MINERALS TECHNOLOGIES INCMTX
MINERALS TECHNOLOGIES INC Income Taxes Disclosure
Note 8. Income Taxes
Income (loss) from operations before provision for taxes by domestic and foreign source is as follows:
| Year Ended December 31, | ||||||||||||
| (in millions of dollars) | 2025 | 2024 | 2023 | |||||||||
| Income (loss) from operations before income taxes and income from affiliates | ||||||||||||
| and joint ventures: | ||||||||||||
| Domestic | $ | (172.4 | ) | $ | 40.7 | $ | (38.9 | ) | ||||
| Foreign | 158.4 | 182.9 | 146.6 | |||||||||
| $ | (14.0 | ) | $ | 223.6 | $ | 107.7 | ||||||
Upon adoption of ASU 2023-09, "Improvements to Income Tax Disclosures" (see Note 1), the provision (benefit) for taxes on income consists of the following:
| Year Ended | ||||
| December 31, | ||||
| (in millions of dollars) | 2025 | |||
| Current Tax Expense (Benefit) | ||||
| U.S. Federal | $ | 5.8 | ||
| U.S. State and local | 3.6 | |||
| Foreign | 41.3 | |||
| Total current tax expense (benefit) | 50.7 | |||
| Deferred Tax Expense (Benefit) | ||||
| U.S. Federal | (32.9 | ) | ||
| U.S. State and local | (8.7 | ) | ||
| Foreign | (4.2 | ) | ||
| Total deferred tax expense (benefit) | (45.8 | ) | ||
| Total Income Tax Expense (Benefit) | ||||
| U.S. Federal | (27.1 | ) | ||
| U.S. State and local | (5.1 | ) | ||
| Foreign | 37.1 | |||
| Total income tax expense (benefit) | $ | 4.9 |
The provision (benefit) for taxes on income prior to adoption of ASU 2023-09 consists of the following:
| (in millions of dollars) | Year Ended December 31, | |||||||
| Domestic | 2024 | 2023 | ||||||
| Taxes currently payable | ||||||||
| Federal | $ | 20.0 | $ | 9.5 | ||||
| State and local | 2.8 | 6.7 | ||||||
| Deferred income taxes | (12.3 | ) | (31.5 | ) | ||||
| Domestic tax provision (benefit) | 10.5 | (15.3 | ) | |||||
| Foreign | ||||||||
| Taxes currently payable | 44.2 | 42.2 | ||||||
| Deferred income taxes | 4.7 | (3.2 | ) | |||||
| Foreign tax provision | 48.9 | 39.0 | ||||||
| Total tax provision | $ | 59.4 | $ | 23.7 | ||||
The provision (benefit) for taxes on income shown in the previous table is classified based on the location of the taxing authority, regardless of the location in which the taxable income is generated.
Upon adoption of ASU 2023-09, "Improvements to Income Tax Disclosures" (see Note 1), the reconciliation of taxes at the U.S. federal statutory tax rate to our provision for taxes for the year ended December 31, 2025, is as follows:
| Year Ended December 31, | ||||||||||
| 2025 | ||||||||||
| Amount (in millions) | Effective Tax Rate % | |||||||||
| Net income (loss) before tax and equity in earnings | $ | (14.0 | ) | |||||||
| U.S. federal statutory tax rate | (2.9 | ) | 21.0 | % | ||||||
| State and local income taxes, net of federal income tax effect | (3.0 | ) | 21.8 | % | ||||||
| Foreign tax effects | ||||||||||
| Brazil | ||||||||||
| Effects of rates different than statutory | 2.2 | (16.1 | )% | |||||||
| Other adjustments | (0.1 | ) | 0.6 | % | ||||||
| China | 2.7 | (19.5 | )% | |||||||
| Other foreign jurisdictions | 0.8 | (5.9 | )% | |||||||
| Effect of cross-border tax laws | ||||||||||
| Global Intangible Low-Tax Income (GILTI) | 3.6 | (25.4 | )% | |||||||
| Foreign Derived Intangible Income (FDII) | (0.8 | ) | 5.5 | % | ||||||
| Other adjustments | 0.3 | (2.5 | )% | |||||||
| Tax credits | (0.1 | ) | 0.7 | % | ||||||
| Nontaxable or nondeductible items | ||||||||||
| Debtor-In-Possession Credit Agreement | 10.5 | (75.2 | )% | |||||||
| Depletion | (8.4 | ) | 60.1 | % | ||||||
| Section 162(m) | 1.5 | (10.7 | )% | |||||||
| Previously taxed income - Foreign exchange loss | (3.0 | ) | 21.3 | % | ||||||
| Other permanent differences | 1.6 | (11.1 | )% | |||||||
| Changes in unrecognized tax benefits | (0.1 | ) | 1.0 | % | ||||||
| Other adjustments | 0.1 | (0.6 | )% | |||||||
| Consolidated effective tax rate | $ | 4.9 | (35.0 | )% | ||||||
The majority of the state and local taxes are comprised of the following states: MN, CA, NY, SC, IL, IN, TN, and PA.
The major elements contributing to the difference between the U.S. federal statutory tax rate and the consolidated effective tax rate for the years ended December 31, 2024 and 2023 in accordance with the guidance prior to adoption of ASU 2023-09 are as follows:
| Year Ended December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| U.S. statutory rate | 21.0 | % | 21.0 | % | |||||||
| Depletion | (4.4 | )% | (10.3 | )% | |||||||
| Difference between tax provided on foreign earnings and the U.S. statutory rate | 4.7 | % | 7.7 | % | |||||||
| GILTI | 0.1 | % | 1.0 | % | |||||||
| FDII | (1.0 | )% | (2.5 | )% | |||||||
| State and local taxes, net of federal tax benefit | 1.4 | % | (0.1 | )% | |||||||
| Tax credits | (0.7 | )% | (0.6 | )% | |||||||
| Bankruptcy Funding | 3.1 | % | 0.0 | % | |||||||
| Impact of uncertain tax positions | (0.3 | )% | 0.2 | % | |||||||
| Impact of officer's non-deductible compensation | 1.1 | % | 1.9 | % | |||||||
| Foreign Withholding tax | 0.8 | % | 2.0 | % | |||||||
| Other | 0.8 | % | 1.7 | % | |||||||
| Consolidated effective tax rate | 26.6 | % | 22.0 | % | |||||||
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below:
| December 31, | ||||||||
| (in millions of dollars) | 2025 | 2024 | ||||||
| Deferred tax assets attributable to: | ||||||||
| Accrued liabilities | $ | 62.3 | $ | 31.4 | ||||
| Net operating loss carry forwards | 17.6 | 23.2 | ||||||
| Pension and postretirement benefits costs | - | 2.9 | ||||||
| Interest | 17.0 | 16.2 | ||||||
| Research and development capitalization | 12.6 | 11.0 | ||||||
| Valuation allowance | (15.1 | ) | (20.6 | ) | ||||
| Other | 10.8 | 13.3 | ||||||
| Total deferred tax assets | 105.2 | 77.4 | ||||||
| Deferred tax liabilities attributable to: | ||||||||
| Plant and equipment, principally due to differences in depreciation | 124.8 | 138.0 | ||||||
| Intangible assets | 45.9 | 49.5 | ||||||
| Pension and postretirement benefits costs | 1.6 | - | ||||||
| Other | 8.4 | 5.6 | ||||||
| Total deferred tax liabilities | 180.7 | 193.1 | ||||||
| Net deferred tax liability | $ | (75.5 | ) | $ | (115.7 | ) | ||
Net deferred tax assets and net deferred tax liabilities are classified as follows:
| December 31, | ||||||||
| (in millions of dollars) | 2025 | 2024 | ||||||
| Net deferred tax asset, long-term | $ | 15.2 | $ | 14.8 | ||||
| Net deferred tax liability, long-term | 90.7 | 130.5 | ||||||
| Net deferred tax liability, long-term | $ | (75.5 | ) | $ | (115.7 | ) | ||
The Company has $17.6 million of deferred tax assets arising from tax loss carry forwards which will be realized through future operations. Carry forwards of approximately $12.2 million expire over the next 20 years, and $5.4 million can be utilized over an indefinite period.
