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v3.25.4

Income Taxes | 12 Months Ended
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Dec. 31, 2025
Income Tax Disclosure [Abstract] |
Income Taxes | Note 17—Income Taxes The sources of income before income taxes were as follows (in millions):
|  | Year Ended December 31, |
|  | 2025 |  |  | 2024 |  |  | 2023 |
U.S. |  | $ | 697.5 |  |  | $ | 698.7 |  |  | $ | 751.6 |
Foreign |  |  | 277.3 |  |  |  | 195.0 |  |  |  | 106.1 |
Income before income taxes |  | $ | 974.8 |  |  | $ | 893.7 |  |  | $ | 857.7 |
The income tax provision consists of the following (in millions):
|  | Year Ended December 31, |
|  | 2025 |  |  | 2024 |  |  | 2023 |
Current: |  |  |  |  |  |  |  |  |
Federal |  | $ | 80.4 |  |  | $ | 128.0 |  |  | $ | 194.4 |
Foreign |  |  | 70.4 |  |  |  | 77.4 |  |  |  | 63.7 |
State |  |  | 42.7 |  |  |  | 42.0 |  |  |  | 73.9 |
Total current income tax provision |  |  | 193.5 |  |  |  | 247.4 |  |  |  | 332.0 |
Deferred: |  |  |  |  |  |  |  |  |
Federal |  |  | 0.1 |  |  |  | (67.7 | ) |  |  | (53.9 | )
Foreign |  |  | (12.2 | ) |  |  | (14.9 | ) |  |  | (20.8 | )
State |  |  | (5.3 | ) |  |  | (32.8 | ) |  |  | (8.2 | )
Total deferred income tax (benefit) provision |  |  | (17.4 | ) |  |  | (115.4 | ) |  |  | (82.9 | )
Total income tax provision |  | $ | 176.1 |  |  | $ | 132.0 |  |  | $ | 249.1 |
Beginning in 2025 annual reporting, as described in Note 2, we adopted ASU 2023‑09, Improvements to Income Tax Disclosures, prospectively. A reconciliation of the U.S. federal statutory income tax rate to our effective tax rate pursuant to the disclosure requirements of ASU 2023-09 for the year ended December 31, 2025 is as follows (in millions, except percentages):
|  | Year Ended December 31, |
|  | 2025 |
|  | Amount |  |  | Percent |
U.S. federal statutory tax rate |  | $ | 204.7 |  |  |  | 21.0 | %
State and local income taxes, net of federal income tax effect (1) |  |  | 29.4 |  |  |  | 3.0 |
Foreign tax effects |  |  |  |  |  |
Malta |  |  |  |  |  |
Interest expense |  |  | (11.5 | ) |  |  | (1.2 | )
Other |  |  | (0.8 | ) |  |  | (0.1 | )
Other foreign jurisdictions |  |  | 4.7 |  |  |  | 0.5 |
Effect of cross-border tax laws |  |  |  |  |  |
Global Intangible Low-Taxed Income and Subpart F |  |  | 29.7 |  |  |  | 3.0 |
Other |  |  | (5.4 | ) |  |  | (0.6 | )
Tax credits |  |  |  |  |  |
Research and development tax credits |  |  | (22.8 | ) |  |  | (2.3 | )
Foreign tax credits |  |  | (15.7 | ) |  |  | (1.6 | )
Nontaxable or nondeductible items |  |  |  |  |  |
Stock based compensation |  |  | (28.6 | ) |  |  | (2.9 | )
Officers compensation |  |  | 17.7 |  |  |  | 1.8 |
Other |  |  | (0.2 | ) |  |  | — |
Changes in unrecognized tax benefits |  |  | (21.7 | ) |  |  | (2.2 | )
Other adjustments |  |  | (3.4 | ) |  |  | (0.3 | )
Effective tax rate |  | $ | 176.1 |  |  |  | 18.1 | %
(1) State and local taxes in New York, New York City, Illinois, and California for 2025 made up the majority (greater than 50 percent) of the tax effect in this category. The reconciliation between the expected tax expense and the actual tax provision computed by applying the U.S. federal corporate income tax rate of 21% to income before income taxes for the years ended December 31, 2024 and 2023 in accordance with the guidance prior to the adoption of ASU 2023-09 is as follows (in millions):
|  | Year Ended December 31, |
|  | 2024 |  |  | 2023 |
Computed “expected” tax expense |  | $ | 187.7 |  |  | $ | 180.1 |
Increase (decrease) in income tax expense resulting from: |  |  |  |  |  |
State income taxes (net of federal income tax benefit) |  |  | 7.2 |  |  |  | 51.9 |
Foreign operations |  |  | 15.6 |  |  |  | 34.6 |
Effects of stock based compensation |  |  | (19.4 | ) |  |  | (5.5 | )
Effect of valuation allowance |  |  | (6.6 | ) |  |  | (17.2 | )
