v3.25.0.1
INCOME TAXES
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
Income before income taxes consists of:
Years Ended December 31,202420232022
United States$99,573 $49,681 $65,350 
International370,192 325,144 269,354 
Total$469,765 $374,825 $334,704 
The provision (benefit) for income taxes is composed of:
Years Ended December 31,202420232022
Federal:
Current$10,933 $11,777 $12,791 
Deferred(8,936)(10,931)(783)
$1,997 $846 $12,008 
State:
Current$2,744 $1,300 $2,265 
Deferred(923)(675)(99)
$1,821 $625 $2,166 
International:
Current$103,316 $97,455 $92,199 
Deferred(11,547)(8,277)(11,224)
$91,769 $89,178 $80,975 
Total$95,587 $90,649 $95,149 
A reconciliation of the provision for income taxes with the amount computed by applying the statutory federal income tax rate of 21% to income before provision for income taxes is as follows:
Years Ended December 31,202420232022
Income tax at statutory rate$98,651 $78,713 $70,288 
State income taxes, net of federal tax effect1,439 362 1,475 
Excess tax benefits from share-based compensation(11,041)(5,935)(3,306)
Deferred tax (benefits) charges, incl. tax rate changes2,691 (3,512)(2,349)
Valuation allowance(14,625)158 1,486 
Legal entity reorganization— 3,630 5,850 
Rate differential on earnings of foreign operations21,357 18,917 19,165 
Other items, net(2,885)(1,684)2,540 
Actual income tax provision$95,587 $90,649 $95,149 
Effective income tax rate20.3 %24.2 %28.4 %
The provision for income tax is favorably impacted by excess tax benefits on deductible share-based compensation. The tax provision for 2024 reflects a $11.0 million benefit from this item compared with a $5.9 million and $3.3 million tax benefit for 2023 and 2022, respectively. The valuation allowance for 2023 and 2022 reflects losses in jurisdictions where we cannot tax effect the loss. During 2024, we changed our previous assessment on the realization of tax losses, and our need for a valuation allowance, in various jurisdictions due to sufficient positive evidence becoming available during the year. Our revised assessment of the realization of tax losses in Luxembourg resulted in a $11.0 million net tax benefit in 2024. Our mix of earnings has an unfavorable tax rate impact since a majority of our pretax income is earned in higher tax jurisdictions. The provision for income taxes for 2023 and 2022 include a $3.6 million and $5.9 million charge, respectively, for taxes related to a legal entity reorganization intended to enhance our dividend and cash management capabilities.
Significant deferred tax assets and liabilities as of December 31, 2024 and 2023 are composed of the following temporary differences:
20242023
Deferred Tax Assets:
Net operating loss carryforwards$72,766 $49,016 
Operating and finance leases21,712 20,440 
Pension liabilities6,472 13,608 
Share-based compensation3,747 7,326 
U.S. state tax credits5,790 6,110 
Vacation and bonus16,223 16,915 
U.S. capitalized research expenditures41,956 35,563 
Inventory6,094 7,166 
Accrued liabilities and other reserves9,598 9,622 
Other15,575 16,470 
Total gross deferred tax assets$199,933 $182,236 
Less valuation allowance(61,134)(48,856)
Net deferred tax assets$138,799 $133,380 
Deferred Tax Liabilities:
Acquisition related intangibles$51,155 $57,426 
Depreciation and amortization21,325 25,541 
Operating and finance leases22,672 22,715 
Other8,059 6,988 
Total gross deferred tax liabilities$103,211 $112,670 
Net deferred tax assets (liabilities)
$35,588 $20,710 
We evaluate the deferred tax assets and record a valuation allowance when it is believed it is more likely than not that the benefit will not be realized. We have established a valuation allowance for $56.9 million of the $72.8 million of tax effected net operating loss carryforwards. These losses are generally in locations that have not produced cumulative three year operating profit. During 2024 we recorded a $29.5 million deferred tax asset for our tax losses in Luxembourg and have established a valuation allowance of $18.5 million related to this asset. Additionally, given our current earnings and anticipated future earnings, we believe there is a reasonable possibility that within the next 12 months, sufficient positive evidence may become available to support the realization of $7.0 million to $10.0 million of deferred tax assets for which there is currently a corresponding valuation allowance. A valuation allowance of $4.0 million has also been established against the $5.8 million of U.S. state tax credit carryforwards.
There is no expiration date on $63.7 million of the tax-effected net operating loss carryforwards and $9.1 million (tax effected) will expire in the years 2025 to 2044. The U.S. state tax credit carryforwards of $5.8 million (tax effected) will expire in the years 2025 to 2039.
None of the earnings accumulated outside of the U.S. will be subject to U.S. taxation under the current U.S. federal income tax laws. We maintain our assertion that all other cash and distributable reserves at our non-U.S. affiliates will continue to be indefinitely reinvested, with the exception of earnings in Germany and the pre-2020 earnings in Italy, Switzerland and Colombia. We estimate the amount of additional local income tax and withholding tax that would be payable on distributions to be in the range of $15 million to $20 million if earnings accumulated outside the U.S. are repatriated to the U.S.
Income Tax Uncertainties
We provide a liability for the amount of tax benefits realized from uncertain tax positions. A reconciliation of the beginning and ending amount of income tax uncertainties is as follows:
202420232022
Balance at January 1$5,942 $6,919 $7,225 
Increases based on tax positions for the current year300 985 1,433 
Increases (Decreases) based on tax positions of prior years107 (997)(1,616)
Settlements(127)(901)(80)
Lapse of statute of limitations(430)(64)(43)
Balance at December 31$5,792 $5,942 $6,919 
As of December 31, 2024, the total amount of unrecognized tax benefits was $5.8 million, which if recognized, would favorably impact our effective tax rate. We estimate that it is reasonably possible that the liability for uncertain tax positions will decrease by approximately $1.3 million in the next 12 months from the resolution of various uncertain positions as a result of the completion of tax audits, litigation and the expiration of the statute of limitations in various jurisdictions.
We recognize interest and penalties related to unrecognized tax benefits as a component of income taxes. As of December 31, 2024, 2023 and 2022, we had approximately $3.6 million, $3.4 million and $4.9 million, respectively, accrued for the payment of interest and penalties, of which approximately $0.2 million, $0.2 million and $0.3 million was recognized in income tax expense for the years ended December 31, 2024, 2023 and 2022, respectively.
Aptar or its subsidiaries file income tax returns in the U.S. Federal jurisdiction and various state and foreign jurisdictions. The major tax jurisdictions we file in, with the years still subject to income tax examinations, are listed below:
Major Tax
Jurisdiction		Tax Years
Subject to
Examination
United States — Federal2021-2024
United States — State2020-2024
France2021-2024
Germany2022-2024
Italy2018-2024
China2014-2024