Note 6 - Income Taxes

12 Months Ended

Dec. 31, 2020

Notes to Financial Statements

Income Tax Disclosure [Text Block]

NOTE 6—INCOME TAXES:

The components of income tax expense (benefit) were as follows:

	For The Years Ended December 31,
	2020			2019			2018
Current:
U.S. Federal	$	(5,933	)	$	15,905		$	20,634
U.S. State		(2,294	)		4,717			3,240
Non-U.S.		514			1,336			1,436
		(7,713	)		21,958			25,310
Deferred:
U.S. Federal		10,936			(9,386	)		(7,509	)
U.S. State		749			(8,033	)		(8,973	)
		11,685			(17,419	)		(16,482	)
Total Income Tax Expense	$	3,972		$	4,539		$	8,828

A reconciliation of income tax expense (benefit) and the amount computed by applying the statutory federal income tax rate of 21% to (loss) income from operations before income tax is:

	For the Years Ended December 31,
	2020						2019						2018
	Amount			Percent			Amount			Percent			Amount			Percent
Statutory U.S. federal income tax rate	$	(1,941	)		21.0	%	$	20,600			21.0	%	$	39,399			21.0	%
State income taxes, net of federal tax benefit		(1,109	)		12.0			3,125			3.2			3,240			1.7
Effect of foreign income taxes		406			(4.4	)		1,336			1.4			28			—
Excess tax depletion		—			—			(13,141	)		(13.4	)		(20,873	)		(11.1	)
Effect of change in U.S. tax law		—			—			—			—			2,777			1.5
Compensation		1,310			(14.2	)		1,799			1.8			935			0.5
Valuation allowance		1,479			(16.0	)		1,400			1.4			(1,379	)		(0.7	)
Tax credits		1,150			(12.4	)		(2,536	)		(2.6	)		(980	)		(0.5	)
Non-controlling interest		726			(7.9	)		(3,687	)		(3.8	)		(5,420	)		(2.9	)
State rate change and prior period adjustments		1,797			(19.4	)		(4,565	)		(4.6	)		(9,448	)		(5.0	)
Other		154			(1.6	)		208			0.2			549			0.3
Income Tax Expense / Effective Rate	$	3,972			(42.9	)%	$	4,539			4.6	%	$	8,828			4.8	%

Significant components of deferred tax assets and liabilities were as follows:

	December 31,
	2020			2019
Deferred Tax Asset:
Postretirement benefits other than pensions	$	101,673		$	110,504
Pneumoconiosis benefits		60,284			52,521
Asset retirement obligations		56,779			60,260
Workers' compensation		17,493			16,750
Mine subsidence		17,271			17,110
Operating lease liability		11,377			14,757
Salary retirement		9,446			14,761
State bonus, net of Federal		6,918			7,042
Net operating loss		6,134			—
Compensation		5,158			3,841
Long-term disability		2,757			3,031
Financing		2,077			16,806
Foreign tax credits		—			1,400
Other		4,175			2,456
Total Deferred Tax Asset		301,542			321,239
Valuation Allowance		(2,879	)		(1,400	)
Net Deferred Tax Asset		298,663			319,839
Deferred Tax Liability:
Property, plant and equipment		(172,026	)		(173,849	)
Equity Partnerships		(35,570	)		(17,028	)
Right of use assets		(11,338	)		(14,757	)
Advance mining royalties		(10,908	)		(10,700	)
Total Deferred Tax Liability		(229,842	)		(216,334	)
Net Deferred Tax Asset	$	68,821		$	103,505

Certain provisions of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), which was signed into law by the President of the United States in March 2020, impact the Company and are therefore contemplated in the 2020 income tax provision computations. The CARES Act contained modifications on the limitation of business interest such that the Company anticipates full utilization of all interest expense for federal income tax purposes.

At  December 31, 2020, the Company has net operating loss carryforwards of approximately $15,135 and $40,032 for federal and state income tax purposes, respectively, which will be available to offset future taxable income. Approximately $25,180 will not expire and the remaining amount, if unused, will expire between 2030 and 2040.

As required by U.S. GAAP, a valuation allowance is required when it is more likely than not that all or a portion of a deferred tax asset will not be realized. Management must review all available evidence, both positive and negative, in determining the need for a valuation allowance. After considering all available evidence, management has determined that a valuation allowance in the amount of $2,879 is appropriate to establish for certain state tax attributes not anticipated to be utilized before expiration.

The Company utilizes the “more likely than not” standard in recognizing a tax benefit in its financial statements. For the years ended  December 31, 2020 and 2019, the Company did not have any unrecognized tax benefits. 

The Company is subject to taxation in the United States and its various states, as well as Canada and its various provinces. Under the provisions of the Tax Matters Agreement between the Company and its former parent, certain subsidiaries of the Company are subject to examination for tax years beginning December 31, 2016 through November 28, 2017. Furthermore, the Company is subject to examination for the period November 28, 2017 through December 31, 2020 for federal and state returns.