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INCOME TAXES | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES The components of income before income taxes were as follows:
For the years ended December 31, |  | 2024 |  | 2023 |  | 2022
Domestic |  | $ | 1,796,428 |  |  | $ | 1,832,771 |  | $ | 1,816,622
Foreign |  | 677,508 |  |  | 339,093 |  |  | 100,449 |
Income before income taxes |  | $ | 2,473,936 |  |  | $ | 2,171,864 |  | $ | 1,917,071
The components of our provision for income taxes were as follows:
For the years ended December 31, |  | 2024 |  | 2023 |  | 2022
Current: |  |  |  |  |  |
Federal |  | $ | 23,345 |  |  | $ | 141,753 |  |  | $ | 121,968 |
State |  | 85,746 |  |  | 83,802 |  |  | 85,741 |
Foreign |  | 70,371 |  |  | 68,289 |  |  | 27,656 |
|  | 179,462 |  |  | 293,844 |  |  | 235,365 |
Deferred: |  |  |  |  |  |
Federal |  | 21,223 |  |  | 28,191 |  |  | 34,848 |
State |  | 3,616 |  |  | (9,531) |  |  | 3,393 |
Foreign |  | 48,396 |  |  | (2,427) |  |  | (1,352) |
|  | 73,235 |  |  | 16,233 |  |  | 36,889 |
Total provision for income taxes |  | $ | 252,697 |  |  | $ | 310,077 |  |  | $ | 272,254 |
Deferred taxes reflect temporary differences between the tax basis and financial statement carrying value of assets and liabilities. The significant temporary differences that comprised the deferred tax assets and liabilities are as follows:
December 31, |  | 2024 |  | 2023
Deferred tax assets: |  |  |  |
Post-retirement benefit obligations |  | $ | 23,503 |  |  | $ | 24,969 |
Accrued expenses and other reserves |  | 83,263 |  |  | 85,601 |
Stock-based compensation |  | 16,656 |  |  | 21,656 |
Derivative instruments |  | — |  |  | 12,268 |
Lease liabilities |  | 98,915 |  |  | 90,405 |
Accrued trade promotion reserves |  | 18,706 |  |  | 18,796 |
Net operating loss carryforwards |  | 98,159 |  |  | 110,342 |
Capital loss carryforwards |  | 8,002 |  |  | — |
Other |  | 87,525 |  |  | 83,011 |
Gross deferred tax assets |  | 434,729 |  |  | 447,048 |
Valuation allowance |  | (117,239) |  |  | (114,149) |
Total deferred tax assets |  | 317,490 |  |  | 332,899 |
Deferred tax liabilities: |  |  |  |
Property, plant and equipment, net |  | 295,911 |  |  | 271,465 |
Acquired intangibles |  | 254,884 |  |  | 228,711 |
Lease ROU assets |  | 78,852 |  |  | 71,150 |
Inventories |  | 10,736 |  |  | 13,250 |
Derivative instruments |  | 37,558 |  |  | — |
Pension |  | 8,440 |  |  | 10,001 |
Other |  | 18,287 |  |  | 39,566 |
Total deferred tax liabilities |  | 704,668 |  |  | 634,143 |
Net deferred tax liabilities |  | $ | (387,178) |  |  | $ | (301,244) |
Included in: |  |  |  |
Non-current deferred tax assets, net |  | $ | 37,065 |  |  | $ | 44,454 |
Non-current deferred tax liabilities, net |  | (424,243) |  |  | (345,698) |
Net deferred tax liabilities |  | $ | (387,178) |  |  | $ | (301,244) |
Changes in deferred taxes were primarily due to acquired intangibles, derivative instruments and accelerated tax depreciation on property, plant and equipment. The valuation allowances as of December 31, 2024 and 2023 were primarily related to various foreign jurisdictions' net operating loss carryforwards and other deferred tax assets that we do not expect to realize. The following table reconciles the federal statutory income tax rate with our effective income tax rate:
For the years ended December 31, |  | 2024 |  | 2023 |  | 2022
Federal statutory income tax rate |  | 21.0 | % |  | 21.0 | % |  | 21.0 | %
Increase (reduction) resulting from: |  |  |  |  |  |
State income taxes, net of Federal income tax benefits |  | 2.4 |  |  | 2.8 |  |  | 3.2 |
Foreign rate differences |  | (1.2) |  |  | (1.0) |  |  | (0.1) |
Historic and solar tax credits |  | (9.4) |  |  | (9.5) |  |  | (9.9) |
Tax contingencies |  | (1.6) |  |  | 1.1 |  |  | 0.4 |
Stock compensation |  | (0.2) |  |  | (0.5) |  |  | (0.7) |
Other, net |  | (0.8) |  |  | 0.4 |  |  | 0.3 |
Effective income tax rate |  | 10.2 | % |  | 14.3 | % |  | 14.2 | %
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
December 31, |  | 2024 |  | 2023
Balance at beginning of year |  | $ | 149,625 |  |  | $ | 148,345 |
Additions for tax positions taken during prior years |  | 7,207 |  |  | 11,567 |
Reductions for tax positions taken during prior years |  | (4,913) |  |  | (26) |
