Ranpak Holdings Corp.PACK
Ranpak Holdings Corp. Income Taxes Disclosure
Income Taxes
The components of earnings and loss before income tax benefit were as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Domestic | $ | (41.5) | $ | (32.0) | $ | (24.7) | |||||||||||
| Foreign | (6.0) | 8.3 | (6.6) | ||||||||||||||
| Total | $ | (47.5) | $ | (23.7) | $ | (31.3) | |||||||||||
The components of our income tax benefit were as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Current tax expense | |||||||||||||||||
| Federal | $ | (0.9) | $ | 1.9 | $ | 1.1 | |||||||||||
| State | (0.2) | 0.6 | 0.6 | ||||||||||||||
| Foreign | (0.4) | 2.2 | — | ||||||||||||||
| Total current tax expense | (1.5) | 4.7 | 1.7 | ||||||||||||||
| Deferred tax expense (benefit) | |||||||||||||||||
| Federal | (5.4) | (8.1) | (5.9) | ||||||||||||||
| State | (1.8) | (2.0) | (0.1) | ||||||||||||||
| Foreign | (0.5) | 3.2 | 0.1 | ||||||||||||||
| Total deferred tax benefit | (7.7) | (6.9) | (5.9) | ||||||||||||||
| Total income tax benefit | $ | (9.2) | $ | (2.2) | $ | (4.2) | |||||||||||
The differences between income taxes expected at the U.S. federal statutory income tax rate and the reported income tax benefit are summarized as follows:
| Year Ended December 31, 2025 | |||||||||||
| Amount | Percent | ||||||||||
| U.S. federal income tax benefit at statutory rate | $ | (10.0) | 21.0 | % | |||||||
U.S. state income taxes(1) | (2.0) | 4.2 | % | ||||||||
| Foreign tax effects | |||||||||||
| Netherlands | |||||||||||
| Deferred tax adjustment - intangibles | (1.0) | 2.1 | % | ||||||||
| Royalty deduction adjustment | 1.2 | (2.5) | % | ||||||||
| Other | 0.2 | (0.4) | % | ||||||||
| Brazil | |||||||||||
| Change in valuation allowance | (0.6) | 1.3 | % | ||||||||
| Other foreign jurisdictions | 0.6 | (1.3) | % | ||||||||
| Tax credits | |||||||||||
| R&D tax credit | (0.3) | 0.6 | % | ||||||||
| Non-taxable or non-deductible items | |||||||||||
| Prior year swap adjustment | 2.4 | (5.0) | % | ||||||||
| Other | 0.3 | (0.6) | % | ||||||||
| Income tax benefit and effective tax rate | $ | (9.2) | 19.4 | % | |||||||
(1) State tax benefit - CA, TX, TN, NC, IL, IN, PA, NY, MN and NJ made up the majority (greater than 50 percent of the tax effect in this category) | |||||||||||
As previously disclosed for the years ended December 31, 2024 and 2023, prior to the adoption of ASU 2023-09, the effective income tax rate differs from the statutory federal income tax rate as follows:
| Year Ended December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| Income tax benefit at statutory rate | $ | (5.0) | $ | (6.6) | |||||||
| U.S. state income taxes | (1.1) | 0.3 | |||||||||
| Tax related to foreign activities | 3.1 | 0.6 | |||||||||
| U.S. federal tax credits | (0.2) | (0.3) | |||||||||
| Return to provision adjustments | — | (0.2) | |||||||||
| Global Intangible Low-Taxed Income (GILTI) | 0.3 | — | |||||||||
| Stock-based compensation windfall | 0.3 | 1.0 | |||||||||
| Non-deductible compensation | 0.2 | — | |||||||||
| Uncertain tax positions | (0.7) | — | |||||||||
| Valuation allowance | 0.7 | 0.9 | |||||||||
| Other, net | 0.2 | 0.1 | |||||||||
| Income tax benefit | $ | (2.2) | $ | (4.2) | |||||||
| Effective tax rate | 9.4 | % | 13.4 | % | |||||||
Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements, which will result in taxable or deductible amounts in the future.
