v3.25.4

Income Taxes (Tables) | 12 Months Ended
--- | ---
Dec. 31, 2025
Income Tax Disclosure [Abstract] |
Schedule of Income From Continuing Operations before Income Tax, Related to Domestic and Foreign | Income (loss) from continuing operations before taxes related to our U.S. and foreign operations was as follows:
|  | Years Ended December 31,
(In millions) |  | 2025 |  | 2024 |  | 2023
U.S. |  | $ | 456 |  |  | $ | 486 |  |  | $ | 286 |
Foreign |  | (19) |  |  | (13) |  |  | (26) |
Income from continuing operations before income tax provision |  | $ | 437 |  |  | $ | 473 |  |  | $ | 260 |
Schedule of Components of Income Tax Expense (Benefit) | The income tax provision is comprised of the following:
|  | Years Ended December 31,
(In millions) |  | 2025 |  | 2024 |  | 2023
Current: |  |  |  |  |  |
U.S. Federal |  | $ | 2 |  |  | $ | 8 |  |  | $ | 25 |
State |  | 4 |  |  | 6 |  |  | 6 |
Foreign |  | 17 |  |  | 15 |  |  | 6 |
Total current income tax provision (benefit) |  | $ | 22 |  |  | $ | 29 |  |  | $ | 37 |
Deferred: |  |  |  |  |  |
U.S. Federal |  | $ | 94 |  |  | $ | 56 |  |  | $ | 38 |
State |  | 10 |  |  | 7 |  |  | 3 |
Foreign |  | (5) |  |  | (6) |  |  | (10) |
Total deferred income tax provision |  | $ | 99 |  |  | $ | 57 |  |  | $ | 31 |
Total: |  |  |  |  |  |
U.S. Federal |  | $ | 96 |  |  | $ | 64 |  |  | $ | 63 |
State |  | 14 |  |  | 13 |  |  | 9 |
Foreign |  | 11 |  |  | 9 |  |  | (4) |
Total income tax provision |  | $ | 121 |  |  | $ | 86 |  |  | $ | 68 |
Schedule of Effective Income Tax Rate Reconciliation | The effective tax rate reconciliations were as follows:
|  | Years Ended December 31,
(Dollars in millions) |  | 2025 |  | 2024 |  | 2023
US federal statutory income tax rate |  | $ | 92 |  | 21.0 | % |  | $ | 99 |  | 21.0 | % |  | $ | 54 |  | 21.0 | %
Domestic state and local taxes, net of federal effect (1) |  | 11 |  | 2.5 |  |  | 11 |  | 2.3 |  |  | 7 |  | 2.7 |
Foreign Tax Effects |  |  |  |  |  |  |  |  |
France |  |  |  |  |  |  |  |  |
Changes in valuation allowances |  | 4 |  | 1.0 |  |  | 7 |  | 1.4 |  |  | 1 |  | 0.2 |
Other |  | 3 |  | 0.7 |  |  | 4 |  | 0.8 |  |  | 2 |  | 0.7 |
Spain |  |  |  |  |  |  |  |  |
Changes in valuation allowances |  | 8 |  | 1.8 |  |  | — |  | — |  |  | — |  | — |
Other |  | (2) |  | (0.4) |  |  | (2) |  | (0.4) |  |  | (1) |  | (0.3) |
Other foreign jurisdictions |  | 3 |  | 0.6 |  |  | 3 |  | 0.6 |  |  | (1) |  | (0.3) |
Effect of Cross-Border Tax Laws |  |  |  |  |  |  |  |  |
Global intangible low-taxed income |  | — |  | — |  |  | 9 |  | 1.8 |  |  | — |  | (0.1) |
Other |  | 1 |  | 0.2 |  |  | — |  | — |  |  | (2) |  | (0.6) |
Nontaxable or Nondeductible Items |  |  |  |  |  |  |  |  |
Non-deductible compensation |  | 11 |  | 2.6 |  |  | 15 |  | 3.1 |  |  | 13 |  | 5.0 |
Other |  | 1 |  | 0.1 |  |  | — |  | 0.1 |  |  | 1 |  | 0.2 |
Changes in Unrecognized Tax Benefits |  | — |  | — |  |  | — |  | 0.1 |  |  | (3) |  | (1.1) |
Tax Credits |  |  |  |  |  |  |  |  |
Foreign Tax Credits |  | (6) |  | (1.4) |  |  | (3) |  | (0.5) |  |  | — |  | — |
Other |  | (2) |  | (0.5) |  |  | (2) |  | (0.3) |  |  | (2) |  | (0.7) |
Other Adjustments |  |  |  |  |  |  |  |  |
Stock-based compensation |  | (5) |  | (1.1) |  |  | (6) |  | (1.2) |  |  | — |  | (0.2) |
Benefit from legal entity reorganization (2) |  | — |  | — |  |  | (50) |  | (10.5) |  |  | — |  | — |
Other adjustments |  | 2 |  | 0.5 |  |  | — |  | (0.1) |  |  | (1) |  | (0.6) |
Effective tax rate |  | $ | 121 |  | 27.8 | % |  | $ | 86 |  | 18.1 | % |  | $ | 68 |  | 26.0 | %
(1) State taxes in California, Wisconsin, Massachusetts, Illinois, Michigan, and Georgia made up the majority (greater than 50%) of the tax effect in this category. (2) During the second quarter of 2024, the Company executed a legal entity reorganization in our European Transportation business that resulted in a one-time tax benefit of $41 million in 2024. The impact of this benefit is reflected in the table within Domestic state and local taxes ($3 million benefit), Foreign tax effects ($5 million expense), Effect of cross-border laws ($9 million expense), Tax credits ($2 million benefit), and Other adjustments ($50 million benefit). As previously disclosed, we expect the legal entity reorganization in our European Transportation business to generate a net cash refund of approximately $45 million. In 2024, we made tax payments of $7 million and in 2025 we received a cash refund of $49 million. We expect to receive the remaining $3 million cash refund in 2026.
