ROGERS CORPROG
ROGERS CORP Income Taxes Disclosure
Income Taxes
The “Income (loss) before income tax expense” line item in the consolidated statements of operations consisted of:
| (Dollars in millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Domestic | $ | (20.2) | $ | (13.9) | $ | 9.1 | |||||||||||
| Foreign | (24.9) | 48.2 | 67.2 | ||||||||||||||
| Total | $ | (45.1) | $ | 34.3 | $ | 76.3 | |||||||||||
The “Income tax expense (benefit)” line item in the consolidated statements of operations consisted of:
| (Dollars in millions) | Current | Deferred | Total | ||||||||||||||
| 2025 | |||||||||||||||||
| Domestic | $ | 3.6 | $ | (7.9) | $ | (4.3) | |||||||||||
| Foreign | 19.8 | 1.2 | 21.0 | ||||||||||||||
| Total | $ | 23.4 | $ | (6.7) | $ | 16.7 | |||||||||||
| 2024 | |||||||||||||||||
| Domestic | $ | 2.7 | $ | (6.9) | $ | (4.2) | |||||||||||
| Foreign | 22.8 | (10.4) | 12.4 | ||||||||||||||
| Total | $ | 25.5 | $ | (17.3) | $ | 8.2 | |||||||||||
| 2023 | |||||||||||||||||
| Domestic | $ | 0.4 | $ | (0.6) | $ | (0.2) | |||||||||||
| Foreign | 22.9 | (3.0) | 19.9 | ||||||||||||||
| Total | $ | 23.3 | $ | (3.6) | $ | 19.7 | |||||||||||
The “Income taxes paid, net of refunds” line in the consolidated statements of cash flows consisted of:
| (Dollars in millions) | 2025 | ||||
| Income Taxes Paid | |||||
| Federal | $ | 0.2 | |||
US State (1) | 1.4 | ||||
| Foreign | |||||
| China | $ | 15.1 | |||
| United Kingdom | 4.2 | ||||
| Other | (0.1) | ||||
| Foreign total | $ | 19.2 | |||
| Total taxes paid | $ | 20.8 | |||
(1) No individually significant states
Deferred tax assets and liabilities as of December 31, 2025 and 2024, were comprised of the following:
| (Dollars in millions) | 2025 | 2024 | |||||||||
| Deferred tax assets | |||||||||||
| Accrued employee benefits and compensation | $ | 9.2 | $ | 8.7 | |||||||
| Net operating loss carryforwards | 24.2 | 16.4 | |||||||||
| Tax credit carryforwards | 10.6 | 7.0 | |||||||||
| Reserves and accruals | 7.0 | 8.4 | |||||||||
| Operating leases | 5.7 | 2.2 | |||||||||
| Capitalized research and development | 32.9 | 30.4 | |||||||||
| Other | 18.3 | 14.6 | |||||||||
| Total deferred tax assets | 107.9 | 87.7 | |||||||||
| Less deferred tax asset valuation allowance | (22.4) | (12.5) | |||||||||
| Total deferred tax assets, net of valuation allowance | 85.5 | 75.2 | |||||||||
| Deferred tax liabilities | |||||||||||
| Depreciation and amortization | 25.3 | 24.8 | |||||||||
| Postretirement benefit obligations | 1.3 | 1.0 | |||||||||
| Unremitted earnings | 1.8 | 1.3 | |||||||||
| Operating leases | 5.9 | 2.6 | |||||||||
| Other | 1.9 | 2.0 | |||||||||
| Total deferred tax liabilities | 36.2 | 31.7 | |||||||||
| Net deferred tax asset | $ | 49.3 | $ | 43.5 | |||||||
As of December 31, 2025, we had state net operating loss carryforwards totaling $12.7 million in various state taxing jurisdictions, which expire between 2026 and 2044, and approximately $4.9 million of state research credit carryforwards ($3.9 million net of the federal tax benefit), which will expire between 2026 and 2040. We also had a $3.2 million federal research and development (R&D) credit carryforward that will begin to expire in 2043. These tax credit carryforwards are contained in the “Tax credit carryforwards” line item in the deferred tax asset table above. We believe that it is more likely than not that the benefit from certain of the state net operating losses and state R&D credits carryforwards will not be realized. In recognition of this risk, we have provided a valuation allowance of $1.7 million relating to these carryforwards. We currently have approximately $3.5 million of foreign tax credits that begin to expire in 2032.
