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Income Taxes
 6 Months Ended
Jun. 30, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The effective tax rates, including discrete items, were as follows:
Three Months Ended June 30,Six Months Ended June 30,
2025202420252024
Effective tax rate (1)
(2.7)%15.2 %(8.7)%16.4 %
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(1) The decrease in the effective rate for the three and six months ended June 30, 2025, was primarily due to the goodwill impairment charge within our Advanced Polymers Technologies reportable segment, resulting in an overall book loss with a net tax liability.
We determine our interim tax provision using an Estimated Annual Effective Tax Rate methodology (“EAETR”). The EAETR is applied to the year-to-date ordinary income, exclusive of discrete items. The tax effects of discrete items are then included to arrive at the total reported interim tax provision.
The determination of the EAETR is based upon a number of estimates, including the estimated annual pre-tax ordinary income in each tax jurisdiction in which we operate. As our projections of ordinary income change throughout the year, the EAETR will change period-to-period. The tax effects of discrete items are recognized in the tax provision in the period they occur. Depending on various factors, such as the item’s significance in relation to total income and the rate of tax applicable in the jurisdiction to which it relates, discrete items in any quarter may materially impact the reported effective tax rate. As a global enterprise, our tax expense may be impacted by changes in tax rates or laws, the finalization of tax audits and reviews, as well as other factors. As such, there may be significant volatility in interim tax provisions.
The below table provides a reconciliation between our reported effective tax rates and the EAETR.
Three Months Ended June 30,
20252024
In millions, except percentagesBefore taxTaxEffective tax rate % impactBefore taxTaxEffective tax rate % impact
Consolidated operations$(142.7)$3.8 (2.7)%$(334.6)$(50.9)15.2 %
Discrete items:
Restructuring and other (income) charges, net (1)
21.9 5.2 10.0 2.4 
(Gain) loss on strategic investments (2)
2.5 0.6 (0.1)— 
Goodwill impairment (3)
183.8 5.1 349.1 57.0 
Proxy contest charges (4)
0.3 0.1 — — 
Other tax only discrete items
— (0.2)— (0.5)
Total discrete items208.5 10.8 359.0 58.9 
Consolidated operations, before discrete items$65.8 $14.6 $24.4 $8.0 
EAETR (5)
22.2 %33.5 %
Six Months Ended June 30,
20252024
In millions, except percentagesBefore taxTaxEffective tax rate % impactBefore taxTaxEffective tax rate % impact
Consolidated operations$(115.9)$10.1 (8.7)%$(406.5)$(66.8)16.4 %
Discrete items:
Restructuring and other (income) charges, net (1)
34.2 8.1 74.8 17.5 
(Gain) loss on strategic investments (2)
2.5 0.6 4.7 1.1 
Goodwill impairment (3)
183.8 5.1 349.1 57.0 
Proxy contest charges (4)
8.2 1.9 — — 
Other tax only discrete items— (0.6)— (1.4)
Total discrete items228.7 15.1 428.6 74.2 
Consolidated operations, before discrete items$112.8 $25.2 $22.1 $7.4 
EAETR (5)
22.3 %34.5 %
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(1) See Note 11 for further information. For the three and six months ended June 30, 2024, the charge includes zero and $2.5 million of lower of cost or market charges associated with the Performance Chemicals repositioning. Amounts are included in "Cost of sales" on the condensed consolidated statements of operations.
(2) See Note 4 for further information.
(3) See Note 7 for further information.
(4) See Note 14 for further information.
(5) Decrease in EAETR for the three and six months ended June 30, 2025, as compared to June 30, 2024, primarily reflects a shift in the projected mix of earnings across jurisdictions with varying tax rates, most notably in the U.S. Additionally, the increase in U.S. taxable income in 2025 is driving an increased benefit from the foreign-derived intangible income deduction as compared to 2024. The EAETR tax percentage shown for three and six months ended June 30, 2024 may not precisely recalculate due to rounding.
At June 30, 2025 and December 31, 2024, we had deferred tax assets of $12.0 million and $11.0 million, respectively, resulting from certain historical net operating losses from our Brazil and U.S. state tax credits for which a valuation allowance has been established. The ultimate realization of these deferred tax assets depends on the generation of future taxable income during the periods in which these net operating losses and tax credits are available to be used. In evaluating the realizability of these deferred tax assets, we consider projected future taxable income and tax planning strategies in making our assessment. As of June 30, 2025, we cannot objectively assert that these deferred tax assets are more likely than not to be realized and therefore
we have maintained a valuation allowance. We intend to continue maintaining a valuation allowance on these deferred tax assets until there is sufficient evidence to support the reversal of all or some portion of these allowances. A release of all or a portion of the valuation allowance could be possible if we determine that sufficient positive evidence becomes available to allow us to reach a conclusion that the valuation allowance will no longer be needed. A release of the valuation allowance would result in the recognition of certain deferred tax assets and a reduction to income tax expense for the period the release is recorded. However, the exact timing and amount of the valuation allowance release are subject to change based on the level of profitability that we are able to actually achieve.
Pillar Two, released by the Organisation for Economic Cooperation and Development (OECD), went into effect on January 1, 2024. Pillar Two’s intent is to create a 15% global minimum tax for all jurisdictions in which multinational enterprises operate. To date, fourteen of our reporting jurisdictions have enacted final legislation adopting Pillar Two. While we do not anticipate that this legislation will have a material impact on our tax provision or effective tax rate, we continue to monitor evolving tax legislation in the jurisdictions in which we operate. No tax impacts of Pillar Two were recorded for the quarter ended June 30, 2025.