Ecovyst, Inc. Current report filing

Income Tax (Tables)

12 Months Ended

Dec. 31, 2020

Income (loss) before income taxes and noncontrolling interest within or outside the United States are shown below:

The provision (benefit) for income taxes as shown in the accompanying consolidated statements of income consists of the following:


	Years ended December 31,
	2020			2019			2018
Current:
Federal	$	—		$	(3	)	$	—
State		1,982			2,141			2,784
Foreign		6,013			6,263			3,330

		7,995			8,401			6,114
Deferred:
Federal		(58,125	)		1,320			2,575
State		(2,596	)		2,244			(768	)
Foreign		661			334			56

		(60,060	)		3,898			1,863

(Benefit) provision for income taxes	$	(52,065	)	$	12,299		$	7,977

A reconciliation of income tax expense (benefit) at the U.S. federal statutory income tax rate to actual income tax expense is as follows:


	Years ended December 31,
	2020			2019			2018
Tax at statutory rate	$	466		$	9,118		$	2,778
State income taxes, net of federal income tax benefit		(401	)		6,725			2,002
Impact of US Tax Reform		(105	)		1,003			1,129
Change in valuation allowances		135			1,415			5,070
Rate changes		4,274			1,054			(4,016	)
Foreign withholding taxes		—			(6,651	)		—
Foreign tax rate differential		165			217			(36	)
Foreign tax credit s		(56,359	)		—			—
Other, net		(240	)		(582	)		1,050

Provision (benefit) for income taxes	$	(52,065	)	$	12,299		$	7,977

Deferred tax assets (liabilities) are comprised of the following:


	December 31,
	2020			2019
Deferred tax assets:
Net operating loss carryforwards	$	24,467		$	73,936
Section 163(j) interest disallowance carryforward		266			16,535
Pension		9,149			11,384
Operating lease liability		10,816			10,657
Other		18,997			18,334
State credits		12,733			12,280
Foreign tax credit		62,752			—
Valuation allowance		(25,106	)		(27,040	)

	$	114,074		$	116,086
Deferred tax liabilities:
Depreciation	$	(92,922	)	$	(91,272	)
Inventory		(4,946	)		(11,481	)
Intangible assets		(117,063	)		(143,387	)
Operating lease right-of-use assets		(11,250	)		(10,877	)
Other		(13,743	)		(20,067	)

	$	(239,924	)	$	(277,084	)

Net deferred tax liabilities	$	(125,850	)	$	(160,998	)

The following table summarizes the activity related to the Company’s gross unrecognized tax benefits:


	Years ended December 31,
	2020		2019
Balance at beginning of period	$	8,080	$	8,926
Increases related to prior year tax positions		—		15
Decreases related to prior year tax positions		—		(861)
Increases related to current year tax positions		164		—
Decreases related to settlements with taxing authorities		(457)		—

Balance at end of period	$	7,787	$	8,080

The following describes the open tax years, by significant tax jurisdiction, as of December 31, 2020:

(1)	Includes federal as well as local jurisdictions

Cash payments for income taxes, net of refunds, are as follows: