Company: MATV
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001000623-25-000049
Chunk: 30

Company: Mativ Holdings, Inc.
Filing Date: 2025-08-07
Form: 10-Q
Item: Item 1
Chunk 30
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, including the ability of the Company to accurately forecast pre-tax and taxable income and loss by jurisdiction, changes in laws or regulations, and expenses or losses for which tax benefits are not recognized. Jurisdictions with a projected loss for the year or an actual year-to-date loss where no tax benefit can be recognized are excluded from the estimated annual effective tax rate. The impact of including these jurisdictions on the quarterly effective tax rate calculations could result in a higher or lower effective tax rate during a quarter, based upon the mix and timing of actual earnings versus annual projections.The Company's effective tax rate from continuing operations was 416.7% and 84.4% for the three months ended June 30, 2025 and 2024, respectively. The net change was primarily due to mix of earnings and impact from valuation allowance changes in the current period and a one-time tax adjustment in the prior period. The Company's effective tax rate from continuing operations was 2.7% and 25.4% for the six months ended June 30, 2025 and 2024, respectively. The net change was primarily due to mix of earnings, impact from a $59.4 million increase to our valuation allowance, and goodwill impairment not deductible for tax purposes in the current period. 

Prior to the passage of the Tax Cuts and Jobs Act of 2017 ("Tax Act"), the Company asserted that substantially all of the undistributed earnings of its foreign subsidiaries were considered indefinitely reinvested and accordingly, no deferred taxes were provided. Due to the Tax Act, the Company has significant previously taxed earnings and profits from its foreign subsidiaries, as a result of transition tax, that it is generally able to be repatriated free of U.S. federal tax. In addition, future earnings of foreign subsidiaries are generally expected to be able to be repatriated free of U.S. federal income tax because these earnings were taxed in the U.S. under the GILTI regime or would be eligible for a 100% dividends received deduction. As a result of the Company’s treasury policy to simplify and expediate its intercompany cash flows, as evidenced by the use of cash pooling, and in light of the Company’s demonstrated goal of driving growth though inorganic/acquisitional means, the Company does not assert indefinite reinvestment to the extent of each controlled foreign corporation's earnings and profits and to the extent of any foreign partnership’s U.S. tax capital accounts. As a result, the Company has provided for non-U.S. withholding