Page 141 - Martin Marietta - 2025 Proxy Statement

NOTES TO FINANCIAL STATEMENTS (Continued)
Note I: Income Taxes

Thecomponentsof the Company’s incometax expense fromcontinuing operations areas follows:
years ended December 31
(in millions) 2024 2023 2022
Federal incometaxes:
Current $ 565 $ 264 $ 175
Deferred (41) (11) 18
Total federal income taxes 524 253 193
State incometaxes:
Current 80 43 35
Deferred (4) (3) 6
Totalstate income taxes 76 40 41
Totalcurrent foreign incometaxes — — 1
Income tax expense $ 600 $ 293 $ 235

The Company generated foreign pretax earnings of $13 million, earnings of $8 millionand alossof $2 million for the years ended
December 31,2024, 2023 and 2022, respectively. Deferred foreign income tax expense is not material.
The Company’seffective incometax rate on continuing operations varied from thestatutory United States income taxratedue to
the following tax differences:

years ended December 31 2024 2023 2022
Statutoryincometax rate 21.0% 21.0% 21.0%
eduction) increase resulting from:
Effect of statutory depletion (1.4) (2.3) (2.4)
State incometaxes,net of federaltax benefit 2.3 2.1 2.9
Goodwill write-offfor divestiture 1.8 — 0.5
Federaltax credits (0.5) (0.8) (0.9)
Equity investments in renewable energy tax credits,net (0.3) (0.2) —
Other items 0.2 (0.2) 0.4
Effective incometax rate 23.1% 19.6% 21.5%

Thehigher2024 effective incometax rate versus 2023 wasdrivenby the impact of theFebruary 2024 divestiture of theSouth
Texas cement business andcertain related ready mixedconcreteoperations, which includedthe write-off of certain nondeductible
goodwill. Thehigher2022 effectivetax rate versus 2023 wasprimarily driven by the impactof the divestitureof the Colorado and
Central Texas ready mixedconcretebusinesses.
The statutorydepletion deduction forall yearsiscalculatedasa percentage of revenues, subjecttocertain limitations. Dueto
these limitations,changes in thesales volumesand pretax earnings may not proportionatelyaffectthe Company’sstatutory
depletion deductionand thecorresponding impact on theeffective incometax rate.However,the impact of thedepletion
deduction on theestimated effectivetax rate is inverselyaffected by increasesordecreases in pretax earnings.
The Companyinvests in renewableenergyinvestmententities which qualify for tax credits andother tax benefitsand are
accounted forunderthe proportional amortization method.For theyearended December31, 2024, amortization of these
investmentsplus income recapture, which are included inthe line item Income taxexpense in theconsolidated statements of
earnings,were $148 millionand $16 million, respectively, and offset by $153 millionof tax creditsand $17 millionof other tax
benefits.For the yearended December 31, 2023, amortization plus income recaptureof similar investments were $26 millionand
$1 million, respectively,offset by $24 millionof tax creditsand $2 millionof other tax benefits. There wasno investment
amortization for theyearended December 31, 2022. As of December 31, 2024,the Company has committedtoadditional equity
contributions of $44 million for tax equityinvestments related to RETC projects.These amounts, whichare expected to be paid in
2025, are recorded in theline item Othercurrent liabilities on theconsolidatedbalance sheet.

024 Annual Report ♦ Page 33