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INCOME TAXES.

12 Months Ended

Dec. 28, 2024

J.INCOME TAXES

Income tax provisions for the years ended December 28, 2024, December 30, 2023, and December 31, 2022 are summarized as follows (in thousands):


	2024		2023		2022
Currently Payable:
Federal	$	101,832	$	123,257	$	181,029
State and local		21,751		28,580		44,646
Foreign		12,877		10,808		17,336
		136,460		162,645		243,011
Net Deferred:
Federal		(10,951)		(2,249)		(8,561)
State and local		(2,074)		(3,223)		(3,657)
Foreign		(2,013)		(389)		(941)
		(15,038)		(5,861)		(13,159)
Total income tax expense	$	121,422	$	156,784	$	229,852

The components of earnings before income taxes consist of the following:


	2024		2023		2022
U.S.	$	496,245	$	633,816	$	876,071
Foreign		43,910		37,425		58,745
Total	$	540,155	$	671,241	$	934,816

The effective income tax rates are different from the statutory federal income tax rates for the following reasons:


	2024		2023		2022
Statutory federal income tax rate	21.0	%	21.0	%	21.0	%
State and local taxes (net of federal benefits)	3.5		3.6		3.4
Tax credits, including foreign tax credit	(1.0)		(0.9)		(0.8)
Change in uncertain tax positions reserve	0.2		0.2		(0.1)
Other permanent differences	(0.6)		0.2		0.1
Other, net	(0.6)		(0.7)		1.0
Effective income tax rate	22.5	%	23.4	%	24.6	%

Temporary differences which give rise to deferred income tax assets and (liabilities) on December 28, 2024 and December 30, 2023 are as follows (in thousands):


	2024		2023
Employee benefits	$	49,666	$	45,661
Lease liability		31,100		27,918
Net operating loss carryforwards		6,550		7,881
Foreign subsidiary capital loss carryforward		428		935
Other tax credits		—		31
Inventory		3,047		2,397
Reserves on receivables		2,025		2,203
Accrued expenses		3,762		3,373
Capitalized research and development costs		35,548		28,021
Gross deferred income tax assets		132,126		118,420
Valuation allowance		(3,428)		(6,014)
Deferred income tax assets		128,698		112,406
Depreciation		(84,924)		(82,617)
Intangibles		(39,525)		(43,455)
Right of use assets		(29,894)		(26,870)
Other, net		(336)		(484)
Deferred income tax liabilities		(154,679)		(153,426)
Net deferred income tax liability	$	(25,981)	$	(41,020)

As of December 28, 2024, we had federal, state and foreign net operating loss (NOL) carryforwards of $6.5 million, which will expire at various dates.

The NOL carryforwards expire as follows:


	Net Operating Losses
	U.S.		State		Foreign
2025 - 2029	$	—	$	15	$	—
2030 - 2034		—		123		3,894
2035 - 2039		—		1,109		—
2040 - 2044		—		895		—
Thereafter		—		—		513
Total	$	—	$	2,142	$	4,407

As of December 28, 2024, we believe that it is more likely than not that the benefit from certain state and foreign NOL carryforwards will not be realized. In recognition of this risk, we have provided a valuation allowance of $2.9 million against the various NOLs. Furthermore, there is a valuation allowance of $0.5 million against a capital loss carryforward we have for a wholly-owned subsidiary, UFP Canada, Inc. Based upon the business activity and the nature of the assets of this subsidiary, our ability to realize a future benefit from this carryforward is doubtful. The capital loss has an unlimited carryforward and therefore will not expire unless there is a change in control of the subsidiary.

The Organization of Economic Cooperation and Development (“OECD”) reached an agreement among various countries to implement a minimum 15% tax rate on certain multinational enterprises, commonly referred to as Pillar Two. Many countries continue to announce changes in their tax laws, many of them effective for tax years beginning January 1, 2024. We continue to analyze the impacts of these legislative changes to our effective tax rate, consolidated financial statements, and related disclosures. As of December 28, 2024, we do not expect the impact of Pillar Two legislation to have a material impact on our tax expense.