Income Taxes

12 Months Ended

Dec. 31, 2025

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company operates in multiple jurisdictions with complex tax and regulatory environments and our income tax returns are periodically audited or subjected to review by tax authorities. We monitor tax law changes and the potential impact to our results of operations.

Tax provision (benefit) for income taxes consisted of the following:

	Years Ended December 31,
	2025		2024		2023
	(In millions)
Current
Domestic (1)	$	15.5	$	8.4	$	34.3
Foreign	27.1		21.0		19.7
Total	42.6		29.4		54.0
Deferred
Domestic (1)	(5.3)		(5.2)		3.1
Foreign	(1.5)		(14.5)		3.2
Total	(6.8)		(19.7)		6.3
Provision for income taxes	$	35.8	$	9.7	$	60.3

(1) Domestic refers to Germany.

The following table presents the components of income before income taxes for continuing operations for fiscal years 2025, 2024 and 2023:

	Years Ended December 31,
	2025		2024		2023
	(In millions)
Domestic (1)	$	(17.4)	$	5.5	$	119.1
Foreign	(17.4)		48.4		44.7
Income (loss) before income taxes	$	(34.8)	$	53.9	$	163.8

(1) Domestic refers to Germany.

The overall statutory income tax rate for the German entities was 32.00%, for the years ended December 31, 2025, 2024 and 2023, which includes a corporate income tax rate of 15.0%, a solidarity surcharge of 0.8% and a trade tax rate of 16.2%.

Our effective income tax rate fluctuates based on, among other factors, changes in pre-tax income in countries with varying statutory tax rates, changes in valuation allowances, the amount of tax-free income, and impact of non-deductible expenses.

The following tables reconcile the expected tax expense (benefit) at the German statutory tax rate of 32.0% calculated for the year ended December 31,:

	2025
	(In millions)	%
Loss before income taxes	(34.3)
Expected income tax thereon	11.1	32	%
Goodwill impairment	(3.3)	(9)	%
Other permanent differences	2.6	7	%
Uncertain tax positions	(2.7)	(8)	%
Other	2.7	8	%
Foreign tax effects
Brazil
Effects from tax rate differences	(1.1)	(3)	%
Goodwill impairment	4.5	13	%
Other	(0.3)	(1)	%
U.S.
Effects from tax rate differences	(7.5)	(21)	%
Goodwill impairment	16.9	48	%
Cross border impacts	3.7	11	%
Foreign tax credit	14.1	40	%
Valuation allowance	(6.4)	(18)	%
Other	(2.0)	(6)	%
France
Effects from tax rate differences	(1.0)	(3)	%
Goodwill impairment	(2.1)	(6)	%
Valuation allowance	(1.0)	(3)	%
Other	(0.6)	(2)	%
Italy
Effects from tax rate differences	(2.7)	(8)	%
Goodwill impairment	(13.8)	(40)	%
Other	(1.3)	(4)	%
Luxembourg
Effects from tax rate differences	(1.7)	(5)	%
Changes in tax loss	(9.4)	(27)	%
Valuation allowance	7.3	21	%
Other	(2.5)	(7)	%
Poland
Effects from tax rate differences	(5.4)	(16)	%
Goodwill impairment	(8.1)	(23)	%
Other	0.6	2	%
South Africa
Effects from tax rate differences	(1.1)	(3)	%
Goodwill impairment	(4.3)	(12)	%
Tax loss carry forward	2.0	6	%
Valuation allowance	(3.3)	(9)	%
Other	(1.4)	(4)	%
Sweden
Effects from tax rate differences	(7.3)	(21)	%
Goodwill impairment	(15.3)	(44)	%
Other	(0.1)	—	%
China
Effects from tax rate differences	(1.3)	(4)	%
Valuation allowance	(7.3)	(21)	%
Other	(0.1)	—	%
South Korea
Effects from tax rate differences	4.1	12	%
Goodwill impairment	7.0	20	%
Other	2.0	6	%
Effective tax expense	(35.8)	(104)	%

	2024			2023
	(In millions)
Income before income taxes	$	53.9		$	163.8
Expected income tax thereon	17.0			52.3
Tax rate differences	1.0			(4.2)
Effect of cross-border tax laws	(9.4)			—
Change in valuation allowance	13.0			5.0
Income taxes for prior years	(1.0)			3.3
Uncertain tax position	(13.3)			1.6
Non-deductible interest expenses	—			0.1
Non-deductible expenses, and non-deductible taxes	1.5			2.1
Effects of changes in permanent differences	1.2			—
Tax effect on tax-free income	(1.4)			(1.5)
Other tax effects	1.1			1.6
Income tax expense	$	9.7		$	60.3
Effective tax rate	18.0		%	36.9		%

The 2025 effective income tax rate was (104.4)% compared with 18.0% in 2024. The change in the effective tax rate was mainly driven by the negative tax effects from the goodwill impairment, non-deductible expenses and valuation allowances. Those were partially offset by US tax refunds and tax-free income.

