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Income Taxes

12 Months Ended

Dec. 31, 2024

Income Taxes

Income Taxes

Note 4. Income Taxes

Components of earnings before income taxes and noncontrolling interests for the years ended December 31 are as follows (in thousands):

​	​	​	​	​	​	​	​	​	​	​
​	​	2024		​	2023		​	2022		​
​	United States income	$	1,992,814	​	$	3,198,048	​	$	4,996,762	​
​	Foreign income (loss)	​	(9,933)	​	​	20,895	​	​	24,307	​
​	Total income before income taxes	$	1,982,881	​	$	3,218,943	​	$	5,021,069	​

​

The company files a consolidated federal income tax return. The provision for income tax expense for the years ended December 31 is as follows (in thousands):

​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​
​	​	2024		​	2023		​	2022		​
​	Current income tax expense	​	​	​	​	​	​	​	​	​
​	Federal	$	409,586	​	$	600,499	​	$	946,016	​
​	State	​	57,942	​	​	91,965	​	​	152,758	​
​	Foreign	​	7,980	​	​	3,482	​	​	8,605	​
​	Total current	​	475,508	​	​	695,946	​	​	1,107,379	​
​	Deferred income tax expense (benefit)	​	​	​	​	​	​	​	​	​
​	Federal	​	(26,311)	​	​	38,172	​	​	22,168	​
​	State	​	(12,476)	​	​	15,355	​	​	13,333	​
​	Foreign	​	(3,796)	​	​	2,138	​	​	(1,303)	​
​	Total deferred	​	(42,583)	​	​	55,665	​	​	34,198	​
​	Total income tax expense	$	432,925	​	$	751,611	​	$	1,141,577	​

​

A reconciliation of the statutory rates to the actual effective tax rates for the years ended December 31 are as follows:

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

2024

​

2023

​

2022

​

​

Statutory federal tax rate

​

21.0

%

​

​

21.0

%

​

​

21.0

%

​

​

State income taxes, net of federal benefit

​

1.8

​

​

​

2.6

​

​

​

2.6

​

​

​

Federal research & development credits

​

(0.9)

​

​

​

(0.2)

​

​

​

(0.6)

​

​

​

Other permanent differences

​

(0.1)

​

​

​

(0.1)

​

​

​

(0.3)

​

​

​

Effective tax rate

​

21.8

%

​

​

23.3

%

​

​

22.7

%

​

​

​

Note 4. Income Taxes (Continued)

Significant components of the company’s deferred tax assets and liabilities at December 31 are as follows (in thousands):

​	​	​	​	​	​	​	​
​	​	2024		​	2023		​
​	Deferred tax assets	​	​	​	​	​	​
​	Accrued expenses and allowances	$	41,031	​	$	41,894	​
​	Inventories	​	6,892	​	​	10,685	​
​	Net operating loss carryforwards	​	24,381	​	​	7,663	​
​	Amortizable assets	​	39,657	​	​	5,798	​
​	Other	​	5,916	​	​	9,149	​
​	​	​	117,877	​	​	75,189	​
​	Less: valuation allowance	​	(1,150)	​	​	(816)	​
​	Total net deferred tax assets	​	116,727	​	​	74,373	​
​	​	​	​	​	​	​	​
​	Deferred tax liabilities	​	​	​	​	​	​
​	Property, plant and equipment	​	(1,014,515)	​	​	(1,013,045)	​
​	Other	​	(4,398)	​	​	(6,096)	​
​	Total deferred tax liabilities	​	(1,018,913)	​	​	(1,019,141)	​
​	Net deferred tax liability	$	(902,186)	​	$	(944,768)	​

​

Certain wholly-owned and controlled subsidiaries of the company file separate federal and state income tax returns. One of the controlled subsidiaries generated federal net operating loss carryforwards in the years 2018 and prior, which were fully utilized as of December 31, 2024, but continues to have state net operating loss carryforwards which expire in the years 2034 through 2039. Annually, the company evaluates the realizability of the net deferred tax assets for this controlled subsidiary. In completing this evaluation, the company considers all available positive and negative evidence in order to determine whether, based on the weight of the evidence, a valuation allowance for its deferred tax assets is necessary. Such evidence includes current operating results, historical results, future reversals of existing taxable temporary differences and expectations for future taxable income (exclusive of the reversal of temporary differences and carryforwards), as well as the implementation of feasible and prudent tax planning strategies. Based on the evidence, the company maintained a valuation allowance of $1,150,000 and $816,000 as of December 31, 2024, and 2023, respectively, with respect to certain state tax credits of the controlled subsidiary.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):

​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​
​	​	2024		​	2023		​	2022		​
​	Balance at January 1	$	31,258	​	$	28,646	​	$	20,466	​
​	Increases related to current year tax positions	​	5,115	​	​	1,500	​	​	9,600	​
​	Increases related to prior year tax positions	​	263	​	​	1,798	​	​	364	​
​	Decreases related to prior year tax positions	​	(6,949)	​	​	(686)	​	​	(1,784)	​
​	Balance at December 31	$	29,687	​	$	31,258	​	$	28,646	​

​

Included in the balance of unrecognized tax benefits at December 31, 2024 and 2023 are potential benefits of $26.4 million and $27.8 million, respectively, that, if recognized, would affect the effective tax rate. The company recognizes interest and penalties related to its tax contingencies on a net-of-tax basis in income tax expense. During the years ended December 31, 2024, 2023, and 2022, the company recognized expense from the increase of interest expense and penalties of $710,000, $1,560,000, and $480,000, respectively, net of tax. In addition to the unrecognized tax benefits in the table above, the company had $4.2 million and $3.2 million accrued for the payment of interest and penalties at December 31, 2024 and 2023, respectively.

​

Note 4. Income Taxes (Continued)

It is reasonably possible that the amount of unrecognized tax benefits could change in the next twelve months in an amount ranging from zero to $12.0 million, as a result of the expiration of the statute of limitations and other federal and state income tax audits. The company files income tax returns in the U.S. federal jurisdiction as well as income tax returns in various state jurisdictions. The tax years 2021 through 2023 remain open to examination by the Internal Revenue Service and various state and local jurisdictions.

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The entire disclosure for income tax.

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