Matthews International Corporation Annual report pursuant to Section 13 and 15(d)

INCOME TAXES (Tables)

12 Months Ended

Sep. 30, 2024

The income tax provision (benefit) consisted of the following:

The reconciliation of the federal statutory tax rate to the consolidated effective tax rate was as follows:


	2024		2023		2022
Federal statutory tax rate	21.0	%	21.0	%	21.0	%
Effect of state income taxes, net of federal deduction	1.3	%	3.8	%	0.2	%
Foreign statutory taxes compared to federal statutory rate	19.6	%	(0.7)	%	1.6	%
Share-based compensation	(0.7)	%	3.6	%	(1.1)	%

Tax credits (net of withholding taxes)	3.6	%	(7.0)	%	1.2	%





Goodwill write-down	(4.9)	%	—	%	(11.2)	%

Nontaxable income	5.0	%	(7.5)	%	0.8	%
Nondeductible held-for-sale asset write-downs	(4.0)	%	—	%	—	%
Change in realizability of foreign deferred tax assets	(30.7)	%	(9.5)	%	(5.8)	%

Other	4.2	%	0.6	%	(2.5)	%
Effective tax rate	14.4	%	4.3	%	4.2	%

The components of deferred tax assets and liabilities at September 30, 2024 and 2023 are as follows:


	2024		2023
Deferred tax assets:
Pension and postretirement benefits	$	6,405	$	5,544
Accruals and reserves not currently deductible	16,992		11,158
Income tax credit carryforward	5,563		4,970
Operating and capital loss carryforwards	83,234		59,956
Stock options	8,266		8,007
Research and development capitalization	18,299		11,028
Operating lease liability	15,833		18,795
Interest carryforward	10,796		2,017
Other	6,057		999
Total deferred tax assets	171,445		122,474
Valuation allowances	(45,462)		(22,506)
Net deferred tax assets	125,983		99,968

Deferred tax liabilities:
Depreciation	(25,724)		(23,547)
Unrealized gains and losses	21		(2,969)
Goodwill and intangible assets	(95,828)		(97,415)
Revenue recognized over time	(27,467)		(21,226)
Operating lease right-of-use assets	(15,282)		(18,153)
Other	(843)		(5,644)
Total deferred tax liabilities	(165,123)		(168,954)

Net deferred tax liability	$	(39,140)	$	(68,986)

Changes in the total amount of gross unrecognized tax benefits (excluding penalties and interest) are as follows:


	2024		2023		2022
Balance, beginning of year	$	3,779	$	4,123	$	2,807

Increases for tax positions of prior years	378		100		1,393
Decreases for tax positions of prior years	—		—		(200)
Increases based on tax positions related to the current year	1,044		769		551

Decreases due to lapse of statute of limitation	(695)		(1,213)		(428)
Balance, end of year	$	4,506	$	3,779	$	4,123

As of September 30, 2024, the tax years that remain subject to examination by major jurisdiction generally are: