Note 6 - Income Taxes

12 Months Ended

Dec. 31, 2021

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,
	2021			2020			2019
Current:
U.S. Federal	$	13,769		$	(5,933	)	$	15,905
U.S. State		2,145			(2,294	)		4,717
Non-U.S.		143			514			1,336
		16,057			(7,713	)		21,958
Deferred:
U.S. Federal		(16,657	)		10,936			(9,386	)
U.S. State		1,897			749			(8,033	)
		(14,760	)		11,685			(17,419	)
Total Income Tax Expense	$	1,297		$	3,972		$	4,539

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

	For the Years Ended December 31,
	2021						2020						2019
	Amount			Percent			Amount			Percent			Amount			Percent
Statutory U.S. federal income tax rate	$	7,436			21.0	%	$	(1,941	)		21.0	%	$	20,600			21.0	%
State income taxes, net of federal tax benefit		(642	)		(1.8	)		(1,109	)		12.0			3,125			3.2
Effect of foreign income taxes		125			0.4			406			(4.4	)		1,336			1.4
Excess tax depletion		(10,535	)		(29.8	)		—			—			(13,141	)		(13.4	)
Uncertain tax positions		1,473			4.2			—			—			—			—
Compensation		3,192			9.0			1,310			(14.2	)		1,799			1.8
Valuation allowance		(544	)		(1.5	)		1,479			(16.0	)		1,400			1.4
Tax credits		(210	)		(0.6	)		1,150			(12.4	)		(2,536	)		(2.6	)
Non-controlling interest		—			—			726			(7.9	)		(3,687	)		(3.8	)
State rate change and prior period adjustments		642			1.8			1,797			(19.4	)		(4,565	)		(4.6	)
Other		360			1.0			154			(1.6	)		208			0.2
Income Tax Expense / Effective Rate	$	1,297			3.7	%	$	3,972			(42.9	)%	$	4,539			4.6	%

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

	December 31,
	2021			2020
Deferred Tax Asset:
Postretirement benefits other than pensions	$	84,130		$	101,673
Pneumoconiosis benefits		47,681			60,284
Asset retirement obligations		47,180			56,779
Workers' compensation		11,419			17,493
Compensation		5,203			5,158
State bonus, net of Federal		4,219			6,918
Long-term disability		1,931			2,757
Net operating loss		937			6,134
Operating lease liability		135			11,377
Mine subsidence		—			17,271
Salary retirement		—			9,446
Financing		—			2,077
Other		5,772			4,175
Total Deferred Tax Asset		208,607			301,542
Valuation Allowance		(937	)		(2,879	)
Net Deferred Tax Asset		207,670			298,663
Deferred Tax Liability:
Equity Partnerships		(99,811	)		(35,570	)
Property, plant and equipment		(40,064	)		(172,026	)
Advance mining royalties		(7,270	)		(10,908	)
Salary retirement		(2,739	)		—
Financing		(640	)		—
Right of use assets		(135	)		(11,338	)
Total Deferred Tax Liability		(150,659	)		(229,842	)
Net Deferred Tax Asset	$	57,011		$	68,821

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 2021 and 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, 2021, the Company has net operating loss carryforwards of approximately $937 for state income tax purposes, which will, if ultimately utilized, offset future taxable income. These net operating losses, if unused, will expire in 2040 and 2041.

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 $937 is appropriate to establish for state tax attributes not anticipated to be utilized before expiration.

Unrecognized Tax Benefits

The Company utilizes the “more likely than not” standard in recognizing a tax benefit in its financial statements. For the years ended  December 31, 2021 and 2020, a reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	December 31,
	2021		2020
Balance at January 1	$	—	$	—
Additions based on tax positions related to the current year		774		—
Additions for tax positions of prior years		2,859		—
Reductions for tax positions of prior years		—		—
Reductions due to the statute of limitations		—		—
Settlements		—		—
Balance at December 31	$	3,633	$	—

The Company recorded an unrecognized tax benefit for the tax year ending December 31, 2021 of $3,633 related to a position taken on state taxes. The Company believes it is reasonably possible to reach a resolution on this matter within the next twelve months. The actual amount of any change to the unrecognized tax benefit could vary depending on the timing and nature of the settlement; therefore, an estimate of change cannot be provided. Related interest and penalties were not accrued as these were estimated to be immaterial.

The Company is subject to taxation in the United States and its various states, as well as Canada and its various provinces. The Company is subject to examination for the tax periods 2018 through 2021 for federal and state returns.