JELD-WEN Holding, Inc.JELD
JELD-WEN Holding, Inc. Income Taxes Disclosure
Income Taxes
(Loss) income before taxes is comprised of the following:
| Year Ended December 31, | |||||||||||||||||
| (amounts in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Domestic (loss) income | $ | (321,503) | $ | (133,002) | $ | 11,217 | |||||||||||
| Foreign (loss) income | (152,816) | (37,816) | 77,357 | ||||||||||||||
| Total (loss) income before taxes | $ | (474,319) | $ | (170,818) | $ | 88,574 | |||||||||||
Our foreign (loss) income is historically driven by our subsidiaries in Austria, Canada, Germany, Denmark, and the United Kingdom.
Significant components of the provision for income taxes are as follows:
| Year Ended December 31, | |||||||||||||||||
| (amounts in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Federal | $ | 185 | $ | 231 | $ | (2,464) | |||||||||||
| State | 402 | 732 | 1,753 | ||||||||||||||
| Foreign | 10,411 | 32,783 | 40,452 | ||||||||||||||
| Current taxes | 10,998 | 33,746 | 39,741 | ||||||||||||||
| Federal | 91,385 | (16,227) | 4,220 | ||||||||||||||
| State | 44,738 | 668 | 7,757 | ||||||||||||||
| Foreign | 809 | (1,425) | 11,621 | ||||||||||||||
| Deferred taxes | 136,932 | (16,984) | 23,598 | ||||||||||||||
| Federal | 91,570 | (15,996) | 1,756 | ||||||||||||||
| State | 45,140 | 1,400 | 9,510 | ||||||||||||||
| Foreign | 11,220 | 31,358 | 52,073 | ||||||||||||||
| Total provision for income taxes | $ | 147,930 | $ | 16,762 | $ | 63,339 | |||||||||||
Reconciliation of the U.S. federal statutory income tax rate to our effective tax rate is as follows:
| Year Ended December 31, 2025 | |||||||||||
| (amounts in thousands) | Amount | % | |||||||||
| U.S. federal statutory tax rate | $ | (99,607) | 21.0% | ||||||||
State and local income taxes, net of federal income tax effect(1) | 35,707 | (7.5)% | |||||||||
| Foreign tax effects | |||||||||||
| Austria | |||||||||||
| Goodwill impairment | 8,078 | (1.7)% | |||||||||
| Other, net | (842) | 0.2% | |||||||||
| Denmark | |||||||||||
| Goodwill impairment | 10,749 | (2.3)% | |||||||||
| Other, net | (180) | —% | |||||||||
| Germany | |||||||||||
| Other, net | 8,517 | (1.8)% | |||||||||
| Sweden | |||||||||||
| Goodwill impairment | 5,791 | (1.2)% | |||||||||
| Other, net | 348 | (0.1)% | |||||||||
| United Kingdom | |||||||||||
| Changes in valuation allowance | 12,936 | (2.8)% | |||||||||
| Other, net | (754) | 0.2% | |||||||||
| Other foreign jurisdictions | (971) | 0.2% | |||||||||
| Effect of cross-border tax laws | |||||||||||
| Change in indefinite reversal assertion | 5,883 | (1.2)% | |||||||||
| Other effects of cross-border tax laws | (891) | 0.2% | |||||||||
| Changes in valuation allowances | 130,402 | (27.5)% | |||||||||
| Nontaxable or nondeductible items | |||||||||||
| Goodwill impairment | 21,308 | (4.5)% | |||||||||
| Impact of divestiture - goodwill | 7,065 | (1.5)% | |||||||||
| Other, net | 4,461 | (0.9)% | |||||||||
| Changes in unrecognized tax benefits | 996 | (0.2)% | |||||||||
| Other adjustments | (1,066) | 0.2% | |||||||||
| Effective Tax Rate | $ | 147,930 | (31.2)% | ||||||||
(1)State taxes in California, Florida, New York and Illinois made up the majority (greater than 50%) of the tax effect in this category.
