Income Taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Income Tax Provision

    Income before income taxes includes the following components:

	Year Ended December 31
	2023		2022		2021
	(thousands)
Domestic	$	643,060	$	1,144,790	$	945,562
Foreign	1,989		1,591		3,289
Income before income taxes	$	645,049	$	1,146,381	$	948,851

    The income tax provision shown in the Consolidated Statements of Operations includes the following:

	Year Ended December 31
	2023		2022		2021
	(thousands)
Current income tax provision
Federal	$	133,323	$	177,023	$	201,725
State	28,250		52,046		48,332
Foreign	—		(12)		12
Total current	161,573		229,057		250,069
Deferred income tax provision (benefit)
Federal	(629)		54,852		(12,149)
State	(68)		3,921		(2,484)
Foreign	517		893		929
Total deferred	(180)		59,666		(13,704)
Income tax provision	$	161,393	$	288,723	$	236,365

    The effective tax rate varies from the U.S. Federal statutory income tax rate principally due to the following:

	Year Ended December 31
	2023			2022			2021
	(thousands, except percentages)
Income before income taxes	$	645,049		$	1,146,381		$	948,851
Statutory U.S. income tax rate	21.0		%	21.0		%	21.0		%
Statutory tax provision	$	135,460		$	240,740		$	199,259
State taxes	22,249			45,037			35,705
Unrecognized tax benefits	(154)			6			2
Tax credits	(226)			(570)			(620)
Foreign rate differential	111			370			236
Stock-based compensation	(1,113)			(1,529)			(563)
Nondeductible executive compensation	3,174			2,433			1,664
Meals and entertainment	1,239			911			336
Other	653			1,325			346
Total	$	161,393		$	288,723		$	236,365
Effective income tax rate	25.0		%	25.2		%	24.9		%

    During the years ended December 31, 2023, 2022, and 2021, cash paid for taxes, net of refunds received, was $133.0 million, $260.0 million, and $260.1 million, respectively.

    Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts for income tax purposes. The components of our net deferred tax assets and liabilities at December 31, 2023 and 2022, are summarized as follows:

	December 31, 2023		December 31, 2022
	(thousands)
Deferred tax assets
Employee benefits	$	35,445	$	31,688
Lease liabilities	24,576		22,739
Inventories	5,849		8,999
Foreign net operating loss carryforward	130		503
Other	10,276		10,320
Deferred tax assets	$	76,276	$	74,249
Deferred tax liabilities
Property and equipment	$	(108,832)	$	(100,781)
Right-of-use assets	(22,256)		(20,511)
Intangible assets and other	(19,523)		(7,491)
Other	(2,825)		(2,804)
Deferred tax liabilities	$	(153,436)	$	(131,587)
Total deferred tax assets (liabilities), net	$	(77,160)	$	(57,338)

    As of December 31, 2023, we have foreign net operating loss carryforwards of $5.4 million, which if unused, will expire in years 2033 through 2041. We have state income tax credits totaling $1.0 million as of December 31, 2023, which if unused, will expire in years 2031 through 2033. The foreign net operating loss and state credit carryforwards in the income tax

returns filed included unrecognized tax benefits. The deferred tax assets recognized for those net operating losses and state credit carryforwards are presented net of these unrecognized tax benefits.

Income Tax Uncertainties

    The following table summarizes the changes related to our gross unrecognized tax benefits excluding interest and penalties:

	2023		2022		2021
	(thousands)
Balance as of January 1	$	1,734	$	1,782	$	1,780
Increases related to prior years' tax positions	4		—		—
Increases related to current years' tax positions	—		13		28
Decreases related to prior years' tax positions	—		(14)		(19)
Lapse of statute of limitations	(179)		(47)		(7)
Balance as of December 31	$	1,559	$	1,734	$	1,782

    As of December 31, 2023, 2022, and 2021, we had $1.6 million, $1.7 million, and $1.8 million, respectively, of unrecognized tax benefits recorded on our Consolidated Balance Sheets, excluding interest and penalties. Of the total unrecognized tax benefits recorded, $1.5 million, $1.7 million, and $1.8 million (net of the federal benefit for state taxes), respectively, would impact the effective tax rate if recognized.

    We recognize interest and penalties related to uncertain tax positions as income tax expense in our Consolidated Statements of Operations. For the years ended December 31, 2023, 2022, and 2021, we recognized an insignificant amount of interest and penalties related to taxes. We recognize tax liabilities and adjust these liabilities when our judgment changes as a result of the evaluation of new information not previously available or as new uncertainties occur. We do not expect the unrecognized tax benefits to change significantly over the next twelve months.

    We file income tax returns in the U.S. and various state and foreign jurisdictions. Tax years 2020 to present remain open to examination in the U.S. and tax years 2019 to present remain open to examination in Canada and various states. We recorded net operating losses in Canada beginning in 2006 that are subject to examinations and adjustments up to four years following the year in which they are utilized.