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INCOME TAXES | 9 Months Ended
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Sep. 30, 2024
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES Our estimated annual effective tax rate (EAETR) is based on full-year expectations of pretax earnings, statutory tax rates and permanent differences between book and tax accounting such as percentage depletion. For interim financial reporting, we calculate our quarterly income tax provision in accordance with the EAETR. Each quarter, we update our EAETR based on our revised full-year expectation of pretax earnings and calculate the income tax provision so that the year-to-date income tax provision reflects the EAETR. Significant judgment is required in determining our EAETR. In the third quarter of 2024, we recorded income tax expense from continuing operations of $85.2 million compared to $85.8 million in the third quarter of 2023. The tax expense is comparable to the amount recorded in the third quarter of 2023, as the reduction in pretax earnings in the third quarter of 2024 was primarily due to a goodwill impairment (see Note 15), the majority of which was non-tax deductible. For the first nine months of 2024, we recorded income tax expense from continuing operations of $208.5 million compared to $194.4 million for the first nine months of 2023. The increase in tax expense was primarily due to a goodwill impairment recorded in the third quarter of 2024, the majority of which was non-tax deductible, and a discrete benefit recognized in the first nine months of 2023 related to a 2022 business disposition, partially offset by lower pretax earnings. In August 2022, the Inflation Reduction Act (IRA) was signed into law, effective for tax years beginning on or after January 1, 2023. The IRA introduced a corporate alternative minimum tax (CAMT) of 15% applicable to corporations with adjusted financial statement income in excess of $1 billion, as well as certain climate-related tax provisions. We were not subject to CAMT in 2023 and do not anticipate being subject to CAMT in 2024. As discussed in Note 8, in May 2022, Mexican government officials unexpectedly and arbitrarily shut down our Calica operations in Mexico. In 2023, Calica had deferred tax assets (including net operating losses) of $27.4 million against which we have a full valuation allowance recorded. In 2024, we project a $6.5 million increase in deferred tax assets against which a valuation allowance was recorded as a component of the EAETR in the first nine months of 2024. A majority of the deferred tax assets relate to a net operating loss (NOL) carryforward which would expire between 2032 and 2034 if not utilized. Should the Mexican government lift the shutdown and/or if we are successful in our North American Free Trade Agreement (NAFTA) claim, we will reevaluate the need for a valuation allowance against the deferred tax assets. We project Alabama NOL carryforward deferred tax assets at December 31, 2024 of $68.4 million against which we have a valuation allowance of $49.5 million. Almost all of the Alabama NOL carryforward would expire between 2024 and 2029 if not utilized. A summary of our deferred tax assets and liabilities is included in Note 9 “Income Taxes” in our Annual Report on Form 10-K for the year ended December 31, 2023.

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