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INCOME TAXES
 12 Months Ended
Dec. 28, 2024
Income Tax Disclosure [Abstract]  
INCOME TAXES
INCOME TAXES

Prior to the Spin-Off, our operations have historically been included in the consolidated U.S. federal, certain foreign tax returns, certain state and local tax returns filed by Kellanova. Refer to Note 1 "Description of the Company and Basis of Presentation" for additional information.
The components of income before income taxes and the provision for income taxes were as follows:
202420232022
(millions)(Restated)
Income before income taxes
United States$80 $131 $(59)
Foreign16 17 33 
96 148 (26)
Income taxes
Currently payable
Federal27 28 — 
State6 4 4 
Foreign1 8 10 
34 40 14 
Deferred
Federal(13)(1)(14)
State(10)— (1)
Foreign4 (3)— 
(19)(4)(15)
Total income taxes$15 $36 $(1)
The difference between the U.S. federal statutory tax rate and the Company’s effective income tax rate was:
202420232022
(Restated)
U.S. statutory income tax rate21.0 %21.0 %21.0 %
Foreign rates varying from U.S. statutory rate1.0 1.2 (9.5)
State income taxes, net of federal benefit (1)(5.4)2.7 (7.2)
Nondeductible Permanent Items3.5 1.1 (8.1)
Nondeductible spin costs— 1.3 — 
Inventory Donations (Sec. 170 (A))(1.0)(0.7)4.6 
Stock Options - Excess Benefit / Shortfall(0.5)0.2 3.1 
Credits(1.8)(1.8)5.2 
APB 23— — (1.8)
Other, net(0.4)(0.7)(1.6)
Effective income tax rate16.4 %24.3 %5.7 %
(1) During 2024 we recognized a $9.1 million reduction to certain deferred tax liabilities as result of changes to our legal and operational structure.
As presented in the preceding table, the Company’s 2024 consolidated effective tax rate was 16.4%, as compared to 24.3% in 2023 and 5.7% in 2022.

The effective tax rate for 2024, 2023 and 2022 was impacted by state and local income taxes and the differential of WK Kellogg Co’s foreign statutory tax rates from the U.S. federal statutory tax rate.

The Company had unremitted foreign earnings of approximately $29 million as of December 28, 2024 which it asserted to be permanently reinvested, primarily related to its Canadian subsidiary. The unrecognized deferred tax liability for these earnings is estimated to be immaterial. However, this estimate could change based on the manner in which the outside basis difference associated with these earnings reverses. Taxes will be provided on these earnings in the periods in which they are no longer considered reinvested.
Management monitors the Company’s ability to utilize certain future tax deductions, operating losses and tax credit carryforwards, prior to expiration. Changes resulting from management’s assessment will result in impacts to deferred tax assets and the corresponding impacts on the effective income tax rate.
The following table provides an analysis of the Company’s deferred tax assets and liabilities as of year-end 2024 and 2023:
Deferred tax
assets		Deferred tax
liabilities
(millions)2024202320242023
Advertising and promotion-related1 4 — — 
Wages and payroll taxes14 8 — — 
Inventory valuation7 7 — — 
Employee benefits— — 36 36 
Operating loss, credit and other carryforwards— — — — 
Hedging transactions— — 2 — 
Depreciation and asset disposals— — 52 64 
Operating lease right-of-use assets— — 28 4 
Operating lease liabilities27 4 — — 
Trademarks and other intangibles— — 21 24 
Research and development capitalization6 2 — — 
Stock awards5 5 — — 
Other4 5 — — 
64 35 139 128 
Less valuation allowance— — — — 
Total deferred taxes$64 $35 $139 $128 
Net deferred tax asset (liability)$(75)$(93)
Classified in balance sheet as:
Other assets$8 $13 
Other liabilities(83)(106)
Net deferred tax asset (liability)$(75)$(93)

Following is a reconciliation of the Company’s total gross unrecognized tax benefits as of the years-ended
December 28, 2024, December 30, 2023 and December 31, 2022.
(millions)202420232022
Balance at beginning of year$— $5 $5 
Tax positions related to current year:
Additions— — — 
Tax positions related to prior years:
Additions— — — 
Dispositions/Acquisitions— (5)— 
Settlements— — — 
Lapses in statutes of limitation— — — 
Balance at end of year$— $— $5 

During the year ended December 28, 2024, December 30, 2023 and December 31, 2022, the Company recognized an immaterial amount of tax-related interest on unrecognized tax benefits.
The Company filed U.S. federal, U.S. state and foreign income tax returns for the tax year ended December 30, 2023. These returns remain open and subject to examination by the tax authorities in each respective jurisdiction.