As of December 31, 2025, we had foreign net operating loss carryforwards totaling $89.6 million. Germany losses totaled $39.6 million and can be carried forward indefinitely. We believe it is more likely than not that these losses will not be utilized, and have provided a valuation allowance for all Germany net operating loss carryforwards. Luxembourg losses totaled $33.1 million, of which $5.8 million will expire between 2034 and 2040, and the rest will be carried forward indefinitely. We believe it is more likely than not that these losses will expire unused, and have provided a valuation allowance for all
Luxembourg net operating loss carryforwards. China losses totaled $11.2 million, which expire between 2029 and 2030. South Korea losses totaled $4.5 million, which expire between 2036 and 2040.
We had a valuation allowance of $22.4 million as of December 31, 2025, $12.5 million as of December 31, 2024 against certain deferred tax assets, primarily carryforwards expected to expire unused and deferred tax assets that are capital in nature. No valuation allowance has been provided on our other deferred tax assets, as we believe it is more likely than not that all such assets will be realized in the applicable jurisdictions. Differences between forecasted and actual future operating results or changes in carryforward periods could adversely impact the amount of deferred tax asset considered realizable.
Income tax expense differs from the amount computed by applying the U.S. federal statutory income tax rate to income before income taxes. The reasons for this difference were as follows:
| (Dollars in millions) | 2025 | ||||||||||
| Tax expense at Federal statutory income tax rate | $ | (9.5) | 21.0 | % | |||||||
State tax, net of federal(1) | (2.0) | 4.4 | % | ||||||||
| Foreign tax effects: | |||||||||||
| China: | |||||||||||
| Statutory tax rate difference between China and United States | 1.2 | (2.7) | % | ||||||||
| Taxable currency fluctuations | (0.9) | 2.0 | % | ||||||||
| Withholding taxes | 5.2 | (11.5) | % | ||||||||
| Deferred tax adjustment | 1.6 | (3.5) | % | ||||||||
| Other items | (0.6) | 1.3 | % | ||||||||
| Luxembourg: | |||||||||||
| Income not taxed under local laws | (2.3) | 5.1 | % | ||||||||
| Other items | 0.3 | (0.7) | % | ||||||||
| Germany: | |||||||||||
| Statutory tax rate difference between Germany and United States | (0.5) | 1.1 | % | ||||||||
| Non-deductible goodwill impairment | 15.0 | (33.3) | % | ||||||||
| Valuation allowance change | 9.1 | (20.2) | % | ||||||||
| Impact of rate change on deferreds | 0.8 | (1.8) | % | ||||||||
| Non-taxable income - transfer pricing | (1.3) | 2.9 | % | ||||||||
| Other items | 0.3 | (0.7) | % | ||||||||
| Belgium - other items | 1.8 | (4.0) | % | ||||||||
| Other foreign jurisdictions | 1.5 | (3.3) | % | ||||||||
| Effect of cross-border tax laws: | |||||||||||
| Foreign source income deduction | (0.7) | 1.6 | % | ||||||||
| Subpart F income, net of foreign tax credits | 0.6 | (1.3) | % | ||||||||
| Branch income tax in US | 0.8 | (1.8) | % | ||||||||
| Other foreign tax credits | (4.7) | 10.4 | % | ||||||||
| Nontaxable or nondeductible items: | |||||||||||
| Equity compensation | 1.0 | (2.2) | % | ||||||||
| Executive compensation limitation | 1.0 | (2.2) | % | ||||||||
| Non-deducted foreign chargebacks | 1.7 | (3.8) | % | ||||||||
| Deferred tax adjustment | (0.6) | 1.3 | % | ||||||||
| Unrecognized tax benefits | (1.9) | 4.2 | % | ||||||||
| Tax credits - research and development | (0.8) | 1.8 | % | ||||||||
| Other | 0.6 | (1.1) | % | ||||||||
| Income tax expense | $ | 16.7 | (37.0) | % | |||||||
(1)State taxes in Arizona, Connecticut, Illinois, Massachusetts, and Pennsylvania made up the majority (greater than 50 percent) of the tax effect in this category.
Our effective income tax rate for 2025 was negative 37.0%, representing tax expense with a pre-tax book loss, compared to income tax expense of 23.9% for 2024. The 2025 rate change was primarily due to (i) the change in valuation allowance against deferred tax assets, and (ii) the curamik® goodwill impairment with no related tax benefit.
