Company: CODI-PB
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0001345126-25-000015
Chunk: 264

Company: Compass Diversified Holdings
Filing Date: 2025-02-27
Form: 10-K
Item: Item 16
Chunk 264
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178)Total deferred tax liabilities$(227,262)$(218,359)Total net deferred tax liability$(119,948)$(118,882)(1)Primarily relates to the Trust and 5.11, Arnold and Velocity operating segments. As of December 31, 2024 and 2023, the Company had approximately $227.3 million and $218.4 million, respectively in deferred tax liabilities. A significant portion of the balance in deferred tax liabilities reflects temporary 

F-46

COMPASS DIVERSIFIED HOLDINGSNOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

differences in the basis of property and equipment and intangible assets related to the Company’s purchase accounting adjustments in connection with the acquisition of certain of its businesses. For financial accounting purposes the Company has recognized a significant increase in the fair values of the intangible assets and property and equipment in certain of the businesses it acquired. For income tax purposes the existing, pre-acquisition tax basis of the intangible assets and property and equipment is utilized. In order to reflect the increase in the financial accounting basis over the existing tax basis, a deferred tax liability was recorded. This liability will decrease in future periods as these temporary differences reverse but may be replaced by deferred tax liabilities generated as a result of future acquisitions.At December 31, 2024 and 2023, the Company had U.S. Federal net operating loss carryforwards of approximately $40.6 million and $19.2 million, respectively. Approximately $10.6 million of these carryforwards will expire, if not utilized, beginning in 2036. The remaining balance of the Company's U.S. Federal net operating loss carryforwards do not expire and are subject to utilization limitations based on a percentage of taxable income in a given year. As of December 31, 2024 and 2023, the Company had net operating loss carryforwards for state income tax purposes of $50.6 million and $46.1 million, respectively. The Company’s state net operating loss carryforwards will expire, if not utilized, beginning in 2026. As of December 31, 2024 and 2023, the Company had foreign net operating loss carryforwards of $11.0 million and $10.2 million, respectively. The foreign net operating loss carryforwards will expire, if not utilized, beginning in 2024. As of December 31, 2024, the Company had