Income taxes

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

Income taxes

(20)Income taxes

Our liabilities for income taxes are as follows (in millions).

	December 31,
	2024		2023
Currently payable	$	1,806	$	185
Deferred		83,563		92,344
Other		501		480
	$	85,870	$	93,009

Our deferred income tax assets and liabilities summarized by type of temporary difference are as follows (in millions).

	December 31,
	2024		2023
Deferred income tax liabilities:
Investments, including unrealized appreciation	$	47,158	$	56,766
Deferred charges retroactive reinsurance		1,847		1,994
Property, plant and equipment and equipment held for lease		33,590		32,991
Goodwill and other intangible assets		7,498		7,546
Other		5,043		4,452
		95,136		103,749
Deferred income tax assets:
Unpaid losses and loss adjustment expenses	$	1,226	$	1,255
Unearned premiums		1,284		1,285
Accrued liabilities		2,713		2,626
Regulatory liabilities		1,364		1,248
Deferred revenue		2,539		2,282
Other		2,447		2,709
		11,573		11,405
Net deferred income tax liability	$	83,563	$	92,344

We have not established deferred income taxes on accumulated undistributed earnings of certain foreign subsidiaries, which are expected to be reinvested indefinitely. Repatriation of all accumulated earnings of foreign subsidiaries would be impracticable to the extent that such earnings represent capital to support ongoing business operations. Generally, no U.S. federal income taxes will be imposed on future distributions of foreign earnings under current law. However, distributions to the U.S. or other foreign jurisdictions could be subject to withholding and other local taxes.

Income tax expense (benefit) for each of the three years ending December 31, 2024 is summarized as follows (in millions).

	2024			2023		2022
U.S. federal	$	18,481		$	20,764	$	(10,316	)
U.S. state		767			763		762
Foreign		1,567			1,492		1,052
	$	20,815		$	23,019	$	(8,502	)
Current	$	30,464		$	7,642	$	4,815
Deferred		(9,649	)		15,377		(13,317	)
	$	20,815		$	23,019	$	(8,502	)

Notes to Consolidated Financial Statements

(20)Income taxes

Income tax expense (benefit) is reconciled to hypothetical amounts computed at the U.S. federal statutory rate for each of the three years ending December 31, 2024 in the table below (dollars in millions).

	2024			2023			2022
Earnings (loss) before income taxes	$	110,376		$	120,166		$	(30,500	)
Hypothetical income tax expense (benefit) at the U.S. federal statutory rate	$	23,179		$	25,235		$	(6,405	)
Dividends received deduction		(491	)		(678	)		(512	)
State income taxes, less U.S. federal income tax effect		606			603			602
U.S. income tax credits*		(2,575	)		(2,186	)		(2,187	)
Other differences, net		96			45			—
	$	20,815		$	23,019		$	(8,502	)
Effective income tax rate		18.9	%		19.2	%		27.9	%

* U.S. income tax credits derive primarily from production tax credits associated with wind-energy generation of BHE and tax credits arising from affordable housing investments.

We file income tax returns in the U.S. and in state, local and foreign jurisdictions. We have settled income tax liabilities with the U.S. federal taxing authority (“IRS”) for tax years through 2013, and the IRS is currently auditing tax years 2014 through 2019. We are also under audit or subject to audit with respect to income taxes in various state and foreign jurisdictions. It is reasonably possible that certain of these income tax examinations will be settled in 2025. We currently do not believe that the outcome of unresolved issues or claims will be material to our Consolidated Financial Statements.

At December 31, 2024 and 2023, net unrecognized tax benefits were $501 million and $480 million, respectively. Included in the balance at December 31, 2024, were $448 million of tax positions that, if recognized, would impact the effective tax rate. We do not expect material increases to the estimated amount of unrecognized tax benefits during 2025.

The Organization for Economic Co-operation and Development has issued Pillar Two model rules introducing a new global minimum tax of 15% intended to be effective on January 1, 2024. While the U.S. has not yet adopted Pillar Two rules, various other governments around the world are enacting legislation to adopt the rules. As currently designed, Pillar Two would apply to our worldwide operations. We do not currently have material operations in jurisdictions with tax rates lower than the Pillar Two minimum tax rate, and we do not currently expect these rules will materially increase our global tax costs. There remains uncertainty as to the final Pillar Two model rules.