In 2024 and 2023, income tax expense differed from the amount computed by applying the U.S. federal statutory income tax rate to income before income taxes. The reasons for this difference were as follows:
| (Dollars in millions) | 2024 | 2023 | |||||||||
| Tax expense at Federal statutory income tax rate | $ | 7.2 | $ | 16.0 | |||||||
| Impact of foreign operations | 2.8 | 4.0 | |||||||||
| Foreign source income, net of tax credits | (2.7) | (2.3) | |||||||||
| State tax, net of federal impact | 0.9 | (0.5) | |||||||||
| Deferred tax adjustment | — | 1.2 | |||||||||
| Unrecognized tax benefits | (1.5) | (0.2) | |||||||||
| Equity compensation | 1.7 | 0.3 | |||||||||
| General business credits | (1.6) | (2.4) | |||||||||
| Distribution related foreign taxes | 1.4 | 1.1 | |||||||||
| Executive compensation limitation | 0.9 | 0.9 | |||||||||
| Valuation allowance change | (0.8) | 0.7 | |||||||||
| JV separation non-taxable | (1.5) | — | |||||||||
| Taxable currency fluctuations | 1.0 | — | |||||||||
| Other | 0.4 | 0.9 | |||||||||
| Income tax expense | $ | 8.2 | $ | 19.7 | |||||||
We did not make any changes in 2025 to our position on the permanent reinvestment of our historical earnings from foreign operations. With the exception of certain Chinese subsidiaries, we continue to assert that historical foreign earnings are indefinitely reinvested. As of December 31, 2025 and 2024, we had recorded a deferred tax liability of $1.8 million and $1.3 million, respectively, for Chinese withholding tax on undistributed earnings that are not indefinitely reinvested. The other remaining foreign subsidiaries have both the intent and ability to indefinitely reinvest their undistributed earnings and we estimate that, if these undistributed earnings are distributed, they may give rise to an estimated $5.9 million of additional tax liabilities. If circumstances change and it becomes apparent that some, or all of the undistributed earnings as of December 31, 2025 will not be indefinitely reinvested, the provision for the tax consequences, if any, will be recorded in the period when circumstances change. Distributions out of current and future earnings are permissible to fund discretionary activities such as business acquisitions. However, when distributions are made, this could result in a higher effective tax rate.
Unrecognized tax benefits, excluding potential interest and penalties, for the years ended December 31, 2025 and 2024, were as follows:
| (Dollars in millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Beginning balance as of January 1 | $ | 6.8 | $ | 8.5 | $ | 8.9 | |||||||||||
| Gross increases - current period tax positions | 0.2 | 0.2 | 1.1 | ||||||||||||||
| Gross increases - tax positions in prior periods | 0.4 | — | — | ||||||||||||||
| Gross decreases - tax positions in prior periods | — | — | (0.5) | ||||||||||||||
| Foreign currency exchange | — | — | 0.1 | ||||||||||||||
| Settlements and remeasurements | (2.0) | (1.8) | 0.1 | ||||||||||||||
| Lapse of statute of limitations | (0.5) | (0.1) | (1.2) | ||||||||||||||
| Ending balance as of December 31 | $ | 4.9 | $ | 6.8 | $ | 8.5 | |||||||||||
Included in the balance of unrecognized tax benefits as of December 31, 2025 were $4.9 million of tax benefits that, if recognized, would impact the effective tax rate.
We recognized interest related to unrecognized tax benefit as income tax expense. Related to the unrecognized tax benefits noted above, as of December 31, 2025 and 2024, we had accrued potential interest and penalties of approximately $1.2 million and $1.3 million, respectively.
We are subject to taxation in the U.S. and various state and foreign jurisdictions. Our tax years from 2021 through 2025 are subject to examination by the tax authorities. With few exceptions, we are no longer subject to U.S. federal, state, local and foreign examinations by tax authorities for the years before 2021.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 19, 2026 | Showing above |
| 2024 | Feb 26, 2025 | |
| 2023 | Feb 27, 2024 | |
| 2022 | Mar 1, 2023 | |
| 2021 | Feb 22, 2022 | |
| 2020 | Feb 19, 2021 | |
| 2019 | Feb 21, 2020 | |
| 2018 | Feb 21, 2019 | |
| 2017 | Feb 28, 2018 | |
| 2016 | Feb 21, 2017 | |
| 2015 | Feb 23, 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.