INCOME TAXES

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

Income before income taxes was taxed in the following jurisdictions in each of the years ended December 31:

	2024		2023		2022
	(Dollars in thousands)
Domestic	$	193,938	$	253,916	$	400,889
Foreign	153,732		168,205		73,250
Total	$	347,670	$	422,121	$	474,139

The components of the provision (benefit) for income taxes were as follows:

 

	2024		2023		2022
	(Dollars in thousands)
Current:
Federal	$	39,590	$	10,847	$	99,760
State	7,927		(529)		23,915
Foreign	57,515		52,730		41,797
Current income tax provision	105,032		63,048		165,472
Deferred:
Federal	(15,847)		29,337		(27,681)
State	(2,218)		7,957		(8,916)
Foreign	(14,990)		(4,186)		4,416
Deferred income tax (benefit) provision	(33,055)		33,108		(32,181)
	$	71,977	$	96,156	$	133,291

The provision for income taxes varied from income taxes computed at the statutory U.S. federal income tax rate as a result of the following:

	2024			2023			2022
	(Dollars in thousands)
Income taxes computed at the statutory     U.S. federal income tax rate	$	73,011		$	88,646		$	99,569
State income taxes, net of federal tax benefit	2,551			5,551			12,815
Tax liabilities no longer required	(2,838)			(4,071)			(2,142)
Valuation allowance	11,291			2,287			16,635
Tax credit refunds, net	(5,098)			(2,684)			(5,081)
Foreign earnings taxed at other than 21%	(4,144)			9,993			5,126
Deferred tax rate changes	1,326			(3,133)			(1,276)
European Commission settlement	—			—			5,313
Other	(4,122)			(433)			2,332
	$	71,977		$	96,156		$	133,291
Effective tax rate	20.7		%	22.8		%	28.1		%

Deferred income taxes reflect the net tax effect of temporary differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Significant components of our deferred tax assets and liabilities at December 31 were as follows:

	2024		2023
	(Dollars in thousands)
Deferred tax assets:
Pension and other postretirement liabilities	$	15,621	$	17,093
Rationalization and other accrued liabilities	49,115		33,196
AMT and other credit carryforwards	6,102		3,584
Net operating loss carryforwards	80,853		54,067
Other intangible assets	2,288		268
Foreign currency translation	—		—
Property, plant and equipment	1,703		1,559
Inventory and related reserves	2,852		3,098
Long term operating lease liabilities	51,449		58,430
Other	41,331		29,233
Total deferred tax assets	251,314		200,528
Deferred tax liabilities:
Property, plant and equipment	(283,505)		(259,083)
Pension and other postretirement liabilities	(45,835)		(44,782)
Other intangible assets	(223,672)		(178,062)
Rationalization and other accrued liabilities	(1,537)		—
Operating lease right of use assets	(48,788)		(55,993)
Inventory and related reserves	(11,723)		(13,527)
Foreign currency translation	(24,830)		(13,496)
Other	(14,609)		(11,210)
Total deferred tax liabilities	(654,499)		(576,153)
Valuation allowance	(91,340)		(45,525)
	$	(494,525)	$	(421,150)

At December 31, 2024, the net deferred tax liability in our Consolidated Balance Sheets was comprised of long-term deferred tax assets of $11.1 million and long-term deferred tax liabilities of $505.6 million. At December 31, 2023, the net deferred tax liability in our Consolidated Balance Sheets was comprised of long-term deferred tax assets of $12.5 million and long-term deferred tax liabilities of $433.7 million. Long-term deferred tax assets were classified as other assets, net in our Consolidated Balance Sheets.

The valuation allowance in 2024 includes deferred tax assets of $91.3 million resulting from state and foreign net operating loss carryforwards, or NOLs. The valuation allowance for deferred tax assets increased in 2024 by $45.8 million primarily due to acquired tax attributes related to Weener Packaging and an increase in the valuation allowance related to foreign NOLs.

At December 31, 2024, we had foreign NOLs of approximately $71.9 million that are available to offset future taxable income. Of that amount, approximately $11.8 million will expire from 2025 to 2037. The remaining portion has no expiration date. At December 31, 2024, we had state tax NOLs of approximately $12.3 million that are available to offset future taxable income and that will expire from 2025 to 2043.

We recognize accrued interest and penalties related to unrecognized taxes as additional income tax expense. At December 31, 2024 and 2023, we had $1.0 million and $1.8 million, respectively, accrued for potential interest and penalties.

The total amount of unrecognized tax benefits recorded in other liabilities as of December 31, 2024 and 2023 were $8.6 million and $13.5 million, respectively, excluding associated tax assets and including the federal tax benefit of state taxes, interest and penalties.

Tax assets associated with uncertain tax positions primarily represent our estimate of the potential tax benefits in one tax jurisdiction that could result from the payment of income taxes in another jurisdiction. At each of December 31, 2024 and 2023, we had approximately $7.2 million in assets associated with uncertain tax positions recorded in other assets, net in our Consolidated Balance Sheets.

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits included as other liabilities in our Consolidated Balance Sheets was as follows:

	2024		2023
	(Dollars in thousands)
Balance at January 1,	$	17,401	$	26,721
Increase based upon tax positions of current year	(4,245)		8,807
Increase based upon tax positions of a prior year	698		625
Decrease based upon settlements with taxing authorities	—		(15,681)
Decrease based upon a lapse in the statute of limitations	(993)		(3,071)
Balance at December 31,	$	12,861	$	17,401

The total amount of unrecognized tax benefits that would impact the effective tax rate, if recognized, at December 31, 2024 and 2023 were $12.9 million and $16.7 million, respectively.

Silgan and its subsidiaries file U.S. Federal income tax returns, as well as income tax returns in various states and foreign jurisdictions. We expect the Internal Revenue Service, or IRS, will complete its review of the 2023 tax year with no change to our filed tax return. We have been accepted into the Compliance Assurance Program for the 2024 tax year which provides for the review by the IRS of tax matters relating to our tax return prior to filing. We are subject to examination by state and local tax authorities generally for the period mandated by statute, with the exception of states where waivers of the statute of limitations have been executed. The earliest open period for a state audit is 2018. Our foreign subsidiaries are generally not subject to examination by tax authorities for periods before 2012, and we have contractual indemnities with third parties with respect to open periods that predate our ownership of certain foreign subsidiaries. Subsequent periods may be examined by the relevant tax authorities. In the next twelve months, it is reasonably possible that our reserve for unrecognized tax benefits will decrease by approximately $0.4 million primarily related to tax attributes acquired from and expenses related to certain acquisitions, as we anticipate the expiration of the applicable statute of limitations with respect to certain tax matters.

For certain of our foreign subsidiaries where we expect to be indefinitely reinvested, we estimate that the unremitted earnings as of December 31, 2024 are approximately $100.7 million. The amount of unrecognized deferred tax liabilities on these indefinitely reinvested earnings is estimated to be approximately $5.8 million.