INCOME TAXES |
6 Months Ended |
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Jun. 30, 2025 | |
| Income Tax Disclosure [Abstract] | |
| INCOME TAXES | INCOME TAXES Our estimated annual effective tax rate (EAETR) is based on full-year expectations of pretax earnings, statutory tax rates and permanent differences between book and tax accounting such as percentage depletion. For interim financial reporting, we calculate our quarterly income tax provision in accordance with the EAETR. Each quarter, we update our EAETR based on our revised full-year expectation of pretax earnings and calculate the income tax provision so that the year-to-date income tax provision reflects the EAETR. Significant judgment is required in determining our EAETR. Certain taxes may be computed outside of the EAETR and recognized when the event occurs, such as payments of share-based awards and significant, unusual, or infrequently occurring events. In the second quarter of 2025, we recorded income tax expense from continuing operations of $91.3 million compared to $94.4 million in the second quarter of 2024. The decrease in tax expense was primarily due to the release of a valuation allowance against deferred tax assets of a Canadian subsidiary resulting from a restructuring completed in the second quarter of 2025, partially offset by an increase in pretax earnings. For the first six months of 2025, we recorded income tax expense from continuing operations of $125.0 million compared to $123.4 million for the first six months of 2024. The increase in tax expense was primarily due to an increase in pretax earnings, partially offset by an increase in the statutory depletion deduction and the release of a valuation allowance against deferred tax assets of a Canadian subsidiary. As discussed in Note 8, in May 2022, Mexican government officials unexpectedly and arbitrarily shut down our Calica operations in Mexico. In 2024, Calica had deferred tax assets (including net operating losses) of $27.5 million against which we have a full valuation allowance recorded. In 2025, we project an $8.2 million increase in deferred tax assets against which we have recorded a valuation allowance. A majority of the deferred tax assets relate to a net operating loss (NOL) carryforward which would expire between 2032 and 2035 if not utilized. Should the Mexican government lift the shutdown and/or if we are successful in our North American Free Trade Agreement (NAFTA) claim, we will reevaluate the need for a valuation allowance against the deferred tax assets. We project Alabama NOL carryforward deferred tax assets at December 31, 2025 of $57.6 million against which we have a valuation allowance of $42.7 million. We expect $7.4 million of the Alabama NOL carryforward to expire in 2025 resulting in a tax benefit of $0.7 million (recorded as a component of the EAETR) over the previous amount of valuation allowance recorded. Almost all of the Alabama NOL carryforward would expire between 2025 and 2029 if not utilized. Subsequent to quarter end, in July 2025, President Trump signed into law H.R.1 - One Big Beautiful Bill Act ("OBBBA"). The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing and an increased business interest expense limitation, as well as certain modifications to the international tax framework. Changes in tax rates and laws on deferred tax balances are recognized in the period in which the legislation is enacted. Consequently, we are in the process of evaluating all deferred tax balances under the newly enacted tax law and other changes required to our financial statements as a result of the OBBBA. We anticipate an increase to our deferred tax liability and a reduction to income taxes payable, primarily related to the provisions for 100% bonus depreciation and full expensing of domestic research expenditures. We do not expect any material change to our effective tax rate as a result of the OBBBA. A summary of our deferred tax assets and liabilities is included in Note 9 “Income Taxes” in our Annual Report on Form 10-K for the year ended December 31, 2024.
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