NEWMARKET CORPNEU
NEWMARKET CORP Income Taxes Disclosure
Our income before income tax expense, as well as our provision for income taxes, is shown in the table below.
| Years Ended December 31, | ||||||||||||||||||||
| (in thousands) | 2025 | 2024 | 2023 | |||||||||||||||||
Income before income tax expense | ||||||||||||||||||||
| Domestic | $ | 325,117 | $ | 351,237 | $ | 301,152 | ||||||||||||||
| Foreign | 235,445 | 232,870 | 187,810 | |||||||||||||||||
| $ | 560,562 | $ | 584,107 | $ | 488,962 | |||||||||||||||
| Income tax expense | ||||||||||||||||||||
| Current income taxes | ||||||||||||||||||||
| Federal | $ | 38,860 | $ | 62,547 | $ | 61,693 | ||||||||||||||
| State | 13,351 | 18,280 | 16,616 | |||||||||||||||||
| Foreign | 55,221 | 53,666 | 36,539 | |||||||||||||||||
| 107,432 | 134,493 | 114,848 | ||||||||||||||||||
| Deferred income taxes | ||||||||||||||||||||
| Federal | 26,058 | (10,161) | (16,384) | |||||||||||||||||
| State | 6,493 | (2,291) | (697) | |||||||||||||||||
| Foreign | 1,832 | (347) | 2,331 | |||||||||||||||||
| 34,383 | (12,799) | (14,750) | ||||||||||||||||||
Total income tax expense | $ | 141,815 | $ | 121,694 | $ | 100,098 | ||||||||||||||
The disaggregation of income taxes paid (net of refunds) (in thousands) is shown in the table below:
| Years Ended December 31, | ||||||||||||||||||||
| Jurisdiction | 2025 | 2024 | 2023 | |||||||||||||||||
| Federal | $ | 60,244 | $ | 59,448 | $ | 74,700 | ||||||||||||||
| Illinois | 6,600 | 7,063 | 9,663 | |||||||||||||||||
| Other state | 8,767 | 11,046 | 9,483 | |||||||||||||||||
| Total state | 15,367 | 18,109 | 19,146 | |||||||||||||||||
| Singapore | 17,417 | 6,241 | 6,211 | |||||||||||||||||
| United Kingdom | 25,749 | 16,816 | 10,692 | |||||||||||||||||
| Mexico | 4,542 | 4,758 | 7,158 | |||||||||||||||||
| Other foreign | 9,774 | 14,162 | 15,021 | |||||||||||||||||
| Total foreign | 57,482 | 41,977 | 39,082 | |||||||||||||||||
| Total cash taxes paid | $ | 133,093 | $ | 119,534 | $ | 132,928 | ||||||||||||||
The reconciliation of the U.S. federal statutory rate to the effective income tax rate follows.
| Years Ended December 31, | ||||||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||||||||
| (amount in thousands) | Amount | % | Amount | % | Amount | % | ||||||||||||||||||||||||||||||||
| Tax expense at U.S. federal statutory rate | $ | 117,718 | 21.0 | % | $ | 122,663 | 21.0 | % | $ | 102,682 | 21.0 | % | ||||||||||||||||||||||||||
State and local income taxes | 15,649 | 2.8 | 12,632 | 2.2 | 12,576 | 2.6 | ||||||||||||||||||||||||||||||||
Foreign Tax Effects | ||||||||||||||||||||||||||||||||||||||
| Singapore | ||||||||||||||||||||||||||||||||||||||
| Statutory tax rate difference between Singapore and United States | (2,973) | (0.5) | (3,071) | (0.5) | (8,341) | (1.7) | ||||||||||||||||||||||||||||||||
| Other | 3,298 | 0.6 | 3,805 | 0.6 | 4,803 | 1.0 | ||||||||||||||||||||||||||||||||
| Other countries | 7,466 | 1.3 | 4,187 | 0.7 | 2,992 | 0.6 | ||||||||||||||||||||||||||||||||
| Effect of cross border tax laws | ||||||||||||||||||||||||||||||||||||||
| Global intangible low-taxed income, net of foreign tax credits | 2,297 | 0.4 | 6,246 | 1.1 | 1,897 | 0.4 | ||||||||||||||||||||||||||||||||
| Foreign derived intangible income | (3,743) | (0.6) | (12,551) | (2.2) | (10,007) | (2.0) | ||||||||||||||||||||||||||||||||
| Other | 1,901 | 0.3 | (3,277) | (0.6) | (2,178) | (0.5) | ||||||||||||||||||||||||||||||||
| Tax credits | ||||||||||||||||||||||||||||||||||||||
| Research and development tax credits | (3,163) | (0.6) | (5,470) | (0.9) | (5,432) | (1.1) | ||||||||||||||||||||||||||||||||
| Nontaxable or nondeductible items | 4,456 | 0.8 | (1,896) | (0.3) | (877) | (0.2) | ||||||||||||||||||||||||||||||||
| Changes in unrecognized tax benefits | (1,091) | (0.2) | (1,574) | (0.3) | 1,983 | 0.4 | ||||||||||||||||||||||||||||||||
| Income tax expense | $ | 141,815 | 25.3 | % | $ | 121,694 | 20.8 | % | $ | 100,098 | 20.5 | % | ||||||||||||||||||||||||||
State and local income tax expense totaled $20 million for the year ended December 31, 2025 and $16 million for each of the years ended December 31, 2024 and December 31, 2023. The majority of this expense is attributable to operations in Illinois and New Jersey in 2025, Illinois and Pennsylvania in 2024, and Illinois in 2023. The increase in the effective state tax rate from 2024 to 2025 was primarily due to changes in apportionment factors.
