INCOME TAXES

The income tax expense (benefit) attributable to continuing operations for the years ended December 31, 2025, 2024, and 2023, consists of the following:


	Year Ended December 31,
	2025		2024		2023
	(In Thousands)
Current

State	$	244	$	348	$	535
International	13,302		9,228		6,419
	13,546		9,576		6,954
Deferred
Federal	10,533		(94,799)		—
State	258		(2,751)		(41)
International	(2,042)		3,096		(693)
	8,749		(94,454)		(734)
Total income tax expense (benefit)	$	22,295	$	(84,878)	$	6,220

A reconciliations of the expense (benefit) for income taxes attributable to continuing operations, computed by applying the federal statutory rate to income (loss) before income taxes and the reported income taxes, is as follows:


	Year Ended December 31, 2025
	$		%
	(In Thousands)
Income tax expense at United States federal statutory rate	$	5,565	21.0	%
State and local income taxes, net of federal benefit(1)	397		1.5	%
Foreign tax effects
Argentina
Foreign currency remeasurement	804		3.0	%
Inflation adjustment	(379)		(1.4)	%
Out-of-period adjustment(2)	(1,159)		(4.4)	%
Other	354		1.3	%
Brazil
Statutory rate difference between Brazil and United States	1,750		6.6	%
Foreign currency remeasurement	293		1.1	%
Other	309		1.2	%
Canada
Liquidation of Canadian subsidiary	3,287		12.4	%
Valuation allowance	(3,287)		(12.4)	%
Foreign currency translation adjustment loss(3)	2,189		8.3	%
Other	(180)		(0.7)	%
Saudi
Other	386		1.5	%
Sweden
Foreign currency remeasurement	(281)		(1.1)	%
Other	142		0.5	%
United Kingdom
UK taxation on non-UK earnings	461		1.7	%
Other	49		0.2	%
Other foreign jurisdictions	10		0.1	%
Effect of changes in tax laws or rates enacted in the current period	—		—	%
Effect of cross-border tax laws:
US taxation on non-US earnings	1,555		5.9	%
Change of the US tax classification of Brazilian subsidiary(4)	6,886		26.0	%
Tax credits:
Other	(165)		(0.6)	%
Valuation allowance	2,132		8.0	%
Non-taxable or non-deductible items:
Non-deductible compensation	1,272		4.8	%
Other	(140)		(0.5)	%
Uncertain tax positions	—		—	%
Other adjustments	45		0.1	%
Total tax expense and effective tax rate	$	22,295	84.1	%

(1) During the year ended December 31, 2025, State and local income taxes are primarily related to the state of Texas.

(2) During the year ended December 31, 2025, the out-of-period adjustment to our deferred tax liability related to a correction to our 2024 tax provision is discussed in "Note 2-Basis of Presentation and Significant Accounting Policies."

(3) During the year ended December 31, 2025, the foreign currency translation adjustment related to the dissolution of our former subsidiary in Canada during 2025 as discussed in "Note 2-Basis of Presentation and Significant Accounting Policies."

(4) During the year ended December 31, 2025, we elected to change the United States tax classification of our Brazilian subsidiary from a partnership to a corporation. While this tax election is expected to reduce our future consolidated effective

tax rate and with the expectation of improving future cash flow, the tax election results in recognition of approximately $6.9 million of federal deferred tax expense in the current year.


	Year Ended December 31,
	2024		2023
	(In Thousands)
Income tax expense computed at statutory federal income tax rates	$	6,036	$	6,657
State income taxes, net of federal benefit	1,225		1,052
Nondeductible expenses	1,622		1,399
Impact of international operations	4,877		1,285



Valuation allowance	(97,871)		(3,693)


Other	(767)		(480)
Total income tax (benefit) expense	$	(84,878)	$	6,220

During the year ended December 31, 2024, in part because we achieved three years of cumulative pretax income in the United States tax jurisdiction, after adjusting for permanent book and tax differences, which is a positive indication of our ability to generate sufficient future taxable income, we determined that there was sufficient positive evidence to conclude that it is more likely than not that additional deferred taxes are realizable and, therefore, released the valuation allowance accordingly.

The following table summarizes income taxes paid, net of refunds, for the year ended December 31, 2025:


	2025
	(In Thousands)

US State and local	$	406
Foreign
Argentina	1,896
Brazil	3,344
Finland	1,626
Sweden	4,643
Other	630
Total income taxes paid during the period	$	12,545

Income (loss) before income taxes and discontinued operations includes the following components:


	Year Ended December 31,
	2025		2024		2023
	(In Thousands)
United States	$	(4,511)	$	(9,130)	$	8,315
International	31,013		37,872		23,384
Total	$	26,502	$	28,742	$	31,699

As of December 31, 2025 and 2024, we had no unrecognized tax benefits.

