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INCOME TAXES
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The components of earnings from continuing operations before income taxes are as follows:
in millions202420232022
Earnings from Continuing Operations before Income Taxes
Domestic$1,196.1 $1,251.0 $788.7 
Foreign(24.0)(5.9)(0.6)
Total$1,172.1 $1,245.1 $788.1 
Income tax expense (benefit) from continuing operations consists of the following:
in millions202420232022
Income Tax Expense (Benefit) from Continuing Operations
Current
Federal$204.7 $274.8 $85.2 
State and local51.8 64.0 43.6 
Foreign4.8 4.8 4.6 
Total$261.3 $343.6 $133.4 
Deferred
Federal$13.6 $(44.1)$43.4 
State and local(20.5)(4.2)3.3 
Foreign(3.0)4.1 12.9 
Total$(9.9)$(44.2)$59.6 
Total expense$251.4 $299.4 $193.0 
Income tax expense (benefit) differs from the amount computed by applying the federal statutory income tax rate to earnings from continuing operations before income taxes. The sources and tax effects of the differences are as follows:
dollars in millions202420232022
Income tax expense at the federal statutory tax rate$246.1 21.0 %$261.5 21.0 %$165.5 21.0 %
Expense (Benefit) from Income Tax Differences
Statutory depletion(41.0)(3.5 %)(39.0)(3.1 %)(30.6)(3.9 %)
State and local income taxes, net of federal income tax benefit51.4 4.4 %48.7 3.9 %37.5 4.8 %
Nondeductible goodwill16.2 1.4 %16.2 1.3 %10.7 1.4 %
Valuation allowance0.1 0.0 %10.3 0.8 %14.5 1.8 %
Deferred tax rate remeasurement
(21.9)(1.9 %)0.0 0.0 %0.0 0.0 %
Other, net0.5 0.0 %1.7 0.1 %(4.6)(0.6 %)
Total income tax expense / Effective tax rate$251.4 21.4 %$299.4 24.0 %$193.0 24.5 %
During the fourth quarter of 2024, we determined that the rate at which our deferred tax liabilities will reverse has decreased, largely as a result of changes in our state tax profile from the Wake Stone acquisition. As a result, we remeasured our deferred tax liabilities and recorded a tax benefit of $21.9 million.
Deferred taxes on the balance sheet result from temporary differences between the amount of assets and liabilities recognized for financial reporting and tax purposes. The components of the net deferred income tax liability at December 31 are as follows:
in millions20242023
Deferred Tax Assets
Operating lease liabilities$140.8 $139.1 
Asset retirement obligations & other reserves86.6 87.1 
State net operating losses74.7 79.6 
Incentive compensation52.4 57.6 
State bonus depreciation55.7 54.7 
Capitalized research expenditures
39.7 25.4 
Employee benefits22.2 22.9 
Other81.8 56.9 
Total gross deferred tax assets$553.9 $523.3 
Valuation allowance(87.7)(89.5)
Total net deferred tax asset$466.2 $433.8 
Deferred Tax Liabilities
Property, plant & equipment$1,244.8 $907.1 
Goodwill/other intangible assets323.2 334.4 
Operating lease right-of-use assets129.8 128.2 
Other104.9 93.0 
Total deferred tax liabilities$1,802.7 $1,462.7 
Deferred income tax liability, net$1,336.5 $1,028.9 
The December 31, 2024 net deferred tax liability reflects a $307.6 million increase from the prior year. This increase includes a net deferred tax liability of $311.2 million related to our acquisition of Wake Stone, reflecting book over tax basis differences, of which $328.9 million relates to property, plant and equipment.
At December 31, 2024, we have Alabama state NOL carryforward deferred tax assets of $68.5 million, against which we have a valuation allowance of $50.8 million. $4.9 million of the Alabama NOL carryforward expired in 2024, resulting in additional tax expense of $1.3 million over the previous amount of valuation allowance recorded. Almost all of the remaining Alabama NOL carryforward would expire between 2025 and 2029 if not utilized.
