Taxes on Income

12 Months Ended

Dec. 31, 2022

Taxes on Income [Abstract]

Taxes on Income

(9) Taxes on Income

Earnings (loss) before taxes on income and details of the provision (benefit) for taxes on income were as follows (in thousands):

	Year Ended December 31,
	2022		2021			2020
Earnings (loss) before taxes on income:
United States	$	164,590	$	(290,181	)	$	(461,569	)
Foreign		385		(420	)		218
	$	164,975	$	(290,601	)	$	(461,351	)
Provision (benefit) for taxes on income:
U.S. Federal:
Current	$	513	$	(460	)	$	(218,613	)
Deferred		34,980		(48,843	)		37,436
	$	35,493	$	(49,303	)	$	(181,177	)
U.S. State:
Current	$	3,793	$	1,560		$	3,421
Deferred		2,802		4,424			(12,273	)
	$	6,595	$	5,984		$	(8,852	)
Foreign:
Current	$	126	$	(511	)	$	270
	$	126	$	(511	)	$	270
Consolidated:
Current	$	4,432	$	589		$	(214,922	)
Deferred		37,782		(44,419	)		25,163
	$	42,214	$	(43,830	)	$	(189,759	)

On November 13, 2021, the voters of the state of Louisiana approved a constitutional amendment that removed the corporate tax deduction for federal income taxes paid and lowered the corporate income tax rate from 8% to 7.5% effective January 1, 2022. The result of the amendment was an increase in the effective Louisiana state income tax rate, net of deduction for federal income tax, from 6.3% to 7.5%. As a result of the amendment, the Company recognized a one-time deferred tax provision of $5.7 million during the fourth quarter of 2021 due to remeasuring the Company’s Louisiana and U.S. deferred tax assets and liabilities based on the new effective Louisiana state income tax rate.

On March 27, 2020, the United States Congress passed and the President signed the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) into law to address the COVID-19 pandemic. One provision of the CARES Act allows net operating losses generated in 2018 through 2020 to be carried back up to five years. Pursuant to this provision of the CARES Act, the Company recorded a net federal current benefit for taxes on income for the year ended December 31, 2020 due to carrying back net operating losses

generated between 2018 and 2020 used to offset taxable income generated between 2013 and 2017. Net operating losses carried back to tax years 2013 through 2017 are applied at a federal tax rate of 35% applicable to those tax years, compared to a 21% tax rate effective at December 31, 2020. Net operating losses generated in 2018 and 2019 were used to offset taxable income generated between 2013 and 2017 taxed at 35% resulting in a tax benefit of $59.7 million and a decrease in the Company’s deferred tax asset related to federal net operating losses of $88.3 million.

At December 31, 2022 and 2021, the Company had a federal income tax receivable of $70.4 million and $71.0 million, respectively, included in Accounts Receivable – Other on the balance sheet. During 2021, the Company received a tax refund of $119.5 million, including accrued interest, for its 2019 tax return related to net operating losses being carried back to offset taxable income generated between 2014 and 2017. During 2020, the Company received a tax refund of $30.6 million for its 2018 tax return related to net operating losses being carried back to offset taxable income generated during 2013.

The Company’s provision (benefit) for taxes on income varied from the statutory federal income tax rate due to the following:

	Year Ended December 31,
	2022			2021			2020
United States income tax statutory rate		21.0	%		21.0	%		21.0	%
State and local taxes, net of federal benefit		3.1			(1.7	)		1.2
CARES Act – net operating loss carryback		—			—			21.3
Other – net		1.5			(4.2	)		(2.4	)
		25.6	%		15.1	%		41.1	%

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities were as follows (in thousands):

	December 31,
	2022			2021
Deferred tax assets:
Allowance for doubtful accounts	$	1,556		$	1,657
Inventory		11,679			13,180
Insurance accruals		4,856			4,052
Deferred compensation		7,703			6,081
Unrealized (gain) loss on defined benefit plans		(5,532	)		6,126
Goodwill and other intangibles		52,847			65,852
Operating loss carryforwards		79,699			89,966
Retirement benefits		5,472			7,194
Other		9,962			6,247
		168,242			200,355
Valuation allowances		(19,960	)		(20,095	)
		148,282			180,260
Deferred tax liabilities:
Property		(671,830	)		(655,550	)
Deferred state taxes		(87,445	)		(83,491	)
Other		(14,891	)		(15,371	)
		(774,166	)		(754,412	)
	$	(625,884	)	$	(574,152	)

During 2022, the Company generated federal taxable income which was completely offset by federal net operating loss carryforwards. The Company had federal operating loss deferred tax assets of $47.9 million and $57.2 million at December 31, 2022 and 2021, respectively.

The Company had state operating loss deferred tax assets of $26.6 million and $27.6 million at December 31, 2022 and 2021, respectively. The valuation allowance for state deferred tax assets as of December 31, 2022 and 2021 was $14.8 million and $14.9 million, respectively, related to the Company’s state net operating loss carryforwards based on the Company’s determination that it is more likely than not that the deferred tax assets will not be realized. Expiration of these state net operating loss carryforwards vary by state through 2029 and none will expire in fiscal 2023.

As of December 31, 2022 and 2021, the Company had a Canadian net operating loss carryforward of $5.2 million which expires between 2037 and 2042. A full valuation allowance has been provided for this asset.

The Company or one of its subsidiaries files income tax returns in the United States federal jurisdiction and various state jurisdictions. The Company’s federal income tax returns for the 2017 through 2020 tax years are currently under examination. With few exceptions, the Company and its subsidiaries’ state income tax returns are open to audit under the statute of limitations for the 2016 through 2021 tax years.

As of December 31, 2022, the Company has provided a liability of $0.8 million for unrecognized tax benefits related to various income tax issues which includes interest and penalties. The amount that would impact the Company’s effective tax rate, if recognized, is $0.6 million, with the difference between the total amount of unrecognized tax benefits and the amount that would impact the effective tax rate being primarily related to the federal tax benefit of state income tax items. It is not reasonably possible to determine if the liability for unrecognized tax benefits will significantly change prior to December 31, 2023 due to the uncertainty of possible examination results.

A reconciliation of the beginning and ending amount of the liability for unrecognized tax benefits is as follows (in thousands):

	Year Ended December 31,
	2022			2021			2020
Balance at beginning of year	$	737		$	783		$	883
Additions based on tax positions related to the current year		13			13			262
Additions for tax positions of prior years		66			281			114
Reductions for tax positions of prior years		(154	)		(340	)		(266	)
Settlements		—			—			(210	)
Balance at end of year	$	662		$	737		$	783

The Company accounts for interest and penalties related to uncertain tax positions as part of its provision for federal and state income taxes. The Company had $0.1 million of accrued liabilities for the payment of interest and penalties at both December 31, 2022 and 2021.