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INCOME TAXES
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
The sources of Earnings from continuing operations before income taxes, classified between domestic and foreign entities, are as follows:
Year Ended December 31,
202520242023
Domestic$728.9 $629.7 $504.0 
Foreign378.6 329.8 64.9 
Total Earnings from continuing operations before income taxes
$1,107.5 $959.5 $568.9 
The components of income tax expense attributable to continuing operations are as follows:
 Year Ended December 31,
 202520242023
Current tax expense:   
Federal$64.6 $125.9 $183.1 
State12.5 46.2 38.9 
Foreign55.1 60.4 44.6 
 $132.2 $232.5 $266.6 
Deferred tax expense (benefit):
  
Federal$83.1 $(6.3)$(63.1)
State15.9 (11.1)(31.6)
Foreign(1.4)(2.7)16.6 
 97.6 (20.1)(78.1)
 Total Provision for income taxes
$229.8 $212.4 $188.5 
The effective tax rates on earnings before income taxes are reconciled to statutory U.S. income tax rates as follows:
Year Ended December 31,
202520242023
Amount%Amount%Amount%
Statutory U.S. rate
$232.6 21.0 %$201.5 21.0 %$119.5 21.0 %
State and local income taxes, net of federal income tax effects (1)
24.3 2.2 %23.4 2.4 %2.7 0.5 %
Foreign tax effects:
Canada:
Deferred tax adjustments
0.4 — %0.5 0.1 %9.9 1.7 %
Other1.1 0.1 %(2.5)(0.3)%3.3 0.6 %
Germany:
Deferred tax adjustments
(0.2)— %(0.2)— %(6.8)(1.2)%
Other1.1 0.1 %1.1 0.1 %5.8 1.0 %
United Kingdom:
Goodwill impairment
— — %— — %39.1 6.9 %
Deferred tax adjustments
0.3 — %— — %12.9 2.3 %
Other(0.3)— %(0.4)— %5.1 0.8 %
Switzerland:
Foreign rate differential
(16.9)(1.5)%(16.0)(1.7)%(16.1)(2.8)%
Other2.7 0.2 %3.8 0.4 %0.6 0.1 %
Other foreign jurisdictions
(0.4)— %(0.3)— %1.0 0.2 %
Enactment of new tax laws
— — %— — %— — %
Effect of cross-border tax laws:
Other3.0 0.3 %4.5 0.5 %2.1 0.4 %
Tax credits:
R&D tax credits
(16.2)(1.5)%(18.0)(1.9)%(13.2)(2.3)%
Other(1.1)(0.1)%(0.7)(0.1)%(1.3)(0.2)%
Valuation allowances
0.5 — %(1.4)(0.1)%— — %
Nontaxable or nondeductible items:
Goodwill impairment
— — %— — %18.1 3.2 %
Officer compensation
8.3 0.7 %6.9 0.7 %9.9 1.7 %
Worthless stock loss
— — %— — %(14.8)(2.6)%
Other5.3 0.5 %7.5 0.8 %5.7 1.0 %
Changes in unrecognized tax benefits
(8.3)(0.7)%1.9 0.2 %(1.0)(0.2)%
Other adjustments:
Deferred tax adjustments
0.1 — %3.2 0.3 %6.4 1.1 %
Other(6.5)(0.6)%(2.4)(0.3)%(0.4)(0.1)%
Effective tax rate
$229.8 20.7 %$212.4 22.1 %$188.5 33.1 %
(1) State taxes in California, New Jersey, and New York contributed to the majority of the tax effect in this category
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows:
December 31,
20252024
Deferred tax assets:  
Derivative instruments
$69.7 $36.5 
Employee compensation and benefits69.0 70.8 
Operating lease liability198.0 199.3 
Credit carryforwards
45.2 0.4 
Capitalized R&D costs
98.2 194.7 
Tax loss carryforwards226.4 224.0 
Other118.2 114.3 
  Total gross deferred tax assets824.7 840.0 
Less: valuation allowance(128.1)(127.2)
Deferred tax assets, net of valuation allowance$696.6 $712.8 
Deferred tax liabilities:  
Right of use asset$(182.9)$(181.6)
Intangible assets(663.3)(626.7)
Property, plant, and equipment(216.7)(177.7)
Other(64.5)(71.7)
Total gross deferred tax liabilities$(1,127.4)$(1,057.7)
Net deferred tax liabilities$(430.8)$(344.9)
The table below provides a rollforward of the valuation allowance:
Year Ended December 31,
202520242023
Beginning balance$127.2 $150.2 $151.3 
Movements charged to expense0.3 (22.8)(8.9)
Reductions and other adjustments0.6 (0.2)7.8 
Ending balance$128.1 $127.2 $150.2 