As discussed in Note 12, in May 2022, Mexican government officials unexpectedly and arbitrarily shut down our Calica operations in Mexico. In 2024, Calica had deferred tax assets (including NOLs) of $27.5 million. Although Calica continues to record losses, the devaluation of the Mexican peso during the year resulted in an immaterial change to its deferred tax assets in U.S. dollars. As a result, we recorded a charge to increase the valuation allowance by $0.1 million to $27.5 million in 2024. The Calica NOL deferred tax asset carryforward of $23.3 million would expire between 2032 and 2033 if not utilized. Should the Mexican government lift the shutdown and/or if we are successful in our NAFTA claim, we will reevaluate the need for a valuation allowance against the deferred tax assets.
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 or in 2024.
The Organization for Economic Co-operation and Development (OECD) has developed a framework to enact a two-pillar solution to address the challenges arising from the digitization of a global economy. Pillar Two introduced a global minimum effective tax rate where multinational groups with consolidated revenue over €750.0 million are subject to a minimum effective tax rate of 15% on income arising in low-tax jurisdictions. Pillar Two legislation has been enacted in certain jurisdictions in which we operate and it was effective on January 1, 2024. Most jurisdictions in which we operate have tax rates in excess of 15%. However, our operations in the Bahamas are not eligible for transitional safe harbor relief, and we have reflected an immaterial amount of Pillar Two tax in our effective tax rate for 2024.
We consider the undistributed earnings, if any, related to the investment in our Canadian and Honduran subsidiaries and Canadian investment in its U.S. subsidiary to be indefinitely reinvested; accordingly, no foreign withholding or other income taxes have been provided thereon. Due to complexities in the tax laws, it is not practicable to estimate the amount of deferred income taxes not recorded that are associated with these earnings. We have not, nor do we currently anticipate in the foreseeable future, the need to repatriate funds (other than for the repayment of intercompany loan obligations) to satisfy domestic liquidity needs arising in the ordinary course of business.
Changes in our liability for unrecognized tax benefits for the years ended December 31 are as follows:
in millions202420232022
Unrecognized tax benefits as of January 1$21.0 $18.7 $10.8 
Increases for tax positions related to
Prior years0.8 0.3 4.6 
Current year6.7 4.8 6.6 
Decreases for tax positions related to
Prior years0.0 (0.3)(0.2)
Settlements
(0.3)(0.2)0.0 
Expiration of applicable statute of limitations(3.3)(2.3)(3.1)
Unrecognized tax benefits as of December 31$24.9 $21.0 $18.7 
We classify interest and penalties recognized on the liability for unrecognized tax benefits as income tax expense. Interest and penalties recognized as income tax expense were $1.5 million, $1.5 million and $0.8 million in 2024, 2023 and 2022, respectively. The balance of accrued interest and penalties included in our liability for unrecognized tax benefits as of December 31 was $4.8 million, $3.3 million and $1.8 million in 2024, 2023 and 2022, respectively. Our liability for unrecognized tax benefits at December 31 in the table above includes $23.7 million, $19.8 million and $17.6 million in 2024, 2023 and 2022, respectively, that would affect the effective tax rate if recognized. We anticipate no single tax position generating a significant increase or decrease in our liability for unrecognized tax benefits within 12 months of this reporting date.
We file income tax returns in U.S. federal, various state and foreign jurisdictions. With few exceptions, we are no longer subject to U.S. federal, state or foreign exams by tax authorities for years prior to 2021.
As of December 31, 2024, income tax receivables of $4.7 million and $0.1 million are included in other accounts and notes receivable and other current assets, respectively, in the accompanying Consolidated Balance Sheet. There were similar receivables of $1.3 million and $0.2 million recorded in other accounts and notes receivable and other current assets, respectively, as of December 31, 2023.