INCOME TAXES

12 Months Ended

Dec. 31, 2024

INCOME TAXES

INCOME TAXES

NOTE F – INCOME TAXES

Significant components of the provision for income taxes for the years ended December 31 were as follows:

	2024		2023		2022
	(in thousands)
Current provision on continuing operations:
Federal	$	18,195	$	38,860	$	79,477
State		3,793		10,949		19,713
Foreign		928		508		869
		22,916		50,317		100,059
Deferred provision (benefit) on continuing operations:
Federal		17,532		(4,882)		(5,591)
State		5,058		(682)		(793)
Foreign		(153)		(2)		(20)
		22,437		(5,566)		(6,404)
Total provision for income taxes on continuing operations	$	45,353	$	44,751	$	93,655
Current provision on discontinued operations:
Federal	$	169	$	14,656	$	901
State		36		3,599		236
		205		18,255		1,137
Deferred provision on discontinued operations:
Federal		—		—		114
State		—		—		40
		—		—		154
Total provision for income taxes on discontinued operations	$	205	$	18,255	$	1,291
Total provision for income taxes	$	45,558	$	63,006	$	94,946

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the deferred tax assets and liabilities of continuing operations at December 31 were as follows:

	2024		2023
	(in thousands)
Deferred tax assets:
Accrued expenses	$	66,211	$	60,842
Operating lease right-of-use liabilities		56,119		53,589
Multiemployer pension fund withdrawal		4,688		4,871
Postretirement liabilities other than pensions		3,428		3,389
Share-based compensation		2,239		5,249
Federal and state net operating loss carryovers		4,383		1,511
Receivable allowances		2,666		1,951
Other(1)		2,580		794
Total deferred tax assets		142,314		132,196
Valuation allowance		(1,731)		(1,751)
Total deferred tax assets, net of valuation allowance		140,583		130,445
Deferred tax liabilities:
Amortization, depreciation, and basis differences for property, plant and equipment, and other long-lived assets		121,400		118,211
Operating lease right-of-use assets		48,271		43,938
Intangibles		33,680		10,256
Prepaid expenses		6,345		5,685
Total deferred tax liabilities		209,696		178,090
Net deferred tax liabilities	$	(69,113)	$	(47,645)

1) For 2023, certain reclassifications have been made to conform to the current year presentation, including combining immaterial amounts in “Other.”

Reconciliation between the effective income tax rate, as computed on income from continuing operations before income taxes, and the statutory federal income tax rate for the years ended December 31 is presented in the following table:

	2024			2023			2022
	(in thousands, except percentages)
Income tax provision at the statutory federal rate of 21.0%	$	45,930		$	39,252		$	81,544
Federal income tax effects of:
State income taxes		(1,859)			(2,156)			(3,973)
Settlement of share-based compensation(1)		(9,169)			(3,989)			(6,693)
Non-deductible compensation under IRC Section 162(m)(2)		3,668			3,103			5,174
Other(2)		(2,843)			(2,232)			(2,166)
Federal income tax provision		35,727			33,978			73,886
State income tax provision		8,851			10,267			18,920
Foreign income tax provision		775			506			849
Total provision for income taxes	$	45,353		$	44,751		$	93,655
Effective tax rate		20.7	%		23.9	%		24.1	%

(1) Increase in tax benefit from vested RSUs for 2024, compared to 2023 and 2022, is primarily due to the vesting of RSUs granted in 2020 and 2021 at the end of a four-year and three-year period, respectively. RSUs granted subsequent to 2021 follow a graded vesting schedule, with RSUs vesting incrementally over a specified period of time, rather than fully vesting at the end of the vesting period.

(2) For 2023 and 2022, certain reclassifications have been made to conform to the current year presentation, including combining immaterial amounts in “Other” and breaking out non-deductible compensation under IRC Section 162(m), which was previously reported in “Non-deductible expenses.”

The Company's total effective tax rate was 20.8%, 24.4% and 24.1% for 2024, 2023 and 2022, respectively, including discontinued operations which are further discussed in Note D. The effective tax rate from discontinued operations was 25.5%, 25.5% and 26.6% for 2024, 2023 and 2022, respectively. State tax rates vary among states and average approximately 6.0%, although some state rates are higher, and a small number of states do not impose an income tax.

Income taxes paid, excluding income tax refunds, totaled $71.1 million, $115.7 million, and $148.7 million in 2024, 2023, and 2022, respectively. Income tax refunds totaled $33.1 million, $36.4 million, and $42.3 million in 2024, 2023, and 2022, respectively.

Under Accounting Standards Codification Topic 718, Compensation – Stock Compensation, the Company may experience volatility in its income tax provision as a result of recording all excess tax benefits and tax deficiencies in the income statement upon settlement of awards, which occurs primarily during the second quarter of each year. The 2024, 2023, and 2022 tax rates reflect a tax benefit of 5.2%, 2.8%, and 2.1%, respectively.

At December 31, 2024, the Company had gross federal net operating loss carryforwards of $0.5 million, with a valuation allowance of less than $0.1 million that could not be used. At December 31, 2024, the Company had total gross state net operating losses of $101.4 million. Gross state net operating losses of $9.8 million are for subsidiaries that have had taxable losses for three or more prior tax years or have other nexus issues that reduce the likelihood of the utilization of the losses. These net operating loss carryforwards have been fully reserved with valuation allowances of $0.7 million and $0.8 million at December 31, 2024 and 2023, respectively.

As the Canadian tax rate is higher than the U.S. tax rate, it is unlikely that foreign tax credit carryforwards will be useable, as U.S. taxes will be paid at a lower rate than the tax rates in Canada. Thus, the foreign tax credit carryover is fully reserved, resulting in valuation allowances of $1.0 million at December 31, 2024 and 2023.

Consolidated federal income tax returns filed for tax years through 2020 are closed by the applicable statute of limitations. The Company is currently under examination by one state and one foreign taxing authority at December 31, 2024. No federal examination is in process at December 31, 2024.