The Company has U.S. federal tax loss carryforwards of approximately $88.6, which expire periodically through 2037, as well as post-2017 carryforwards of $148.7, which have indefinite carryforwards. The Company has U.S. state tax loss carryforwards of $660.7, a portion of which expire annually. In addition to federal and state net operating losses, the Company has a federal capital loss carryforward of $12.0, which expires in 2030. Credit carryforwards for federal and state income tax purposes are $45.2, the majority of which have indefinite carryforwards. The Company has foreign tax loss carryforwards of $112.4, the majority of which have indefinite carryforwards, as well as foreign tax loss carryforwards of $444.9, which expire periodically through 2041. In addition to the foreign net operating losses, the Company has foreign capital loss carryforwards of $30.5, which have indefinite carryforwards. Deferred tax assets associated with loss and credit carryforwards of $271.6 have been reduced by valuation allowances of $128.1.
The valuation allowance increased from $127.2 in 2024 to $128.1 in 2025 primarily due to the establishment of valuation allowances on certain federal and foreign capital losses which were partially offset by decreases in valuation allowances on certain state and foreign net operating losses.
Unrecognized income tax benefits were $24.5 and $32.2 at December 31, 2025, and 2024, respectively. The Company recognizes interest and penalties related to unrecognized income tax benefits in Provision for income taxes in the Consolidated Statements of Operations. Accrued interest and penalties related to uncertain tax positions totaled $0.0 and $0.2 at December 31, 2025, and 2024, respectively. During the years ended December 31, 2025, 2024, and 2023, the Company recognized $0.0, $0.1 and $0.0, respectively, in interest and penalties expense, which was offset by a benefit from reversing previous accruals for interest and penalties of $0.2, $0.0 and $1.8, respectively.
The following table shows a reconciliation of the unrecognized income tax benefits, excluding interest and penalties, from uncertain tax positions:
Year Ended December 31,
 202520242023
Beginning balance$32.2 $29.9 $37.5 
Increase in reserve for tax positions taken in the current year2.2 2.2 1.8 
Increase in reserve for tax positions taken in a prior period5.5 3.8 10.4 
Decrease in reserve for tax positions taken in a prior period(15.4)(3.4)(4.0)
Decrease in reserve as a result of settlements— (0.1)(7.2)
Decrease in reserve as a result of lapses in the statute of limitations— (0.2)(8.6)
Ending balance$24.5 $32.2 $29.9 
At December 31, 2025, 2024, and 2023, there are $24.5, $32.2 and $29.9, respectively, of tax benefits that, if recognized, would favorably impact the effective income tax rate.
The Company has substantially concluded all U.S. federal income tax matters for years through 2018 and is currently under Internal Revenue Service examination for tax years 2019 through 2022. Substantially all material state and local and foreign income tax matters have been concluded through 2017 and 2019, respectively. The Company has various state and foreign income tax examinations ongoing throughout the year. The Company believes adequate provisions have been recorded related to all open tax years.
Pillar Two legislation arising from the Organisation for Economic Co-operation and Development’s base erosion and profit shifting initiative has been enacted or substantively enacted in certain jurisdictions in which the Company operates. The legislation was effective for the Company’s financial year beginning January 1, 2024. The Company is in scope of the enacted or substantively enacted legislation and has performed an assessment of the Company’s potential exposure to Pillar Two income taxes. The assessment of the potential exposure to Pillar Two income taxes is based on the most recent tax filings, country-by-country reporting, and financial statements for the constituent entities in the Company. Based on the assessment, the Pillar Two effective tax rates in most of the jurisdictions in which the Company operates are above 15%. We expect to qualify for the transitional safe harbor relief in all significant jurisdictions and have not provisioned for any incremental income tax expense attributable to Pillar Two.