Company: DXPE
Filing Date: 2025-03-10
Form Type: 10-K
Source: 0001020710-25-000036
Chunk: 80

Company: DXP ENTERPRISES INC
Filing Date: 2025-03-10
Form: 10-K
Item: Item 8
Chunk 80
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7,902)(8,363)Property and equipment(10,204)(7,885)Deferred compensation2,304 (215)Unremitted foreign earnings(421)(421)Method changes(393)(342)Other(243)(643)Total deferred tax liability$(41,706)$(36,345)Net deferred tax asset$16,948 $3,504 

67

The Company records a valuation allowance when it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of the deferred tax assets depends on the ability to generate sufficient taxable income of the appropriate character in the future and in the appropriate taxing jurisdictions. If the Company was to determine that it would be able to realize the deferred tax assets in the future in excess of their net recorded amount, the Company would make an adjustment to the valuation allowance, which would reduce the provision for income taxes. As of December 31, 2024, the valuation allowance primarily relates to state operating loss and foreign capital loss carryforwards. The following summarizes changes in the balance of valuation allowances on deferred tax assets (in thousands):  202420232022Balance at January 1$(278)$(4)$(4)Changes due to state operating loss and foreign capital loss carryforwards57 (274)— Balance at December 31$(221)$(278)$(4)Expected tax benefit on carryforwards available for use on future income tax returns, prior to valuation allowance, at December 31, 2024, are as follows (in thousands):   Domestic  ForeignExpirationNet operating loss - foreign$— $562 2034-2043Net operating loss - federal (100%)32 — 2037Net operating loss - federal (80%)447 — IndefiniteNet operating loss - state217 — IndefiniteCapital loss carryforward - foreign— 4 IndefiniteForeign tax credits64 — 2025Texas research and development tax credits2,232 — 2037-2043Louisiana research and development tax credits$10 $— 2025-2027Changes in the balance of unrecognized tax benefits excluding interest and penalties on uncertain tax positions are as follows (in thousands):  Assets (Liabilities)  202420232022Balance at January 1,$(5,755)$(5,918)$(6,316)   Decreases related to prior year tax positions