INCOME TAXES |
6 Months Ended |
|---|---|
Jun. 30, 2025 | |
| Income Tax Disclosure [Abstract] | |
| INCOME TAXES | INCOME TAXES We recorded income tax expense of $4.7 million and $15.5 million for the three months ended June 30, 2025 and 2024, respectively. For the six months ended June 30, 2025 and 2024, we recorded income tax expense of $8.9 million and $25.2 million, respectively. Our effective income tax rate was 431.6% and 81.9% for the three months ended June 30, 2025 and 2024, respectively, and 167.1% and 65.3% for the six months ended June 30, 2025 and 2024, respectively. For the six months ended June 30, 2025 and 2024, the income tax expense differed each period due to an overall decrease in pre-tax income. Our 2025 and 2024 income tax expense and rates differed from the amount of income tax determined by applying the U.S. Federal income tax rate to pre-tax income primarily as a result of foreign income tax rate differential on the mix of earnings, the valuation allowance on the interest expense carryforward, and certain foreign inclusion items on the domestic provision. We continue to monitor the realization of our deferred tax assets and assesses the need for a valuation allowance. We analyze available positive and negative evidence to determine if a valuation allowance is needed based on the weight of the evidence. This objectively verifiable evidence primarily includes the past three years' profit and loss positions. This process requires management to make estimates, assumptions, and judgments that are uncertain in nature. We have established valuation allowances with respect to certain deferred tax assets in the U.S. and certain foreign jurisdictions and continues to monitor and assess the need for valuation allowances in all its jurisdictions. The Organization Economic Co-operation and Development (OECD) introduced Base Erosion and Profit Shifting (BEPS) Pillar 2 rules that impose a global minimum tax rate of 15%. Numerous countries, including European Union member states, have enacted legislation effective as early as January 1, 2024, with general implementation of a global minimum tax by January 1, 2025. Other countries are expected to enact similar legislation. Titan will continue to evaluate the potential impact on the condensed consolidated financial statements and related disclosures but does not anticipate a material impact. Titan did not record any tax associated with Pillar 2 for the six months ended June 30, 2025. The One, Big, Beautiful Bill Act (the “Act”) was signed into law on July 4th. 2025. The Act contains significant tax law changes with various effective dates, with certain provisions effective in 2025 and other implemented through 2027, affecting business taxpayers. Among the tax law changes that will impact the Company are those that relate to the timing of certain tax deductions including depreciation expense, R&D expenditures, and interest expense. The Company is currently evaluating the impact of the Act on our consolidated financial statements.
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