Income Taxes

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The components of income before income tax were as follows:

	For the Years Ended December 31,
	2024		2023		2022
	(in millions)
Income before income taxes:
United States	$	438	$	380	$	332
International	13		13		6
Total income before income taxes	$	451	$	393	$	338

Significant components of income tax expense were as follows:

	For the Years Ended December 31,
	2024		2023		2022
	(in millions)
Current
United States
Federal	$	93	$	83	$	64
State	13		16		14
Foreign	4		3		1
Total current income tax expense	110		102		79
Deferred
United States
Federal	(1)		(4)		3
State	(10)		(3)		(3)
Foreign	—		—		1
Total deferred income tax (benefit) expense	(11)		(7)		1
Total income tax expense	$	99	$	95	$	80

A reconciliation of income taxes computed at the U.S. Federal statutory income tax rate of 21% for 2024, 2023 and 2022, to our income tax expense was as follows:

	For the Years Ended December 31,
	2024		2023		2022
	(in millions)
U.S. Federal income tax expense at the statutory rate	$	95	$	82	$	71
U.S. State income tax expense	12		10		9
Change in tax rates(1)	(9)		—		—
Non-deductible expenses	2		3		1
Return to provision adjustments	(1)		—		(1)
Total income tax expense	$	99	$	95	$	80

(1)    Primarily due to a discrete tax benefit for the remeasurement of deferred tax liabilities due to a change in our state tax rates after apportionment.

Deferred Tax Assets and Liabilities

Deferred income taxes result from temporary differences between the amount of assets and liabilities recognized for financial reporting and tax purposes. The components of our net deferred income tax liability were as follows:

	As of December 31,
	2024		2023
	(in millions)
Deferred tax assets
Employee benefits	$	25	$	20
Lease obligations	24		18
Inventory	8		6
Reserves	5		5
Tax losses	4		5
Total deferred tax assets	66		54
Valuation allowance	(7)		(5)
Total deferred tax assets after valuation allowance	59		49
Deferred tax liabilities
Intangible assets	(260)		(279)
Property, plant and equipment	(101)		(101)
Lease right-of-use assets	(23)		(17)
Prepaid expense	(12)		—
Financial instruments	(4)		(7)
Other	(1)		(2)
Total deferred tax liabilities	(401)		(406)
Net deferred tax liabilities	$	(342)	$	(357)

Uncertain Tax Positions

ASC 740 prescribes a recognition threshold of more-likely-than not to be sustained upon examination as it relates to the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. Our policy is to include interest and penalties related to gross unrecognized tax benefits in income tax expense.

The following table summarizes the activity related to our gross unrecognized tax benefits:

	For the Years Ended December 31,
	2024		2023		2022
	(in millions)
Balance as of beginning of the year	$	11	$	8	$	5
Increase associated with tax positions taken during the current year	1		2		2
(Decrease) increase associated with tax positions taken in prior years	(1)		1		1
Ending unrecognized tax benefits	$	11	$	11	$	8

Each year we file income tax returns in the various federal, state, local and foreign income taxing jurisdictions in which we operate. Canada is the only foreign jurisdiction in which we operate. Our income tax returns are subject to examination and possible challenge by the tax authorities. Although ultimate timing is uncertain, the net amount of tax liability for unrecognized tax benefits may change within the next twelve months due to changes in audit status, settlements of tax assessments and other events.