Income taxes

12 Months Ended

Dec. 31, 2025

Income taxes

Income taxes

Note 14 – Income taxes:

The provision for income taxes and the difference between the provision for income taxes and the amount that would be expected using the U.S. federal statutory income tax rate are presented below. All of our pre-tax income relates to operations in the United States.

	Years ended December 31,
	2023				2024				2025
	(In thousands)
	Amount		Percent		Amount		Percent		Amount		Percent
U.S. federal statutory tax rate	$	(1,348)	21.0	%	$	17,497	21.0	%	$	(10,799)	21.0	%
Nontaxable dividends received from Kronos		(5,621)	87.6			(3,550)	(4.3)			(1,479)	2.9
Other adjustments:
Reclass for pension termination		(118)	1.8			—	—			(3,863)	7.5
Other		86	(1.3)			110	.2			88	(.2)
Income tax expense (benefit)	$	(7,001)	109.1	%	$	14,057	16.9	%	$	(16,053)	31.2	%

	Years ended December 31,
	2023		2024		2025
	(In thousands)
Components of income tax expense (benefit):
Current income tax expense
U.S. federal	$	247	$	266	$	67
State		60		74		101
		307		340		168
Deferred income taxes (benefit)
U.S. federal		(7,306)		13,720		(16,217)
State		(2)		(3)		(4)
		(7,308)		13,717		(16,221)
Income tax expense (benefit)	$	(7,001)	$	14,057	$	(16,053)
Comprehensive provision (benefit) for income taxes allocable to:
Net income (loss)	$	(7,001)	$	14,057	$	(16,053)
Other comprehensive income (loss):
Currency translation		241		(2,207)		2,103
Defined benefit pension plans		(291)		1,251		10,022
Other		(35)		(28)		27
Comprehensive income tax expense (benefit)	$	(7,086)	$	13,073	$	(3,901)

In accordance with GAAP, we recognize deferred income taxes on our undistributed equity in earnings (losses) of Kronos. Because we and Kronos are part of the same U.S. federal income tax group, any dividends we receive from Kronos are nontaxable to us. Accordingly, we do not recognize and we are not required to pay income taxes on dividends from Kronos. We received aggregate dividends from Kronos of $26.8 million in 2023, $16.9 million in 2024 and $7.0 million in 2025. See Note 6.

The components of the net deferred tax liability at December 31, 2024 and 2025 are summarized in the following table.

	December 31,
	2024				2025
	Assets		Liabilities		Assets		Liabilities
	(In thousands)
Tax effect of temporary differences related to:
Marketable securities	$	—	$	(5,652)	$	—	$	(2,799)
Goodwill		—		(1,693)		—		(1,693)
Accrued environmental liabilities		14,406		—		2,831		—
Other accrued liabilities and deductible differences		1,981		—		2,138		—
Other taxable differences		—		(5,733)		—		(2,945)
Investment in Kronos Worldwide, Inc.		—		(56,700)		—		(52,460)
Tax loss carryforwards		—		—		825		—
Adjusted gross deferred tax assets (liabilities)		16,387		(69,778)		5,794		(59,897)
Netting of items by tax jurisdiction		(16,387)		16,387		(5,794)		5,794
Net noncurrent deferred tax liability	$	—	$	(53,391)	$	—	$	(54,103)

At December 31, 2025, we have a deferred tax asset relating to our NOL carryforwards for federal income tax purposes of $.8 million all of which have an indefinite carryforward period subject to an 80% annual usage limitation. Our deferred tax asset for such NOL carryforward is shown net of a portion of our UTPs as discussed below.

At December 31, 2023, 2024 and 2025, the gross amount of our UTPs (exclusive of the effect of interest and penalties) was $7.3 million, and this amount has not changed during the past three years. Previously, we made certain pro-rata distributions to our stockholders in the form of Kronos common stock and we recognized a taxable gain related to such distributions. Our UTPs are attributable to such prior period distribution of Kronos common stock. As discussed in Note 1, we are part of the Contran Tax Group and we have not paid this liability because Contran has not paid the liability to the applicable tax authority. This liability would be payable to the applicable tax authority only if the previously distributed shares of Kronos common stock were to be sold or otherwise disposed outside of the Contran Tax Group. At December 31, 2025, our UTP is classified as a component of our noncurrent deferred tax liability. If our UTP at December 31, 2025 was recognized, a benefit of $7.3 million would affect our effective income tax rate.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law in the United States. The OBBBA, among other provisions, provides for bonus depreciation of qualified property, permanently modifies the interest expense deduction to use an adjusted taxable income based on a calculation similar to EBITDA, and makes changes to international tax provisions including Foreign-Derived Intangible Income (“FDII”) (renamed Foreign-derived Deduction Eligible Income (FDDEI)). The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The OBBBA did not have a material impact on our 2025 consolidated financial statements, and we are in the process of evaluating the impact to future years as additional provisions take effect.

We believe we have adequate accruals for additional taxes and related interest expense which could ultimately result from tax examinations. We believe the ultimate disposition of tax examinations should not have a material adverse effect on our consolidated financial position, results of operations or liquidity.

We and Contran file income tax returns in U.S. federal and various state and local jurisdictions. Our U.S. income tax returns prior to 2022 are generally considered closed to examination by applicable tax authorities.