Our deferred income tax assets and liabilities follow.
| December 31, | ||||||||||||||
| (in thousands) | 2025 | 2024 | ||||||||||||
| Deferred income tax assets | ||||||||||||||
| Capitalized research expenses | $ | 86,234 | $ | 104,162 | ||||||||||
| Lease liabilities | 15,868 | 14,277 | ||||||||||||
| Operating loss and other carryforwards | 30,730 | 30,804 | ||||||||||||
| Foreign currency translation adjustments | 2,312 | 6,450 | ||||||||||||
| Other | 15,070 | 12,495 | ||||||||||||
| Gross deferred income tax assets | 150,214 | 168,188 | ||||||||||||
| Valuation allowance | (25,071) | (22,661) | ||||||||||||
| Total deferred income tax assets | 125,143 | 145,527 | ||||||||||||
| Deferred income tax liabilities | ||||||||||||||
| Depreciation | 106,844 | 101,538 | ||||||||||||
| Future employee benefits | 124,490 | 102,174 | ||||||||||||
| Intangibles | 115,161 | 85,727 | ||||||||||||
| Lease assets | 15,819 | 14,737 | ||||||||||||
| Other | 4,010 | 2,196 | ||||||||||||
| Total deferred income tax liabilities | 366,324 | 306,372 | ||||||||||||
| Net deferred income tax (liabilities) assets | $ | (241,181) | $ | (160,845) | ||||||||||
Net deferred income tax (liabilities) assets in the table above are reflected in the Consolidated Balance Sheets on a net jurisdictional basis. Deferred income tax assets are included in deferred charges and other assets. See Note 12. Deferred income tax liabilities are included in other noncurrent liabilities. See Note 15.
Our deferred taxes are in a net liability position at December 31, 2025. Our deferred tax assets include $31 million of federal and foreign operating loss carryforwards, foreign capital loss carryforwards, and foreign and state tax credits. Certain operating loss carryforwards expire in 2027 through 2042, and certain tax credits expire in 2026 through 2035. Based on current forecasted operating plans and historical profitability, we believe that we will recover the full benefit of our deferred tax assets with the exception of certain of the aforementioned operating loss, capital loss, and tax credit carryforwards. Therefore, as of December 31, 2025, we have recorded a valuation allowance of $25 million. We released a valuation allowance for losses utilized of $0.1 million during 2025 and $0.5 million during 2024.
We do not expect to distribute earnings from our foreign subsidiaries in a manner that would result in significant U.S. tax, as these earnings have been previously taxed in the U.S. or meet the requirements for a dividend received deduction. We recorded a deferred tax liability for the tax impact of these future distributions of $5.7 million as of December 31, 2025 and $0.6 million as of December 31, 2024.
We have not provided a deferred tax liability on approximately $90 million of temporary differences related to investments in foreign subsidiaries that are essentially permanent in duration, as these earnings are considered to be indefinitely reinvested. If we were to repatriate these earnings, we could be subject to income taxes and withholding taxes in various countries. Determination of the amount of unrecognized deferred income tax liability is not practicable due to the complexity associated with the hypothetical calculation.
A reconciliation of the beginning and ending balances of the unrecognized tax benefits from uncertain positions follows.
| December 31, | ||||||||||||||||||||
| (in thousands) | 2025 | 2024 | 2023 | |||||||||||||||||
| Balance at beginning of year | $ | 7,034 | $ | 8,381 | $ | 7,879 | ||||||||||||||
| Increases for tax positions of prior years | 859 | 1,113 | 1,374 | |||||||||||||||||
| Decreases for tax positions of prior years | (1,173) | 0 | 0 | |||||||||||||||||
| Increases for tax positions of the current year | 399 | 1,488 | 1,543 | |||||||||||||||||
| Settlements | (721) | (8) | (1,078) | |||||||||||||||||
| Lapses of statutes | (719) | (3,940) | (1,337) | |||||||||||||||||
| Balance at end of year | $ | 5,679 | $ | 7,034 | $ | 8,381 | ||||||||||||||
At December 31, 2025, all of the amount of unrecognized tax benefits, if recognized, would affect our effective tax rate.
Our U.S. subsidiaries file a U.S. federal consolidated income tax return. We are currently under a U.S. federal examination for tax year 2022. The federal statute of limitations has expired on all years prior to 2022. We are also currently under examination by various foreign jurisdictions and remain subject to examination until the statute of limitations expires for the respective tax jurisdiction. We are not currently under income tax audit in any U.S. states. Foreign and U.S. state jurisdictions have statutes of limitations generally ranging from 3 years to 5 years. Years still open to examination by foreign tax authorities in major jurisdictions include: the U.K. (2022 and forward); Singapore (2021 and forward); Belgium (2023 and forward); and Mexico (2021 and forward).Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 12, 2026 | Showing above |
| 2024 | Feb 14, 2025 | |
| 2023 | Feb 15, 2024 | |
| 2022 | Feb 15, 2023 | |
| 2021 | Feb 15, 2022 | |
| 2020 | Feb 16, 2021 | |
| 2019 | Feb 18, 2020 | |
| 2018 | Feb 19, 2019 | |
| 2017 | Feb 15, 2018 | |
| 2016 | Feb 15, 2017 | |
| 2015 | Feb 12, 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.