| 2024 | 2023 | ||||||||||||||||||||||
| (amounts in thousands) | Amount | % | Amount | % | |||||||||||||||||||
| Statutory rate | $ | (35,860) | 21.0% | $ | 18,601 | 21.0% | |||||||||||||||||
| State income tax, net of federal benefit | (3,093) | 1.8% | 1,959 | 2.2% | |||||||||||||||||||
| Foreign source dividends and deemed inclusions | 945 | (0.6)% | 1,906 | 2.2% | |||||||||||||||||||
| Valuation allowance | 24,595 | (14.4)% | 32,666 | 36.9% | |||||||||||||||||||
| Nondeductible expenses | 5,883 | (3.4)% | 2,661 | 3.0% | |||||||||||||||||||
| Goodwill impairment | 20,163 | (11.8)% | — | —% | |||||||||||||||||||
| Equity based compensation | 1,245 | (0.7)% | 4,086 | 4.6% | |||||||||||||||||||
| Foreign tax rate differential | (3,770) | 2.2% | (488) | (0.6)% | |||||||||||||||||||
| Tax rate differences and credits | 1,078 | (0.6)% | 3,675 | 4.1% | |||||||||||||||||||
| Uncertain tax positions | (889) | 0.5% | (174) | (0.2)% | |||||||||||||||||||
Tax effect on sale of business(1) | 4,099 | (2.4)% | — | —% | |||||||||||||||||||
| Prior year provision to return adjustments | 1,451 | (0.8)% | (571) | (0.6)% | |||||||||||||||||||
| Other | 915 | (0.3)% | (982) | (1.1)% | |||||||||||||||||||
| Effective tax rate | $ | 16,762 | (9.8)% | $ | 63,339 | 71.5% | |||||||||||||||||
(1)Tax effect on sale of business during the year ended December 31, 2024, primarily relates to the sale of our business in St. Kitts.
During the year ended December 31, 2025, we recognized tax expense of $174.8 million from the increase to valuation allowances on foreign and U.S. Tax Attributes, $55.4 million of tax expense attributable to nondeductible goodwill impairment, and $5.9 million of tax expense attributed to withholding tax accrued on certain foreign undistributed earnings from prior years.
Prior to the adoption of ASU 2023-09, we disaggregated components of state tax expense related to changes in valuation allowance, tax credits, and prior-period true-ups and disaggregated foreign tax credits from other cross-border tax effects. The total impact on our effective tax rate for the increase in state valuation allowance was $35.4 million for the year ended December 31, 2025.
During the year ended December 31, 2024, we recognized tax expense of $24.6 million from the increase to valuation allowances on foreign and state NOL and credit carryforwards, $20.2 million impact attributable to nondeductible goodwill impairment, $7.1 million of tax expense attributed to nondeductible expenses, and $4.5 million of tax expense attributed to the expiration of U.S. attributes, partially offset by $2.7 million of tax benefit attributable to R&D credits.
During the year ended December 31, 2023, we recognized tax expense of $32.7 million from the increase to valuation allowances on foreign and state NOL and credit carryforwards, $6.7 million of tax expense attributed to nondeductible expenses, and $7.2 million of tax expense attributed to the expiration of federal and state tax credit carryforwards, partially offset by $3.8 million of tax benefit attributable to R&D credits.
Deferred income taxes are provided for the temporary differences between the financial reporting basis and tax basis of our assets, liabilities, and operating loss carryforwards. Significant deferred tax assets and liabilities are as follows:
| (amounts in thousands) | December 31, 2025 | December 31, 2024 | |||||||||
| Net operating loss and tax credit carryforwards | $ | 244,784 | $ | 189,202 | |||||||
| Operating lease liabilities | 49,642 | 36,127 | |||||||||
| Employee benefits and compensation | 17,915 | 20,096 | |||||||||
| Accrued liabilities and other | 25,163 | 26,146 | |||||||||
| Inventory | 7,068 | 5,418 | |||||||||
| Allowance for credit losses | 3,168 | 3,092 | |||||||||
| Investments and marketable securities | 463 | 283 | |||||||||
| Capitalized research and development expenses | 1,869 | 39,329 | |||||||||
| Gross deferred tax assets | 350,072 | 319,693 | |||||||||
| Valuation allowance | (254,624) | (78,136) | |||||||||
| Deferred tax assets | 95,448 | 241,557 | |||||||||
| Depreciation and amortization | (39,298) | (68,188) | |||||||||
| Operating lease assets | (46,325) | (33,437) | |||||||||
| Investment in subsidiaries | (8,230) | (2,347) | |||||||||
| Deferred tax liabilities | (93,853) | (103,972) | |||||||||
| Net deferred tax assets | $ | 1,595 | $ | 137,585 | |||||||
| Balance sheet presentation: | |||||||||||
| Non-current assets | $ | 16,289 | $ | 143,284 | |||||||
| Non-current liabilities | (14,694) | (5,699) | |||||||||
| Net deferred tax assets | $ | 1,595 | $ | 137,585 | |||||||
At December 31, 2025 and 2024 the Company had NOLs in various federal, state, and foreign jurisdictions of approximately $1.36 billion and $1.15 billion, respectively, which begin to expire in 2026. $452.4 million of such NOL carryforwards do not expire. In addition, the Company had tax credit carryforwards of $40.8 million and $44.3 million at December 31, 2025 and 2024, respectively, which begin to expire in 2026.
