years ended December 31 are as follows:

	2023		2022
(Loss) income before income tax (benefit) provision
Domestic	$	(64,077)	$	87,975
Foreign	(81)		(252)
	$	(64,158)	$	87,723
Income tax (benefit) provision
Current income tax (benefit) provision:
Federal	$	(3,405)	$	20,761
State	290		1,328
Foreign	(342)		(53)
Total current	(3,457)		22,036
Deferred income tax (benefit) provision:
Federal	(16,467)		(8,887)
State	(4,647)		416
Total deferred	(21,114)		(8,471)
	$	(24,571)	$	13,565

The Company made income tax payments of $1.4 million and $23.4 million during 2023 and 2022, respectively. During the same periods, income tax refunds totaled $14.9 million and $0.1 million, respectively.

The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before the provision for income taxes. A reconciliation of the federal statutory and effective income tax rate for the years ended December 31 is as follows:

	2023			2022
(Loss) income before income tax (benefit) provision	$	(64,158)		$	87,723
Statutory taxes at 21.0%	$	(13,473)		$	18,422
State and local income taxes	(4,392)			1,629
Non-deductible expenses	1,071			745
Percentage depletion	(3,455)			(4,866)
R&D and other federal credits	(109)			(300)
Settlements and uncertain tax positions	(3,512)			(787)
Other, net	(701)			(1,278)
Income tax (benefit) provision	$	(24,571)		$	13,565
Effective income tax rate	38.3		%	15.5		%

The Company recorded an income tax benefit of $24.6 million for the year ended December 31, 2023 on loss before income tax of $64.2 million, or 38.3%, compared to income tax expense of $13.6 million on income before income tax of $87.7 million, or 15.5%, for the year ended December 31, 2022.

The year ended December 31, 2023 included $4.0 million of discrete tax benefits, primarily from the reversal of uncertain tax provisions and the impact of U.S. federal provision to return adjustments. Excluding the $4.0 million of discrete tax benefit, the effective income tax rate in 2023 was 32.0%. The income tax provision for the year ended December 31, 2022 includes $1.5 million of discrete tax benefits, primarily from the reversal of uncertain tax positions as a result of the conclusion of the IRS examination of the Company’s 2013, 2014, 2015 and 2016 federal income tax returns. Excluding the $1.5 million of discrete tax benefits, the effective income tax rate in 2022 was 17.1%.

The change in the effective income tax rate for 2023 compared to 2022, excluding the impact of the long-lived asset impairment charge and discrete items, is primarily due to a decrease in earnings at entities that qualify for percentage depletion. The benefit from percentage depletion is not directly related to the amount of pre-tax income recorded in a period.

A detailed summary of the total deferred tax assets and liabilities in the Company's Consolidated Balance Sheets resulting from differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes is as follows:

	December 31
	2023		2022
Deferred tax assets
Lease liabilities	$	22,265	$	21,880
Tax carryforwards	14,816		12,398
Inventories	4,880		5,571
Accrued liabilities	9,226		8,176
Employee benefits	3,319		3,086
Land valuation adjustment	6,378		6,261
Partnership investment - development costs	12,565		—
Other	9,680		6,850
Total deferred tax assets	83,129		64,222
Less: Valuation allowance	11,783		11,809
	71,346		52,413
Deferred tax liabilities
Lease right-of-use assets	22,611		21,880
Depreciation and depletion	23,607		19,665
Partnership investment - development costs	—		6,069
Accrued pension benefits	10,047		10,921
Total deferred tax liabilities	56,265		58,535
Net deferred asset (liability)	$	15,081	$	(6,122)

The following table summarizes the tax carryforwards and associated carryforward periods and related valuation allowances where the Company has determined that realization is uncertain:

	December 31, 2023
	Net deferred tax asset		Valuation allowance		Carryforwards expire during:
State net operating loss	$	16,526	$	14,757	2024 - 2043

	December 31, 2022
	Net deferred tax asset		Valuation allowance		Carryforwards expire during:
State net operating loss	$	15,347	$	14,422	2023-2042

The Company has a valuation allowance for certain state and foreign deferred tax assets. Based upon the review of historical earnings and the relevant expiration of carryforwards, including utilization limitations in the various state taxing jurisdictions, the Company believes the valuation allowances are appropriate and does not expect to release valuation allowances within the next twelve months that would have a significant effect on the Company's financial position or results of operations.

Since 2021, the Company has participated in a voluntary program with the IRS called Compliance Assurance Process (“CAP”). The objective of CAP is to contemporaneously work with the IRS to achieve federal tax compliance and resolve all or most issues prior to the filing of the tax return. In general, the Company operates in taxing jurisdictions that provide a statute of limitations period ranging from three to five years for the taxing authorities to review the applicable tax filings. The tax returns of the Company and certain of its subsidiaries are under routine examination by various taxing authorities. The Company has not been informed of any material assessment for which an accrual has not been previously provided and the Company would

vigorously contest any material assessment. Management believes any potential adjustment would not materially affect the Company's financial condition or results of operations.

The following is a reconciliation of the Company's total gross unrecognized tax benefits, defined as the aggregate tax effect of differences between tax return positions and the benefits recognized in the financial statements for the years ended December 31, 2023 and 2022. Approximately $2.8 million and $5.5 million of the gross unrecognized tax benefits as of December 31, 2023 and 2022, respectively, relate to permanent items that, if recognized, would impact the effective income tax rate. This amount differs from the gross unrecognized tax benefits presented in the table below due to (1) the deferred tax asset which would be available if the position were not sustained upon audit and (2) the decrease in U.S. federal income taxes which would occur upon the recognition of the state tax benefits included herein.

	2023		2022
Balance at January 1	$	9,626	$	10,554
Decreases based on settlements with tax authorities	—		(928)
Decreases based on lapse of applicable statute of limitations	(3,478)		—
Balance at December 31	$	6,148	$	9,626

The Company records interest and penalties on uncertain tax positions as a component of the income tax provision. The Company recognized net benefit of less than $0.1 million and net expense of less than $0.1 million in interest and penalties related to uncertain tax positions during 2023 and 2022, respectively. The total amount of interest and penalties accrued was $0.2 million and $0.3 million as of December 31, 2023 and 2022, respectively.

The Company expects the amount of unrecognized tax benefits will change within the next 12 months; however, the change in unrecognized tax benefits, which is reasonably possible within the next 12 months, is not expected to have a significant effect on the Company's financial position, results of operations or cash flows.