Deferred tax assets (liabilities) consisted of the following:
| December 31, 2025 | December 31, 2024 | ||||||||||
| Deferred tax assets | |||||||||||
| Unrealized foreign currency exchange | $ | 0.5 | $ | 1.3 | |||||||
| Stock-based compensation | 1.5 | 1.5 | |||||||||
| Net operating losses and credits | 5.6 | 1.9 | |||||||||
| Derivative instruments | 6.2 | 2.8 | |||||||||
| Non-deductible interest carryforward | 22.0 | 18.6 | |||||||||
| Other | 4.5 | 2.4 | |||||||||
| Total deferred tax assets | 40.3 | 28.5 | |||||||||
| Valuation allowance | (1.4) | (1.7) | |||||||||
| Deferred tax assets, net of valuation allowance | 38.9 | 26.8 | |||||||||
| Deferred tax liabilities | |||||||||||
| Depreciation | (13.3) | (10.5) | |||||||||
| Amortization | (71.3) | (75.5) | |||||||||
| Unrealized foreign currency exchange | (3.4) | (1.6) | |||||||||
| Other | (1.6) | (1.2) | |||||||||
| Total deferred tax liabilities | (89.6) | (88.8) | |||||||||
| Deferred tax liabilities, net before unrecognized tax benefits | (50.7) | (62.0) | |||||||||
| Deferred tax impact of unrecognized tax benefits | — | — | |||||||||
| Deferred tax liabilities, net after unrecognized tax benefits | $ | (50.7) | $ | (62.0) | |||||||
In evaluating our ability to recover our deferred tax assets in the jurisdiction from which they arise, we consider all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax-planning strategies, and results of recent operations. In evaluating the objective evidence that historical results provide, we consider all available positive and negative evidence. Negative evidence includes, but is not limited to,
cumulative losses in recent years; a history of operating loss or tax credit carryforwards expiring unused; losses expected in early future years; unsettled circumstances; profit levels on a continuing basis in future years; and carryback or carryforward periods that would limit realization of tax benefits. Positive evidence includes, but is not limited to, future reversals of existing taxable temporary differences; future taxable income exclusive of reversing temporary differences and carryforwards; taxable income in prior year(s) if carryback is permitted under the tax law; and tax-planning strategies.
As of December 31, 2025 and 2024, we had $2.9 million and $0.3 million, respectively, in federal net operating loss carryforwards, $0.3 million that expired in 2025 and $2.9 million can be carried forward indefinitely; $1.0 million and $0.2 million, respectively, of tax benefits related to state net operating loss carryforwards, a portion of which expire in 2026 through 2045, with the remainder subject to an indefinite carryforward period; and $1.3 million and $5.6 million, respectively, of foreign net operating loss carryforwards, a portion of which expire in 2026 through 2030 with an indefinite carryforward period. Management does not believe it is more likely than not that a portion of the foreign net operating losses will be utilized. In recognition of this risk, we have provided a valuation allowance at December 31, 2025 and 2024 of $1.4 million and $1.7 million, respectively, which was recorded through income tax expense.
We consider the undistributed earnings of our foreign subsidiaries as of December 31, 2025 to be indefinitely reinvested and, accordingly, no U.S. income taxes have been provided thereon. As of December 31, 2025, the amount of undistributed earnings and profits associated with indefinitely reinvested foreign earnings was approximately $61.3 million. We do not anticipate the need to repatriate funds to the U.S. to satisfy domestic liquidity needs arising in the ordinary course of business.
We are subject to taxation in the United States (federal, state, local) and foreign jurisdictions. As of December 31, 2025, tax years 2019 through 2025 are subject to examination by the tax authorities.
The components of our unrecognized tax benefits, which would impact the effective tax rate if recognized, were as follows:
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Unrecognized income tax benefits at the beginning of the period | $ | 1.3 | $ | 2.0 | $ | 1.9 | |||||||||||
| Decreases related to current year tax positions | — | (0.8) | — | ||||||||||||||
| Increases related to current year tax positions | 0.1 | 0.1 | 0.1 | ||||||||||||||
| Decreases related to prior year tax positions | (0.6) | — | — | ||||||||||||||
| Unrecognized income tax benefits at the end of the period | $ | 0.8 | $ | 1.3 | $ | 2.0 | |||||||||||
As of December 31, 2025 and 2024, we had accrued interest and penalties of $0.7 million and $0.6 million. We recognize interest and penalties related to unrecognized tax benefits in income tax benefit in the Consolidated Statements of Operations and Comprehensive Loss. Accrued interest and penalties are included in accrued liabilities and other in the Consolidated Balance Sheets. As of each balance sheet date, we assess our uncertain tax positions to determine whether factors underlying the sustainability assertion have changed.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 5, 2026 | Showing above |
| 2024 | Mar 17, 2025 | |
| 2023 | Mar 14, 2024 | |
| 2022 | Mar 31, 2023 | |
| 2021 | Feb 28, 2022 | |
| 2020 | Mar 4, 2021 | |
| 2019 | Mar 17, 2020 | |
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.