Schedule of Deferred Tax Assets and Liabilities | The tax effects of temporary differences that give rise to significant portions of the deferred tax asset and deferred tax liability were as follows:
|  | Years Ended December 31,
(In millions) |  | 2025 |  | 2024
Deferred tax asset |  |  |  |
Net operating loss and other tax attribute carryforwards |  | $ | 63 |  |  | $ | 33 |
Accrued expenses |  | 49 |  |  | 75 |
Other |  | 44 |  |  | 24 |
Total deferred tax asset |  | 156 |  |  | 132 |
Valuation allowance |  | (54) |  |  | (26) |
Total deferred tax asset, net |  | 102 |  |  | 106 |
Deferred tax liability |  |  |  |
Intangible assets |  | (79) |  |  | (80) |
Property and equipment |  | (454) |  |  | (384) |
Pension and other retirement obligations |  | (7) |  |  | — |
Other |  | (31) |  |  | (25) |
Total deferred tax liability |  | (571) |  |  | (489) |
Net deferred tax liability |  | $ | (470) |  |  | $ | (382) |
The deferred tax asset and deferred tax liability above are reflected on our Consolidated Balance Sheets as follows:
|  | December 31,
(In millions) |  | 2025 |  | 2024
Other long-term assets |  | $ | 12 |  |  | $ | 11 |
Deferred tax liability |  | (482) |  |  | (393) |
Net deferred tax liability |  | $ | (470) |  |  | $ | (382) |
The balances and activity related to our valuation allowance were as follows:
(In millions) |  | Beginning Balance |  | Additions |  | Reductions |  | Ending Balance
Year Ended December 31, 2025 |  | $ | 26 |  |  | $ | 29 |  |  | $ | (1) |  |  | $ | 54 |
Year Ended December 31, 2024 |  | 18 |  |  | 9 |  |  | (1) |  |  | 26 |
Year Ended December 31, 2023 |  | 35 |  |  | 1 |  |  | (18) |  |  | 18 |
Schedule of Tax Credit Carryforwards | Our operating loss and tax credit carryforwards were as follows:
|  |  |  | December 31,
(In millions) |  | Expiration Date |  | 2025 |  | 2024
Tax effect (before federal benefit) of state net operating losses |  | Various times starting in 2026 (1) |  | $ | 6 |  |  | $ | 5 |
Federal tax credit carryforwards |  | Various times starting in 2033 |  | 2 |  |  | — |
State tax credit carryforward |  | Various times starting in 2026 (1) |  | 1 |  |  | 1 |
Foreign net operating losses available to offset future taxable income |  | Various times starting in 2026 (1) |  | 211 |  |  | 109 |
(1) Some credits and losses have unlimited carryforward periods.
Schedule of Operating Loss Carryforwards | Our operating loss and tax credit carryforwards were as follows:
|  |  |  | December 31,
(In millions) |  | Expiration Date |  | 2025 |  | 2024
Tax effect (before federal benefit) of state net operating losses |  | Various times starting in 2026 (1) |  | $ | 6 |  |  | $ | 5 |
Federal tax credit carryforwards |  | Various times starting in 2033 |  | 2 |  |  | — |
State tax credit carryforward |  | Various times starting in 2026 (1) |  | 1 |  |  | 1 |
Foreign net operating losses available to offset future taxable income |  | Various times starting in 2026 (1) |  | 211 |  |  | 109 |
(1) Some credits and losses have unlimited carryforward periods.
Schedule of Unrecognized Tax Benefits Roll Forward | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
|  | Years Ended December 31,
(In millions) |  | 2025 |  | 2024 |  | 2023
Beginning balance |  | $ | 3 |  |  | $ | 4 |  |  | $ | 6 |
Additions for tax positions of prior years |  | — |  |  | — |  |  | 2 |
Settlements with tax authorities |  | — |  |  | (1) |  |  | — |
Reductions due to the statute of limitations |  | — |  |  | — |  |  | (4) |
Ending balance |  | $ | 3 |  |  | $ | 3 |  |  | $ | 4 |
Interest and penalties |  | 3 |  |  | 2 |  |  | 2 |
Gross unrecognized tax benefits |  | $ | 6 |  |  | $ | 5 |  |  | $ | 6 |
Total unrecognized tax benefits that, if recognized, would impact the effective income tax rate as of the end of the year |  | $ | 6 |  |  | $ | 5 |  |  | $ | 6 |
Cash Paid (Received) for Income Taxes | Cash paid (received) for income taxes is comprised of the following:
|  | Years Ended December 31,
(In millions) |  | 2025 |  | 2024 |  | 2023
U.S. Federal |  | $ | (28) |  |  | $ | 65 |  |  | $ | 21 |
U.S. State and Local |  | 9 |  |  | 13 |  |  | 4 |
Foreign |  |  |  |  |  |
United Kingdom |  | 5 |  |  | 6 |  |  | 3 |
Canada |  | 4 |  |  | * |  | 3 |
France |  | 2 |  |  | * |  | *
Other |  | 5 |  |  | 6 |  |  | 3 |
Total Foreign |  | 15 |  |  | 12 |  |  | 10 |
Total cash paid (received) for income taxes, net of refunds |  | $ | (4) |  |  | $ | 90 |  |  | $ | 34 |
*Jurisdiction below the threshold for separate disclosure for the period presented. Cash paid (received) included in Other.

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