JBT MAREL CorpJBTM
JBT MAREL Corp Income Taxes Disclosure
INCOME TAXES
Domestic and foreign components of income from continuing operations before income taxes and non-controlling interests for the years ended on December 31, are shown below:
| (In millions) | 2024 | 2023 | 2022 | ||||||||||||||
| Domestic | $ | (40.8) | $ | 65.8 | $ | 46.6 | |||||||||||
| Foreign | 136.1 | 87.3 | 73.4 | ||||||||||||||
| Income before income taxes | $ | 95.3 | $ | 153.1 | $ | 120.0 | |||||||||||
The provision for income taxes related to income from continuing operations for the years ended on December 31, consisted of:
| (In millions) | 2024 | 2023 | 2022 | ||||||||||||||
| Current: | |||||||||||||||||
| Federal | $ | 1.2 | $ | 17.7 | $ | 16.1 | |||||||||||
| State | 2.0 | 5.2 | 5.0 | ||||||||||||||
| Foreign | 33.3 | 22.2 | 14.2 | ||||||||||||||
| Total current | $ | 36.5 | $ | 45.1 | $ | 35.3 | |||||||||||
| Deferred: | |||||||||||||||||
| Federal | $ | (21.0) | $ | (18.9) | $ | (14.0) | |||||||||||
| State | (4.2) | (2.9) | (2.9) | ||||||||||||||
| Foreign | (0.6) | 0.2 | (2.2) | ||||||||||||||
| Total deferred | $ | (25.8) | $ | (21.6) | $ | (19.1) | |||||||||||
| Provision for income taxes | $ | 10.7 | $ | 23.5 | $ | 16.2 | |||||||||||
Significant components of deferred tax assets and liabilities at December 31, were as follows:
| (In millions) | 2024 | 2023 | |||||||||
| Deferred tax assets attributable to: | |||||||||||
| Accrued pension and other postretirement benefits | $ | 5.5 | $ | 5.9 | |||||||
| Accrued expenses and accounts receivable allowances | 8.2 | 12.4 | |||||||||
| Loss carryforwards | 6.1 | 8.7 | |||||||||
| Inventories | 7.8 | 8.4 | |||||||||
| Stock-based compensation | 5.6 | 5.8 | |||||||||
| Operating lease liabilities | 7.5 | 10.2 | |||||||||
| Convertible bond | 4.9 | 8.5 | |||||||||
| Research and development costs | 51.5 | 42.2 | |||||||||
| Credit carryforwards | 6.0 | 3.2 | |||||||||
| Acquisition Costs | 5.4 | — | |||||||||
| Other | 5.2 | 4.7 | |||||||||
| Total deferred tax assets | $ | 113.7 | $ | 110.0 | |||||||
| Valuation allowance | (5.3) | (6.0) | |||||||||
| Deferred tax assets, net of valuation allowance | $ | 108.4 | $ | 104.0 | |||||||
| Deferred tax liabilities attributable to: | |||||||||||
| Investment in subsidiary | $ | 0.9 | $ | 9.4 | |||||||
| Property, plant and equipment | 16.7 | 21.3 | |||||||||
| Goodwill and intangibles | 61.5 | 60.1 | |||||||||
| Right to use lease assets | 7.2 | 10.1 | |||||||||
| Net investment hedges | 0.7 | 3.2 | |||||||||
| Other | 1.0 | — | |||||||||
| Total deferred tax liabilities | $ | 88.0 | $ | 104.1 | |||||||
| Net deferred tax liabilities | $ | 20.4 | $ | (0.1) | |||||||
Included in deferred tax assets are tax benefits related to net operating and capital loss carryforwards attributable to foreign and domestic operations. The net tax effect of state and foreign loss carryforwards at year-end 2024 totaled $6.1 million. Of this amount, $3.4 million are available to offset future taxable income in several jurisdictions indefinitely, and $2.7 million are available to offset future taxable income through 2044. Of the tax effected losses, approximately $3.4 million in Belgium, Australia, the United States and the Netherlands are subject to a full valuation allowance, as management has concluded that, based on the available evidence, it is more likely than not that the deferred tax assets will not be fully utilized.
Included in deferred tax assets at December 31, 2024 are $6.0 million of research and development and foreign tax credit carryforwards, of which $2.4 million are U.S. state credits that will expire beginning in 2032, if unused.
The effective income tax rate was different from the statutory U.S. federal income tax rate due to the following:
| 2024 | 2023 | 2022 | |||||||||||||||
| Statutory U.S. federal tax rate | 21% | 21% | 21% | ||||||||||||||
| Net difference resulting from: | |||||||||||||||||
| Research and development tax incentives | (8) | (5) | (7) | ||||||||||||||
| Foreign earnings subject to different tax rates | 5 | 2 | 3 | ||||||||||||||
| State income taxes | (1) | 2 | 2 | ||||||||||||||
| Foreign tax credits | (14) | (5) | (6) | ||||||||||||||
| US foreign inclusions | 14 | 6 | 7 | ||||||||||||||
| Stock based compensation - excess tax benefit | 1 | — | (2) | ||||||||||||||
| Remeasurement of deferred tax liability | (9) | — | — | ||||||||||||||
| Valuation allowance | (1) | 3 | 1 | ||||||||||||||
| Disposition of subsidiary | — | (7) | — | ||||||||||||||
| Executive Compensation | 2 | — | — | ||||||||||||||
| Other | 1 | (2) | (5) | ||||||||||||||
| Total difference | (10)% | (6)% | (7)% | ||||||||||||||
| Effective income tax rate | 11% | 15% | 14% | ||||||||||||||
The Company considers certain unremitted earnings of foreign subsidiaries indefinitely reinvested. The amount of unrecognized deferred tax liabilities associated with these earnings is approximately $1.1 million.
As of December 31, 2024, the Company has accumulated undistributed earnings generated by its foreign subsidiaries, which were predominantly taxed in the U.S. The Company does not assert that these previously taxed earnings are indefinitely reinvested in operations outside the U.S. Accordingly, the Company has recorded an estimated deferred tax liability of $0.9 million for taxes related to the Company's foreign earnings that are not permanently reinvested.
As of December 31, 2024, the Company did not have any unrecognized tax benefits that, if recognized, would impact the Company’s effective tax rate. In 2024, the Company settled an outstanding audit and reflected the previously unrecognized tax benefit in the current year effective tax rate.
The Organization for Economic Co-operation and Development (OECD) established a framework to implement a global minimum corporate tax of 15% for companies with global revenues and profits above certain thresholds (referred to as Pillar Two), with certain aspects of Pillar Two effective January 1, 2024 and other aspects effective January 1, 2025, depending on the jurisdictions in which the Company operates. While it is uncertain whether the U.S. will enact legislation to adopt Pillar Two, certain countries in which the Company operates have enacted legislation, and other countries are in the process of introducing legislation, to implement Pillar Two. Pillar Two did not have a material impact on the Company's effective tax rate, consolidated results of operations, financial position, or cash flows for the period ending December 31, 2024.
The Company files income tax returns in the U.S. and foreign jurisdictions. The Company is generally subject to examination by the IRS for years 2021 and later. In addition to the U.S., the Company has tax years that remain open and subject to examination by tax authorities in the following major taxing jurisdictions: Sweden for years after 2022, Brazil for years after 2019, Netherlands for years after 2019, Belgium for years after 2022 and UK for years after 2022.
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About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.