Income Taxes

3 Months Ended

Mar. 31, 2022

Income Taxes [Abstract]

Income Taxes [Text Block]

9. Income Taxes

For the three months ended March 31, 2022 and 2021, the Company estimated its annual effective tax rate and applied this effective tax rate to its year-to-date pretax income at the end of the interim reporting period. The tax effects of unusual or infrequently occurring items, including effects of changes in tax laws or rates and changes in judgment about the realizability of deferred tax assets, are reported in the interim period in which they occur.

The Company’s 2022 estimated annual effective tax rate is 23.3%, which has been favorably impacted by mine depletion deductions in the United States. The Company had an income tax expense of $81.9 million based on an income before tax of $351.8 million for the three months ended March 31, 2022.

Income tax benefit of $19.1 million for the three months ended March 31, 2021 was calculated based on an estimated annual effective tax rate of 31.8% for the period.

The Company utilizes the “more likely than not” standard in recognizing a tax benefit in its financial statements. For the three months ended March 31, 2021, the Company had no unrecognized tax benefits. If accrual for interest or penalties is required, it is the Company’s policy to include these as a component of income tax expense.

The Company is subject to taxation in the U.S. and its various states, as well as Australia and its various localities. In the U.S. and Australia, the first tax return was lodged for the year ended December 31, 2018. In the U.S., companies are subject to open tax audits for a period of seven years at the federal level and five years at the state level. In Australia, companies are subject to open tax audits for a period of four years from the date of assessment.

The Company assessed the need for a valuation allowance by evaluating future taxable income, available for tax strategies and the reversal of temporary tax differences.

At December 31, 2021, the Australian Operations had tax losses carried forward of $27.0 million (tax effected), which are indefinite lived and included in deferred tax assets. In addition, a company, which is not part of the Australian tax consolidated group, had tax losses carried forward of $8.1 million (tax effected) for which a full valuation allowance has been recognized.