We file tax returns in the U.S. and in various state, local, and non-U.S. jurisdictions. The following table summarizes the earliest tax years that remain subject to examination by taxing authorities in any major jurisdiction in which we operate:


			Earliest Open Tax Period
United States – Federal			2012
United States – State and Local			2005
Non-United States Jurisdictions			2013

We use the liability method for reporting income taxes, under which current and deferred tax assets and liabilities are recorded in accordance with enacted tax laws and rates. Under this method, at the end of each period, the amounts of deferred tax assets and liabilities are determined using the tax rate expected to be in effect when the taxes are actually paid or recovered. We establish a valuation allowance to reduce the deferred tax assets when it is more likely than not that some portion or all of the deferred tax assets will not be realized. We considered all available evidence, both positive and negative, in determining whether, based on the weight of that evidence, a valuation allowance is needed for some portion or all of our deferred tax assets. In determining the need for a valuation allowance on our deferred tax assets we placed greater weight on recent and objectively verifiable current information, as compared to more forward-looking information that is used in valuating other assets on the balance sheet. While we have considered taxable income in prior years, future reversals of existing taxable temporary differences, future taxable income, and tax planning strategies in assessing the need for the valuation allowance, there can be no guarantee that we will be able to realize our net deferred tax assets. Significant components of our deferred tax assets and liabilities as of December 31, 2025 and 2024 are as follows:


	December 31,
	2025		2024
	(In Thousands)
Net operating losses	$	83,922	$	89,088

Accruals	25,745		20,602

Depreciation and amortization for book in excess of tax expense	6,594		9,792

All other	12,356		13,353
Total deferred tax assets	128,617		132,835
Valuation allowance	(19,188)		(19,447)
Net deferred tax assets	$	109,429	$	113,388

Right of use assets	$	11,146	$	9,092
Depreciation and amortization for tax in excess of book expense	1,803		2,944
Income deferred for tax	7,240		2,660
Investments	326		1,570
All other	4,090		3,885
Total deferred tax liabilities	24,605		20,151
Net deferred tax assets (liabilities)	$	84,824	$	93,237

Deferred tax assets and liabilities are netted by jurisdiction in our consolidated balance sheets. Deferred tax assets and liabilities netted by jurisdiction as of December 31, 2025 and 2024 are as follows:


	December 31,
	2025		2024
	(In Thousands)
Deferred tax assets	$	87,322	$	98,149
Deferred tax liabilities	(2,498)		(4,912)
Net deferred tax assets	$	84,824	$	93,237

As of December 31, 2025, a significant portion of our deferred tax assets were United States (federal and state) assets, which include net operating loss carryforwards, tax credit carryforwards as well as temporary differences between GAAP and tax basis that will result in future tax deductions in excess of book. Significant management judgment is required in determining the period in which a reversal of a valuation allowance should occur. We are required to consider all available evidence, both positive and negative, such as historical levels of income and future forecasts of taxable income among other items, in determining whether a full or partial release of its valuation allowance is required.

The $0.3 million decrease in the valuation allowance during the year ended December 31, 2025 was primarily due to the decrease in deferred tax assets and associated $3.3 million valuation allowance related to the liquidation of our Canadian subsidiary mostly offset by the $2.1 million valuation allowance on the United States capital loss carryforward, which expires in 2029, and other changes various jurisdictions valuation allowances.

At December 31, 2025, we had deferred tax assets associated with U.S. federal, U.S. state, and non-U.S. net operating loss carryforwards equal to approximately $66.3 million, $8.5 million, and $9.1 million, respectively. In those jurisdictions in which NOLs are subject to an expiration period, our loss carryforwards, if not utilized, will expire at various dates from 2026 through 2041. Utilization of the NOLs, credit carryforwards and other tax attributes may be subject to a significant annual limitation if an “ownership change” under Section 382 of the Internal Revenue Code of 1986, as amended, has previously occurred or were to occur in the future.

Historical Timeline

Fiscal Year	Filed
2025	Feb 25, 2026	Showing above
2024	Feb 25, 2025

2023	Feb 27, 2024

2022	Feb 27, 2023

2021	Feb 28, 2022

2020	Mar 5, 2021

2019	Mar 16, 2020

2018	Mar 4, 2019

2017	Mar 5, 2018

2016	Mar 1, 2017

2015	Mar 4, 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.

TETRA TECHNOLOGIES INC Income Taxes Disclosure

Historical Timeline

About Income Taxes Disclosures

Other Available Disclosures