On December 31, 2025, the Company had $1.8 million of total unrecognized tax benefits. Included in this amount were a total of $1.2 million of unrecognized income tax benefits that, if recognized, would affect the Company’s effective tax rate.
The following table summarizes the activity related to our unrecognized tax benefits:
| December 31, | ||||||||
| (in millions of dollars) | 2025 | 2024 | ||||||
| Balance at beginning of the year | $ | 1.9 | $ | 2.8 | ||||
| Increases related to current year positions | 0.5 | 0.5 | ||||||
| Decreases related to audit settlements and statute expirations | (0.6 | ) | (1.4 | ) | ||||
| Balance at the end of the year | $ | 1.8 | $ | 1.9 | ||||
The Company’s accounting policy is to recognize interest and penalties accrued, relating to unrecognized income tax benefits as part of its provision for income taxes. The Company had a total accrued balance of $0.4 million for interest and penalties for the year ended December 31, 2025. The Company believes that its accrued liabilities are sufficient to cover its U.S. and foreign tax contingencies.
The Company operates in multiple taxing jurisdictions, both within and outside the U.S. In certain situations, a taxing authority may challenge positions that the Company has adopted in its income tax filings. The Company, with a few exceptions (none of which are material), is no longer subject to U.S. federal, state, local, and international income tax examinations by tax authorities for years prior to 2017.
Upon adoption of ASU 2023-09, Improvements to Income Tax Disclosures (see Note 1), cash paid for income taxes, net of refunds during the year ended December 31, 2025, were as follows:
| December 31, | ||||
| (in millions of dollars) | 2025 | |||
| U.S. - Federal | $ | 18.0 | ||
| U.S. - State | 3.2 | |||
| Foreign | ||||
| Brazil | 6.7 | |||
| Canada | 3.9 | |||
| China | 12.3 | |||
| Turkey | 8.6 | |||
| All other countries | 16.1 | |||
| Total income taxes paid, net | $ | 68.8 | ||
The Company had approximately $516.3 million of foreign subsidiaries’ undistributed earnings as of December 31, 2025. We intend to continue to permanently reinvest these earnings overseas for the foreseeable future and while U.S. federal tax expense has been recognized as a result of recent U.S. tax code changes, no deferred tax liabilities with respect to foreign withholding taxes or state taxes have been recognized.
On July 4, 2025, the One Big Beautiful Bill Act was signed into law in the U.S. It contains a broad range of tax reform provisions affecting businesses. The Company evaluated the full effects of the legislation on our annual effective tax rate and cash tax position, and it did not have a material impact on its Consolidated Financial Statements.
In December 2021, the Organization for Economic Co-operation and Development (“OECD”) released the Pillar Two Model Rules which aim to reform international corporate taxation rules, including the implementation of a global minimum tax rate. The Company began implementation of the Pillar Two Model Rules in the first quarter of 2024. The Company continues to assess the effect of the Pillar Two Model Rules in all jurisdictions and does not expect that Pillar Two will have a material impact on its Consolidated Financial Statements.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 20, 2026 | Showing above |
| 2024 | Feb 21, 2025 | |
| 2023 | Feb 16, 2024 | |
| 2022 | Feb 17, 2023 | |
| 2021 | Feb 18, 2022 | |
| 2020 | Feb 19, 2021 | |
| 2019 | Feb 14, 2020 | |
| 2018 | Feb 15, 2019 | |
| 2017 | Feb 16, 2018 | |
| 2016 | Feb 17, 2017 | |
| 2015 | Feb 19, 2016 | |
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.