Company: ICUI
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0000883984-25-000016
Chunk: 142

Company: ICU MEDICAL INC/DE
Filing Date: 2025-05-08
Form: 10-Q
Item: Item 8
Chunk 142
---
 ended March 31, 2025. The significant piece of objectively verifiable negative evidence evaluated was the recent U.S. cumulative losses. The Company's ability to use our deferred tax assets depends on the amount of taxable income in future periods.  Based on current earnings and anticipated future earnings along with expected changes in our deferred tax asset and liability balances, it is likely that the current valuation allowance position will be adjusted during the year. An additional valuation allowance may be required beyond the current year if future earnings are not sufficient to support the realization of deferred tax assets.    

45

In December 2022, the European Union (EU) agreed to implement Pillar Two, the OECD’s global minimum tax rate of 15% for multinationals that meet a global revenue threshold.  All of the EU countries and some of the non-EU countries in which we operate have enacted or have announced plans to enact legislation to adopt Pillar Two. Some aspects of the Pillar Two legislation were effective for our fiscal year beginning January 1, 2024, with certain remaining impacts to be effective in 2025. For fiscal year 2025, we have considered the impact of Pillar 2 in our tax provision and effective tax rate. However, the Pillar Two rules continue to evolve and their application may alter our tax obligations in certain countries in which we operate for fiscal periods beyond 2025 as we continue to assess the impact of tax legislation in these jurisdictions. 

The effective tax rate for the three months ended March 31, 2024 differs from the federal statutory rate of 21% principally because of the effect of the mix of U.S. and foreign incomes, state income taxes, section 162(m) excess compensation, federal and state valuation allowance, and tax credits.

The Company recorded a valuation allowance of $10.1 million tax expense, against certain U.S. federal and state deferred tax assets during the three months ended March 31, 2024. The significant piece of objectively verifiable negative evidence evaluated was the recent U.S. cumulative losses.

Liquidity and Capital Resources

We regularly evaluate our liquidity and capital resources, including our access to external capital, to assess our ability to meet our principal cash requirements, which include working capital requirements, planned capital investments in our business, commitments, acquisition restructuring and integration expenses, investments in quality systems and quality compliance objectives, payment of interest expense, repayment of outstanding borrowings, income tax obligations and acquisition opportunities in accordance with our growth strategy.

Sources of Liquidity