Valuation Allowance – The realization of deferred tax assets is based on historical tax positions and estimates of future taxable income. We evaluate both the positive and negative evidence that we believe is relevant in assessing whether we will realize the deferred tax assets. We consider historical taxable income, the scheduled reversal of deferred tax liabilities (including the effect in available carryback and carryforward periods), projected taxable income, and tax-planning strategies in making this assessment. A valuation allowance is recorded when it is more likely than not that some portion of the deferred tax assets will not be realized. To fully utilize the NOLs and tax credit carryforwards, we will need to generate sufficient future taxable income in each respective jurisdiction before the expiration of the deferred tax assets governed by the applicable tax code.
Based on the level of historical taxable income and projections for future taxable income over the periods for which the deferred tax assets are deductible, during the third quarter of 2025 management determined it was more likely than not that the U.S. federal and state deferred tax assets would not be realized and have recognized a full valuation allowance in the period. This valuation allowance will be evaluated periodically and could be reversed partially or totally if business results have sufficiently improved to support realization of deferred tax assets in the future.
Any future reversals of the valuation allowance related to deferred tax assets existing as of December 31, 2025, will be recognized in income tax expense in the consolidated statement of operations.
We had a valuation allowance of $254.6 million and $78.1 million as of December 31, 2025 and 2024, respectively. The increase was primarily driven by increases of $122.4 million, $18.3 million, and $35.3 million against our domestic deferred tax assets, foreign and state net operating loss carryforwards, respectively.
We had a valuation allowance of $78.1 million and $54.8 million as of December 31, 2024 and 2023, respectively. The increase was primarily driven by increases of $19.2 million and $5.3 million against our foreign and state net operating loss carryforwards, respectively.
The following is the activity in our valuation allowance:
| Year Ended December 31, | |||||||||||||||||
| (amounts in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Valuation allowance – beginning of year | $ | (78,136) | $ | (54,786) | $ | (21,048) | |||||||||||
| Valuation allowances established | (122,731) | (7) | 11 | ||||||||||||||
| Changes to existing valuation allowances | (49,158) | (24,462) | (32,830) | ||||||||||||||
| Release of valuation allowances | — | 15 | 1 | ||||||||||||||
| Currency translation | (4,599) | 1,104 | (920) | ||||||||||||||
| Valuation allowance – end of year | $ | (254,624) | $ | (78,136) | $ | (54,786) | |||||||||||
Income taxes paid are as follows:
| Year Ended December 31, | |||||
| (amounts in thousands) | 2025 | ||||
| Federal | $ | 164 | |||
| State | 328 | ||||
| Foreign | 19,362 | ||||
| Total | $ | 19,854 | |||
Income taxes paid (net of refunds) exceeded five percent of total income taxes paid (net of refunds) in the following jurisdictions:
| Year Ended December 31, | |||||
| (amounts in thousands) | 2025 | ||||
| Foreign | |||||
| Germany | $ | 2,688 | |||
| Oettingen | 1,301 | ||||
| Denmark | 3,413 | ||||
| Mexico | 2,561 | ||||
| Canada | 2,252 | ||||
| Austria | 2,403 | ||||
| Sweden | 1,612 | ||||
We made tax payments (net of refunds) of $19.9 million, $46.0 million, and $48.1 million during the years ended December 31, 2025, 2024, and 2023, respectively, primarily for foreign liabilities. Total receivables for tax refunds are recorded in other current assets in the accompanying consolidated balance sheets and totaled $21.1 million and $15.3 million at December 31, 2025 and 2024, respectively. Foreign payables for taxes are recorded in accrued income taxes payable in the accompanying consolidated balance sheets and totaled $1.6 million and $7.4 million at December 31, 2025 and 2024, respectively. We have $20.2 million and $18.9 million of non-current taxes receivable as of December 31, 2025 and 2024, respectively. We do not have any non-current taxes payable as of December 31, 2025 and 2024.
Earnings of Foreign Subsidiaries – The Company continually evaluates its global cash needs. As of December 31, 2025, and 2024 we have $8.2 million and $2.3 million of deferred tax liability related to earnings of foreign subsidiaries remaining on our balance sheet, respectively. The primary driver of this increase is the 5% withholding tax levied on JELD-WEN of Canada, Ltd. undistributed earnings of $104.1 million. The Company continued to make an indefinite reinvestment assertion on other aspects of the outside basis difference in foreign subsidiaries that would attract a tax cost in excess of the Company’s cost of capital.
