v3.25.2
Income taxes
 6 Months Ended
Jun. 30, 2025
Income taxes  
Income taxes

Note 13 – Income taxes:

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Three months ended

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Six months ended

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June 30, 

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June 30, 

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2024

    

2025

    

2024

    

2025

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(In thousands)

Expected tax expense, at U.S. federal statutory income tax rate of 21%

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$

2,048

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$

212

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$

3,792

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$

485

Rate differences on equity in earnings (losses) of Kronos, net of dividends

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(776)

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(275)

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(1,558)

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(594)

U.S. state income taxes and other, net

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30

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20

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56

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43

Income tax expense (benefit)

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$

1,302

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$

(43)

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$

2,290

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$

(66)

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Comprehensive provision (benefit) for income taxes allocable to:

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Net income

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$

1,302

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$

(43)

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$

2,290

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$

(66)

Additional paid-in capital

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8

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8

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8

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8

Other comprehensive income (loss):

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Currency translation

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124

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914

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(1,196)

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2,026

Pension plans

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101

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85

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202

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170

Other

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(11)

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(9)

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(19)

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(18)

Total

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$

1,524

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$

955

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$

1,285

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$

2,120

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In accordance with GAAP, we recognize deferred income taxes on our undistributed equity in earnings 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 $13.4 million and $3.5 million in the first six months of 2024 and 2025, respectively. The amounts shown in the above table of our income tax rate reconciliation for rate differences on equity in earnings (losses) of Kronos, net of dividends, represent the income tax benefit associated with the nontaxable dividends we received from Kronos compared to the amount of deferred income taxes we recognized on our equity in earnings (losses) of Kronos.

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 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. We are in the process of evaluating the relevant provisions of the Act and do not expect them to have a material impact on our tax provision.

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Income tax matters related to Kronos

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On July 18, 2025, Germany enacted legislation which includes, among other provisions, an additional depreciation allowance for certain fixed assets, improvements to the research and development tax allowance and, starting in 2028, a reduction of the 15% corporate tax rate by one percentage point in each of five years until the tax rate reaches 10% in 2032.  Kronos has significant German

corporate net operating loss carryforwards and it expects to record deferred income tax expense of between $20 million and $23 million in the third quarter of 2025 to reduce its net deferred tax assets as a result of the reduction of the German corporate tax rate.