Uncertain tax positions |  |  | (32.4 | ) |  |  | 19.2 |
Tax credits |  |  | (16.9 | ) |  |  | (13.3 | )
Other |  |  | (3.2 | ) |  |  | (0.7 | )
Provision for income taxes |  | $ | 132.0 |  |  | $ | 249.1 |
On July 4, 2025, the One Big Beautiful Bill Act (“OB3”) was enacted in the United States. The OB3 includes a broad range of tax reform provisions for businesses, including extensions of key provisions of the 2017 Tax Cuts and Jobs Act, modifications to the international tax framework, and restoration of favorable tax treatment for certain business provisions. Certain provisions of the legislation became effective in 2025 while others are effective in 2026. The most significant tax provisions impacting our consolidated financial statements include the accelerated expensing of research and development costs incurred in the United States for tax years beginning after December 31, 2024, and 100% bonus depreciation for qualified property acquired and placed in service after January 19, 2025. The legislation did not have a material impact on our provision for income taxes in 2025. We will continue to evaluate the future impact of OB3 on our 2026 and subsequent consolidated financial statements. Beginning in 2025 annual reporting, as described in Note 2, we adopted ASU 2023‑09, Improvements to Income Tax Disclosures, prospectively. Cash paid for income taxes, net of refunds, for the year ended December 31, 2025 is as follows (in millions):
|  | Year Ended December 31,
|  | 2025 |  |
U.S. federal |  | $ | 111.5 |  |
U.S. state and local |  |  | 34.1 |  |
Foreign |  |  |  |
Luxembourg |  |  | 24.6 |  |
United Kingdom |  |  | 15.3 |  |
Other foreign jurisdictions |  |  | 33.9 |  |
Total foreign |  |  | 73.8 |  |
Total income taxes paid |  | $ | 219.4 |  |
The components of deferred tax (liabilities) assets at December 31, 2025 and 2024 are as follows (in millions):
|  | Year Ended December 31, |
|  | 2025 |  |  | 2024 |
Deferred tax liabilities: |  |  |  |  |  |
Depreciable and amortizable property |  | $ | (882.4 | ) |  | $ | (764.2 | )
Investments |  |  | (174.4 | ) |  |  | (170.6 | )
Leases |  |  | (53.4 | ) |  |  | (48.0 | )
Other |  |  | (13.0 | ) |  |  | (12.0 | )
Total deferred tax liabilities |  |  | (1,123.2 | ) |  |  | (994.8 | )
Deferred tax assets: |  |  |  |  |  |
Net operating loss carryforwards |  |  | 87.8 |  |  |  | 68.3 |
Deferred compensation |  |  | 78.6 |  |  |  | 87.2 |
Tax credit carryforwards |  |  | 36.0 |  |  |  | 35.1 |
Interest expense carryforwards |  |  | 39.8 |  |  |  | 43.1 |
Accrued expenses |  |  | 15.4 |  |  |  | 2.1 |
Leases |  |  | 59.7 |  |  |  | 54.7 |
Other |  |  | 36.2 |  |  |  | 39.7 |
Total deferred tax assets |  |  | 353.5 |  |  |  | 330.2 |
Valuation allowance |  |  | (47.6 | ) |  |  | (38.4 | )
Deferred tax assets, net of valuation allowance |  |  | 305.9 |  |  |  | 291.8 |
Net deferred tax liabilities |  | $ | (817.3 | ) |  | $ | (703.0 | )
At December 31, 2025 and 2024, we had accrued a deferred income tax liability for foreign withholding taxes of $10.3 million and $9.6 million, respectively, on the unremitted earnings of our major Canadian subsidiary and certain unconsolidated foreign affiliates we do not control and whose earnings cannot be considered permanently reinvested. We have not accrued any deferred income taxes for withholding, foreign local or U.S. state income taxes on the unremitted earnings of other foreign subsidiaries as those earnings are permanently reinvested. At December 31, 2025, we have domestic federal net operating loss carryforwards of $42.3 million, which will begin to expire in 2027 and state net operating loss carryforwards of $98.3 million, which will begin to expire in 2026. At December 31, 2025, we have foreign net operating loss carryforwards of $292.1 million, of which $278.2 million can be carried forward indefinitely. The remaining $13.9 million