INCOME TAXES

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 19: INCOME TAXES

This note provides details about income taxes applicable to our operations, including the following:

	earnings before income taxes,
	provision for income taxes,
	effective income tax rate,
	deferred tax assets and liabilities and
	unrecognized tax benefits.

The “Income Taxes” section of Note 1: Summary of Significant Accounting Policies provides details about how we account for our income taxes.

EARNINGS BEFORE INCOME TAXES

Domestic and Foreign Earnings Before Income Taxes

DOLLAR AMOUNTS IN MILLIONS
	2023		2022		2021
Domestic earnings	$	737	$	1,982	$	2,499
Foreign earnings		200		323		817
Total earnings before income taxes	$	937	$	2,305	$	3,316

PROVISION FOR INCOME TAXES

DOLLAR AMOUNTS IN MILLIONS
	2023			2022			2021
Current:
Federal	$	37		$	252		$	378
State		8			45			74
Foreign		57			158			243
Total current		102			455			695
Deferred:
Federal		1			28			27
State		(3	)		6			(2	)
Foreign		(2	)		(64	)		(11	)
Total deferred		(4	)		(30	)		14
Total income tax provision	$	98		$	425		$	709

EFFECTIVE INCOME TAX RATE

DOLLAR AMOUNTS IN MILLIONS
	2023			2022			2021
U.S. federal statutory income tax	$	197		$	484		$	696
State income taxes, net of federal tax benefit		3			41			57
REIT income not subject to federal income tax		(114	)		(125	)		(102	)
Foreign taxes		14			27			62
Other, net		(2	)		(2	)		(4	)
Total income tax provision	$	98		$	425		$	709
Effective income tax rate		10.5	%		18.4	%		21.4	%

DEFERRED TAX ASSETS AND LIABILITIES

Deferred tax assets and liabilities reflect the future tax effect created by differences between the timing of when income or deductions are recognized for pretax financial book reporting purposes versus income tax purposes. Deferred tax assets represent a future tax benefit (or reduction to income taxes in a future period), while deferred tax liabilities represent a future tax obligation (or increase to income taxes in a future period).

Balance Sheet Classification of Deferred Income Tax Assets (Liabilities)

DOLLAR AMOUNTS IN MILLIONS
	DECEMBER 31,  2023			DECEMBER 31,  2022
Net noncurrent deferred tax asset	$	15		$	8
Net noncurrent deferred tax liability		(81	)		(96	)
Net deferred tax liability	$	(66	)	$	(88	)

Items Included in Our Deferred Income Tax Assets (Liabilities)

DOLLAR AMOUNTS IN MILLIONS
	DECEMBER 31,  2023			DECEMBER 31,  2022
Deferred tax assets:
Pension and post-employment benefits	$	102		$	75
State tax credits		43			42
Depletion		13			14
Environmental reserves		16			13
Incentive compensation		12			17
Intercompany land sales		18			16
Workers compensation		13			14
Minerals		10			11
Other		77			67
Gross deferred tax assets		304			269
Valuation allowance		(57	)		(54	)
Net deferred tax assets		247			215
Deferred tax liabilities:
Property, plant and equipment		(294	)		(284	)
Other		(19	)		(19	)
Net deferred tax liabilities		(313	)		(303	)
Net deferred tax liability	$	(66	)	$	(88	)

Net Operating Loss and Credit Carryforwards

Our gross federal, state and foreign net operating loss carryforwards as of December 31, 2023 totaled $716 million as follows:

	Federal — U.S. REIT — $333 million, $163 million of the total will begin to expire in 2035;
	State — $383 million, $150 million of the total will begin to expire in 2028 and
	Foreign — none currently recorded.

Our gross state credit carryforwards as of December 31, 2023 totaled $54 million, which includes $5 million that expire from 2026 through 2036. Our U.S. TRSs have $8 million in foreign tax credit carryforwards that expire from 2027 through 2031.

Valuation Allowances

With the exception of the valuation allowance discussed below, we believe it is more likely than not that we will have sufficient future taxable income to realize our deferred tax assets.

Our valuation allowance on our deferred tax assets was $57 million as of December 31, 2023, which related to state credits, state net operating losses and foreign tax credits.

UNRECOGNIZED TAX BENEFITS

Unrecognized tax benefits represent potential future obligations to taxing authorities if uncertain tax positions we have taken on previously filed tax returns are not sustained. In accordance with our accounting policy, we accrue interest and penalties related to unrecognized tax benefits as a component of income tax expense (see Note 1: Summary of Significant Accounting Policies). The total gross amount of unrecognized tax benefits as of December 31, 2023 and 2022, as well as the activity during those years, were immaterial.

As of December 31, 2023, none of our U.S. federal income tax returns or foreign jurisdiction income tax returns are under examination. Our U.S. federal income tax returns are open to examination for years 2020 forward and foreign jurisdiction income tax returns are open to examination for years 2016 forward. We are undergoing examinations in state jurisdictions for tax years 2018 through 2021, with tax years 2009 forward open to examination. We do not expect that the outcome of any examination will have a material effect on our consolidated financial statements; however, audit outcomes and the timing of audit settlements are subject to significant uncertainty.