Additions for tax positions taken during the current year |  | 9,339 |  |  | 6,194 |
Settlements |  | (201) |  |  | (9,838) |
Expiration of statutes of limitations |  | (43,479) |  |  | (6,617) |
Balance at end of year |  | $ | 117,578 |  |  | $ | 149,625 |
The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was $88,230 as of December 31, 2024 and $122,706 as of December 31, 2023. We report accrued interest and penalties related to unrecognized tax benefits in income tax expense. We recognized a net tax benefit of $7,068 in 2024, and a net tax expense of $12,027 and $4,862 in 2023 and 2022, respectively, for interest and penalties. Accrued net interest and penalties were $30,286 as of December 31, 2024 and $37,355 as of December 31, 2023. The Company and its subsidiaries file tax returns in the United States, including various state and local returns, and in other foreign jurisdictions. We are routinely audited by taxing authorities in our filing jurisdictions, and a number of these disputes are currently underway, including multi-year controversies at various stages of review, negotiation and litigation in Mexico, Canada, Switzerland and the United States. The outcome of tax audits cannot be predicted with certainty, including the timing of resolution or potential settlements. If any issues addressed in our tax audits are resolved in a manner not consistent with management’s expectations, we could be required to adjust our provision for income taxes in the period such resolution occurs. Based on our current assessments, we believe adequate provision has been made for all income tax uncertainties. We reasonably expect reductions in the liability for unrecognized tax benefits of approximately $5,462 within the next 12 months because of the expiration of statutes of limitations and settlements of tax audits. As of December 31, 2024, we had approximately $1.1 billion of undistributed earnings of our international subsidiaries. We continue to reinvest the remainder of the earnings outside of the United States for which there would be a material tax implication to distributing, such as withholding tax, for the foreseeable future and, therefore, have not recognized additional tax expense on these earnings beyond the one-time U.S. repatriation tax due under the 2017 Tax Cuts and Jobs Act. Organization for Economic Cooperation Development The Organization for Economic Cooperation and Development (“OECD”) introduced Global Anti-Base Erosion and Profit Shifting Pillar Two regulations which aim to ensure that multi-national entities that exceed the threshold revenue levels are subject to a minimum effective tax rate of 15% in jurisdictions where they operate. Numerous countries, including European Union member states, have enacted, or are expected to enact, related legislation with general implementation of a global minimum tax as of January 1, 2025. The Company is subject to OECD Pillar Two regulations, which may result in additional tax liabilities in jurisdictions where the effective tax rate falls below the 15% threshold. The Company has evaluated and will continue to monitor the impact of these new rules but does not anticipate that they will have a material impact on the Company’s effective tax rate. Investments in Partnerships Qualifying for Tax Credits We invest in partnerships which make equity investments in projects eligible to receive federal historic and energy tax credits. The investments are accounted for under the equity method and reported within other non-current assets in our Consolidated Balance Sheets. The tax credits, when realized, are recognized as a reduction of tax expense under the flow-through method, at which time the corresponding equity investment is written-down to reflect the remaining value of the future benefits to be realized. For the years ended December 31, 2024, 2023 and 2022 we recognized investment tax credits and related outside basis difference benefits totaling $300,597, $251,827 and $228,819, respectively, and we wrote-down the equity investment by $243,311, $210,484 and $188,286, respectively, to reflect the realization of these benefits. The equity investment write-down is reflected within other (income) expense, net in the Consolidated Statements of Income (see Note 17).

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