For the tax year ended December 31, 2025, additional valuation allowances were established primarily related to certain foreign net operating losses and other deferred tax assets. As part of the process of preparing the consolidated financial statements, we are required to determine the provision for income taxes. This process involves measuring temporary and permanent differences resulting from differing treatment of items for tax and accounting purposes. Non-deductible expenses and non-deductible taxes were analyzed and resulted in additional income tax.

Differences resulting from differing treatment of items for tax and accounting purpose, the net operating loss, and tax credit carryforwards result in deferred tax assets and liabilities. The deferred tax effects of tax losses, credit and interest carryforwards (“tax attributes”) and the tax effects of temporary differences between the tax basis of assets and liabilities and their amounts reported in the Consolidated Financial Statements, reduced by a valuation allowance where appropriate, are presented below.

	December 31
	2025		2024
	(In millions)
Deferred tax assets
Inventories	$	7.8	$	5.8
Deferred Compensation	4.3		4.0
Provisions	11.1		14.3
Liabilities including leases liabilities	34.0		42.5
Loss carryforwards	59.5		54.0
Interest carryforwards	5.5		5.6
Tax credits	26.2		21.0
Other	11.2		2.6
Total deferred tax assets	159.6		149.8
Valuation allowances	(67.3)		(50.5)
Net deferred tax assets	$	92.3	$	99.3
Deferred Tax Liabilities
Intangible assets	$	1.4	$	1.4
Property, plant and equipment including right of use assets	77.3		92.0
Financial assets	8.0		13.7
Receivables, other assets	13.1		7.1
Total deferred tax liabilities	$	99.8	$	114.2
Net deferred tax assets / (liabilities)	$	(7.5)	$	(14.9)

Our net deferred tax assets and liabilities reflected in our balance sheet are as follows:

Net deferred tax position	December 31
	2025		2024
	(In millions)
Deferred tax assets
Net deferred tax assets	$	20.5	$	21.6
Deferred tax liabilities
Net deferred tax liabilities	28.0		36.5
Net deferred tax asset / (liability) positions	$	(7.5)	$	(14.9)

As of each reporting date, management considers the weight of all evidence, both positive and negative, to determine if a valuation allowance is necessary for each jurisdiction's deferred tax assets. We place greater weight on historical evidence over future projections of our ability to utilize deferred tax assets. We consider future reversals of existing taxable temporary differences, future taxable income exclusive of reversing temporary differences, and taxable income in prior carryback year(s) if carryback is permitted under applicable law, as well as available prudent and feasible tax planning strategies that would, if necessary, be implemented to ensure realization of the net deferred tax assets. The following table presents a summary of our valuation allowance positions:

Valuation allowance	2025		2024		2023
	(In millions)
As of January 1,	$	50.5	$	40.1	$	38.1
Additions for Tax Credits	6.4		—		—
Additions for Loss carryforwards	12.8		10.6		6.0
Additions for Interest carryforwards	0.3		—		—
Additions Other	2.6		0.2		0.2
Reduction for Loss and Interest carryforwards	(5.3)		(0.4)		(4.2)
As of December 31,	$	67.3	$	50.5	$	40.1

The following table provides detail surrounding the expiration dates of the gross amount of tax loss carryforwards and tax credits:

	December 31, 2025
	Net operating loss carryforwards		Tax Credits
	(In millions)
2026 to 2032	$	58.8	$	1.0
2033 and thereafter	—		—
Indefinite carryforwards	183.6		25.2
Total	$	242.4	$	26.2

As of December 31, 2025, we did not provide for deferred taxes on earnings of most of our foreign subsidiaries because they are indefinitely reinvested. If we were to make a distribution from the unremitted earnings of these subsidiaries, we could be subject to taxes in various jurisdictions. However, it is not practical to estimate the amount of tax that could ultimately be due if such earnings were remitted. If our expectations were to change regarding future tax consequences, we may be required to record additional deferred taxes that could have a material effect on our consolidated financial statements.

Liabilities for uncertain tax positions

We had a $4.7 million liability relating to uncertain tax positions unrecognized as of December 31, 2025. The following table presents a reconciliation of the beginning and ending amounts of unrecognized tax benefits:

	2025		2024		2023
	(In millions)
Balance at beginning of the year	$	—	$	13.3	$	11.6
Additions for tax positions of prior year	8.7		—		1.7
Reductions of tax positions of prior year	—		(11.9)		—
Reductions related to settlements and other	(4.0)		(1.4)		—
Balance at end of the year	$	4.7	$	—	$	13.3

The $4.7 million unrecognized tax liability would not impact our effective income tax rate if it were recognized. Tax related interest and penalties are included interest expenses and other expenses and we accrued $1.0 million, none, and $4.4 million for interest and penalties as of December 31, 2025, 2024 and 2023, respectively.

Orion and certain subsidiaries are under audit in several jurisdictions. In 2025, tax audits in Germany, Italy, South Korea and China had been initiated. It is reasonably possible that our existing liabilities for unrecognized tax benefits may increase in future, primarily due to the progression of open audits.

The following table provides detail surrounding the cash paid for income taxes:

	2025
	(In millions)
Germany	$	10.8
USA	7.2
Brazil	15.4
Korea	4.2
Other	3.6
Cash paid for income taxes	$	41.2