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Note 7 - Income Taxes
 9 Months Ended
Sep. 30, 2025
Notes to Financial Statements  
Income Tax Disclosure [Text Block]

7.

Income Taxes

 

Our effective income tax rate was 24.0% for the three months ended September 30, 2025, compared to 25.2% for the three months ended September 30, 2024. Our effective income tax rate was 25.6% for the first nine months of 2025, compared to 26.8% in 2024. In determining our quarterly provision for income taxes, we use an estimated annual effective tax rate, adjusted for discrete items. This rate is based on our expected annual income, statutory tax rates, best estimate of nontaxable and nondeductible items of income and expense, and the ultimate outcome of tax audits.

 

At September 30, 2025, we had a total of $80.6 million in gross unrecognized tax benefits, which are a component of other long-term liabilities on our Condensed Consolidated Balance Sheets. Of this amount, $64.9 million represents the amount of unrecognized tax benefits that, if recognized, would impact our effective tax rate. The total amount of accrued interest and penalties for such unrecognized tax benefits was $17.3 million at September 30, 2025.

 

On July 4, 2025, new U.S tax legislation was signed into law which makes permanent many of the tax provisions enacted in 2017 as part of the Tax Cuts and Jobs Act that were set to expire at the end of 2025. In addition, the legislation makes changes to certain U.S. corporate tax provisions. We continue to evaluate the impact of the new legislation; however, we do not expect it to have a material impact on our consolidated statements of earnings. Our deferred income tax liabilities as of September 30, 2025 and December 31, 2024 were $938 million and $896 million, respectively.  This increase was primarily due to the bonus depreciation and domestic tax research cost expensing provisions of the legislation.