The Company repatriated $7.1 million and $71.3 million from certain foreign jurisdictions for the years ended December 31, 2025 and 2024, respectively. The Company is asserting that its future earnings, in excess of previously taxed earnings, are permanently reinvested as of December 31, 2025. The Company continues to make an indefinite reinvestment assertion on other aspects of the outside basis differences in foreign subsidiaries that would attract a significant cost of capital. No additional deferred tax expense is recorded on prospective earnings. We hold a combined book-over-tax outside basis difference of $49.0 million and $187.5 million as of December 31, 2025 and 2024, respectively, in our investment in foreign subsidiaries on a continuing operations basis and may incur up to $9.7 million of local country income and withholding taxes in case of distribution of unremitted earnings.
Dual-Rate Jurisdiction – Estonia and Latvia tax the corporate profits of resident corporations at different rates depending upon whether the profits are distributed. The undistributed profits of resident corporations are exempt from taxation while any distributed profits are subject to a 20%-22% corporate income tax rate. The liability for the tax on distributed profits is recorded as an income tax expense in the period in which a dividend is declared. The balance of retained earnings of our Estonian subsidiary which, if distributed, would be subject to this tax was $88.6 million and $87.3 million as of December 31, 2025 and 2024, respectively. The balance of retained earnings of our Latvian subsidiary which, if distributed, would be subject to this tax was $34.2 million and $32.6 million as of December 31, 2025 and 2024, respectively.
Accounting for UTPs – A reconciliation of the beginning and ending amounts of unrecognized tax benefits excluding interest and penalties is as follows:
| Year Ended December 31, | |||||||||||||||||
| (amounts in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Unrecognized tax benefit – beginning of year | $ | 43,783 | $ | 38,900 | $ | 29,300 | |||||||||||
| Increase for tax positions taken during the prior period | — | 8,899 | 14,320 | ||||||||||||||
| Decrease for tax positions taken during the prior period | (517) | (742) | — | ||||||||||||||
| Decrease for settlements with taxing authorities | — | (2,267) | (7,347) | ||||||||||||||
| Increase for tax positions taken during the current period | — | 973 | 1,472 | ||||||||||||||
| Decrease due to statute expiration | — | (307) | (159) | ||||||||||||||
| Currency translation | 4,246 | (1,673) | 1,314 | ||||||||||||||
| Unrecognized tax benefit – end of year | $ | 47,512 | $ | 43,783 | $ | 38,900 | |||||||||||
Unrecognized tax benefits were $47.5 million, $43.8 million, and $38.9 million at December 31, 2025, 2024, and 2023, respectively. The $3.7 million increase from 2024 to 2025 is primarily driven by an increase of $4.2 million related to foreign currency translation, partially offset by a $0.5 million decrease associated with management's assessment of a potential liabilities related to prior years' U.S. R&D tax credits. The unrecognized tax benefit recorded in the current year is partially offset by a corresponding increase in deferred tax assets expected to be recovered should these liabilities ultimately be assessed. Interest and penalties related to UTPs are reported as a component of income tax expense and included in the total UTP balance within deferred credits and other liabilities in the accompanying consolidated balance sheets. Amounts accrued for interest and penalties were $5.2 million, $3.7 million, and $6.7 million at December 31, 2025, 2024, and 2023, respectively.
There were benefits of $7.7 million, $6.6 million, and $12.3 million included in the balance of unrecognized tax benefits as of December 31, 2025, 2024, and 2023, respectively, that would affect the effective tax rate if recognized. Such benefits, if recognized, would be subject to a realizability assessment to the extent they increase our tax attributes. We cannot reasonably estimate the conclusion of certain non-U.S. income tax examinations and its outcome at this time.
We operate in numerous U.S., state, and foreign tax jurisdictions and are generally open to examination for tax years 2012 and forward. As of December 31, 2025, the Company has subsidiaries in various state and foreign jurisdictions under audit for tax years 2011 through 2023.
Tax Law Changes – On July 4, 2025, President Trump signed into law the OBBBA. The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including accelerated tax deductions for qualified property and research expenditures, modification of the business interest expense limitation, and changes to the international tax framework. Pursuant to ASC 740, Income Taxes, the effects of changes in tax law are recognized in the period of enactment, and the legislation did not have a material impact on our consolidated financial statements or our business.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 23, 2026 | Showing above |
| 2024 | Feb 20, 2025 | |
| 2023 | Feb 20, 2024 | |
| 2022 | Feb 21, 2023 | |
| 2021 | Feb 22, 2022 | |
| 2020 | Feb 23, 2021 | |
| 2019 | Feb 24, 2020 | |
| 2018 | Mar 1, 2019 | |
| 2017 | Mar 6, 2018 | |
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.