Page 136 - Martin Marietta - 2023 Proxy Statement

NOTES TO FINANCIAL STATEMENTS (Continued)

Note J: Income Taxes
he components of the Company’s income tax expense from continuing operations are as follows:
years ended December 31
(in millions) 2022 2021 2020
Federal income taxes:
Current $ 174.9 $ 66.3 $ 91.9
Deferred 18.0 61.4 45.4
Total federal income taxes 192.9 127.7 137.3
State income taxes:
Current 35.1 18.7 21.0
Deferred 5.3 6.5 8.7
Total state income taxes 40.4 25.2 29.7
Foreign income taxes:
Current 1.2 — 1.2
Deferred 0.3 0.3 —
Total foreign income taxes 1.5 0.3 1.2
Income tax expense $ 234.8 $ 153.2 $ 168.2

For the years ended December 31, 2022, 2021 and 2020, there was a foreign pretax loss of $2.3 million, and earnings of $7.5 million
and $8.9 million, respectively.
The Company’s effective income tax rate on continuing operations varied from the statutory United States income tax rate because
of the following tax differences:

years ended December 31 2022 2021 2020
Statutory income tax rate 21.0% 21.0% 21.0%
(Reduction) increase resulting from:
Effect of statutory depletion (2.4) (3.5) (2.8)
State income taxes, net of federal tax benefit 2.9 2.3 2.6
Federal tax credits (0.9) (1.4) (1.3)
Other items 0.9 (0.5) (0.6)
Effective income tax rate 21.5% 17.9% 18.9%

The higher 2022 effective tax rate versus 2021 and 2020 was primarily driven by the impact of the divestiture of the Colorado and
Central Texas ready mixed concrete businesses.
The statutory depletion deduction for all years is calculated as a percentage of sales, subject to certain limitations. Due to these
limitations, the impact of changes in the sales volumes and earnings may not proportionately affect the Company’s statutory
depletion deduction and the corresponding impact on the effective income tax rate.
In 2022, 2021 and 2020, the Companyfinanced third‐party railroad track maintenance. In exchange, the Company received federal
income tax credits and tax deductions.

Page 32 ♦ Annual Report