Income Taxes

12 Months Ended

Dec. 31, 2024

Income Taxes [Abstract]

Income Taxes

Note 8.  Income Taxes

Income (loss) from operations before provision for taxes by domestic and foreign source is as follows:

	Year Ended December 31,
(millions of dollars)	2024		2023			2022
Income (loss) from operations before income taxes and income from affiliates and joint ventures:
Domestic	$	40.7	$	(38.9	)	$	39.3
Foreign		182.9		146.6			117.4
	$	223.6	$	107.7		$	156.7

The provision (benefit) for taxes on income consists of the following:

	Year Ended December 31,
(millions of dollars)	2024			2023			2022
Domestic
Taxes currently payable
Federal	$	20.0		$	9.5		$	16.3
State and local		2.8			6.7			3.3
Deferred income taxes		(12.3	)		(31.5	)		(16.0	)
Domestic tax provision (benefit)		10.5			(15.3	)		3.6
Foreign
Taxes currently payable		44.2			42.2			29.8
Deferred income taxes		4.7			(3.2	)		(1.3	)
Foreign tax provision		48.9			39.0			28.5
Total tax provision	$	59.4		$	23.7		$	32.1

The provision (benefit) for taxes on income shown in the previous table is classified based on the location of the taxing authority, regardless of the location in which the taxable income is generated.

The major elements contributing to the difference between the U.S. federal statutory tax rate and the consolidated effective tax rate are as follows:

	Year Ended December 31,
	2024			2023			2022
U.S. statutory rate		21.0	%		21.0	%		21.0	%
Depletion		(4.4	)%		(10.3	)%		(6.1	)%
Difference between tax provided on foreign earnings and the U.S. statutory rate		4.7	%		7.7	%		2.4	%
Global Intangible Low-Tax Income (GILTI)		0.1	%		1.0	%		2.3	%
Foreign Derived Intangible Income		(1.0	)%		(2.5	)%		—
State and local taxes, net of federal tax benefit		1.4	%		(0.1	)%		(0.4	)%
Tax credits		(0.7	)%		(0.6	)%		(0.4	)%
Bankruptcy Funding		3.1	%		—			—
Impact of uncertain tax positions		(0.3	)%		0.2	%		(1.3	)%
Impact of officer’s non-deductible compensation		1.1	%		1.9	%		1.3	%
Foreign Withholding Tax		0.8	%		2.0	%		1.2	%
Other		0.8	%		1.7	%		0.5	%
Consolidated effective tax rate		26.6	%		22.0	%		20.5	%

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are presented below:

	December 31,
(millions of dollars)	2024			2023
Deferred tax assets attributable to:
Accrued liabilities	$	31.4		$	26.8
Net operating loss carry forwards		23.2			32.8
Pension and post-retirement benefits costs		2.9			16.0
Interest		16.2			9.1
Research and development capitalization		11.0			7.7
Valuation allowance		(20.6	)		(25.2	)
Other		13.3			21.3
Total deferred tax assets		77.4			88.5
Deferred tax liabilities attributable to:
Plant and equipment, principally due to differences in depreciation		138.0			146.0
Intangible assets		49.5			53.6
Other		5.6			12.2
Total deferred tax liabilities		193.1			211.8
Net deferred tax liability	$	(115.7	)	$	(123.3	)

Net deferred tax assets and net deferred tax liabilities are classified as follows:

	December 31,
(millions of dollars)	2024				2023
Net deferred tax asset, long-term		$	14.8			$	16.0
Net deferred tax liability, long-term			130.5				139.3
Net deferred tax liability, long-term		$	(115.7	)		$	(123.3	)

The Company has $23.2 million of deferred tax assets arising from tax loss carry forwards which will be realized through future operations. Carry forwards of approximately $14.2 million expire over the next 20 years, and $9.0 million can be utilized over an indefinite period.

On December 31, 2024, the Company had $1.9 million of total unrecognized tax benefits. Included in this amount were a total of $1.3 million of unrecognized income tax benefits that, if recognized, would affect the Company’s effective tax rate. While it is expected that the amount of unrecognized tax benefits will change in the next 12 months, we do not expect the change to have a significant impact on the results of operations or the financial position of the Company.

The following table summarizes the activity related to our unrecognized tax benefits:

(millions of dollars)	2024			2023
Balance at beginning of the year	$	2.8		$	2.6
Increases related to current year tax positions		0.5			0.5
Decreases related to audit settlements and statute expirations		(1.4	)		(0.3	)
Balance at the end of the year	$	1.9		$	2.8

The Company’s accounting policy is to recognize interest and penalties accrued, relating to unrecognized income tax benefits as part of its provision for income taxes. The Company recorded a net reversal of $0.1 million in interest and penalties during 2024 and had a total accrued balance on December 31, 2024 of $0.4 million. The Company believes that its accrued liabilities are sufficient to cover its U.S. and foreign tax contingencies.

The Company operates in multiple taxing jurisdictions, both within and outside the U.S. In certain situations, a taxing authority may challenge positions that the Company has adopted in its income tax filings. The Company, with a few exceptions (none of which are material), is no longer subject to U.S. federal, state, local, and international income tax examinations by tax authorities for years prior to 2017.

Net cash paid for income taxes were $70.8 million, $53.8 million and $44.0 million for the years ended December 31, 2024, 2023 and 2022, respectively.

The Company had approximately $497.7 million of foreign subsidiaries’ undistributed earnings as of December 31, 2024. We intend to continue to permanently reinvest these earnings overseas for the foreseeable future and while U.S. federal tax expense has been recognized as a result of recent U.S. tax code changes, no deferred tax liabilities with respect to foreign withholding taxes or state taxes have been recognized.

In December 2021, the Organization for Economic Co-operation and Development (“OECD”) released the Pillar Two Model Rules which aim to reform international corporate taxation rules, including the implementation of a global minimum tax rate. The Company began implementation of the Pillar Two Model Rules in the first quarter of 2024. The Company continues to assess the effect of the Pillar 2 Model Rules in all jurisdictions and does not expect that Pillar 2 will have a material impact on its consolidated financial statements.