will begin to expire in 2026. At December 31, 2025, we have tax credit carryforwards of $36.0 million relating to domestic and foreign jurisdictions, of which $15.3 million relate to domestic tax credits that are expected to be utilized before they begin to expire in 2026, $16.8 million relate to domestic tax credits that are not expected to be utilized before they begin to expire in 2026, $3.2 million relate to foreign jurisdictions that are expected to be utilized before they begin to expire in 2027 and $0.7 million relate to foreign jurisdictions that are not expected to be utilized before they begin to expire in 2027. The domestic credits consist primarily of federal and state research and development credits and foreign tax credits, while the foreign credits consist primarily of research and development credits and foreign tax credits in various jurisdictions and minimum alternative tax credit carryforwards related to our India operations. A valuation allowance is recorded against deferred tax assets if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. We have recorded valuation allowances of $47.6 million and $38.4 million at December 31, 2025 and 2024, respectively, related primarily to certain foreign and state net operating loss carryforwards and tax credit carryforwards. Of the $47.6 million valuation allowance recorded at December 31, 2025, $8.6 million relates to foreign attribute carryforwards that do not expire. The change in the valuation allowance from 2024 to 2025 is primarily due to an increase in valuation allowance on net operating loss and tax credit carryforwards. The following table summarizes the activity related to our unrecognized tax benefits for the years ended December 31, 2025 and 2024 (in millions):
Balance at December 31, 2023 |  | $ | 142.0 |
Increases related to current year tax positions |  |  | 10.2 |
Increases related to prior tax positions |  |  | 25.0 |
Decreases related to prior tax positions |  |  | (23.2 | )
Lapse in statute of limitation |  |  | (35.3 | )
Foreign exchange translation adjustment |  |  | (0.2 | )
Balance at December 31, 2024 |  | $ | 118.5 |
Increases related to current year tax positions |  |  | 8.4 |
Increases related to prior tax positions |  |  | 0.8 |
Decreases related to prior tax positions |  |  | (4.1 | )
Lapse in statute of limitation |  |  | (22.7 | )
Foreign exchange translation adjustment |  |  | (0.3 | )
Balance at December 31, 2025 |  | $ | 100.6 |
We recorded net benefits of $6.9 million and $12.9 million for potential penalties and interest on the unrecognized tax benefits during 2025 and 2024, respectively, and have recorded a total liability for potential penalties and interest, including penalties and interest related to unrecognized tax benefits, of $7.2 million and $16.1 million at December 31, 2025 and 2024, respectively. Our unrecognized tax benefits decreased from 2024 to 2025 due to a lapse in the statute of limitations for certain domestic tax filings and a decrease in prior year tax positions, offset partially by an increase in current year tax positions. Our unrecognized tax benefits decreased from 2023 to 2024 due to a lapse in the statute of limitations for certain domestic and foreign tax filings, offset partially by an increase in current and prior year tax positions. Our unrecognized tax benefits as of December 31, 2025 relate to domestic and foreign taxing jurisdictions and are recorded in other long-term liabilities on our Consolidated Balance Sheet at December 31, 2025. Our U.S. federal income tax returns are currently under audit for tax years 2018 and 2019, while tax years 2022 through 2025 remain subject to examination. Various tax years from 2012 through 2025 are under, or are subject to, various state and foreign income tax examinations by taxing authorities.

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