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Income Taxes | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The following table shows the components of income before income taxes, excluding affiliates, for the years ended December 31 (in millions):
| 2024 |  | 2023 |  | 2022
Income before Income Taxes |  |  |  |  |
Domestic | $ | 80.6 |  |  | $ | 82.9 |  |  | $ | 55.8 |
Foreign | 180.8 |  |  | 162.6 |  |  | 121.3 |
Total | $ | 261.4 |  |  | $ | 245.5 |  |  | $ | 177.1 |
The following table shows income taxes, excluding domestic and foreign affiliates, for the years ended December 31 (in millions):
| 2024 |  | 2023 |  | 2022
Income Tax Expense |  |  |  |  |
Current |  |  |  |  |
Domestic: |  |  |  |  |
Federal | $ | — |  |  | $ | 2.9 |  |  | $ | 0.2 |
State and local | 0.7 |  |  | 0.2 |  |  | — |
| $ | 0.7 |  |  | $ | 3.1 |  |  | $ | 0.2 |
Foreign | 13.5 |  |  | 17.3 |  |  | 18.3 |
Total current | $ | 14.2 |  |  | $ | 20.4 |  |  | $ | 18.5 |
Deferred |  |  |  |  |
Domestic: |  |  |  |  |
Federal | $ | 18.4 |  |  | $ | 13.5 |  |  | $ | 11.1 |
State and local | (6.4) |  |  | (1.8) |  |  | 2.7 |
| $ | 12.0 |  |  | $ | 11.7 |  |  | $ | 13.8 |
Foreign | 33.8 |  |  | 26.6 |  |  | 22.5 |
Total deferred | $ | 45.8 |  |  | $ | 38.3 |  |  | $ | 36.3 |
Income taxes | $ | 60.0 |  |  | $ | 58.7 |  |  | $ | 54.8 |
The following table is a reconciliation between the federal statutory income tax rate and our effective income tax rate for the years ended December 31 (in millions):
| 2024 |  | 2023 |  | 2022
Income taxes at federal statutory rate | $ | 54.9 |  |  | $ | 51.6 |  |  | $ | 37.2 |
Adjust for effect of: |  |  |  |  |
Foreign earnings taxed at applicable statutory rates | 9.3 |  |  | 9.8 |  |  | 18.0 |
Foreign deferred tax rate change impact | — |  |  | — |  |  | (2.9) |
Nondeductible compensation | 4.3 |  |  | 2.7 |  |  | 2.6 |
Share-based compensation | (2.2) |  |  | (1.7) |  |  | (2.3) |
State income taxes | 3.0 |  |  | 3.7 |  |  | 2.6 |
State income tax rate change impact | (6.0) |  |  | (3.0) |  |  | (8.3) |
State net operating loss valuation allowance | (1.8) |  |  | (2.3) |  |  | 9.9 |
Other | (1.5) |  |  | (2.1) |  |  | (2.0) |
Income taxes | $ | 60.0 |  |  | $ | 58.7 |  |  | $ | 54.8 |
Effective income tax rate | 23.0 | % |  | 23.9 | % |  | 30.9 | %
In 2024, our effective tax rate was 23.0% compared to 23.9% in 2023 and 30.9% in 2022. The adjustment for foreign earnings in each year reflected the impact of applicable statutory tax rates on income earned at our foreign subsidiaries. Compensation is adjusted for the difference between the deductibility of these expenses under the U.S. tax law versus U.S. GAAP. State income taxes are recognized on domestic pretax income or loss. The amount of our domestic income subject to state taxes relative to our total worldwide income impacts the effect state income tax has on our overall income tax rate. Separately, our affiliates incurred income taxes of $25.5 million, $25.7 million, and $12.3 million respectively in 2024, 2023, and 2022. The following table shows the significant components of our deferred tax liabilities and assets as of December 31 (in millions):
| 2024 |  | 2023
Deferred Tax Liabilities |  |  |
Book/tax basis difference due to depreciation | $ | 1,327.9 |  |  | $ | 1,263.5 |
Right-of-use assets | 41.3 |  |  | 52.9 |
Investments in affiliated companies | 4.5 |  |  | 16.8 |
Lease accounting | 18.0 |  |  | 17.2 |
Intangible amortization | 1.5 |  |  | 1.7 |
Other | 4.9 |  |  | 4.5 |
Total deferred tax liabilities | $ | 1,398.1 |  |  | $ | 1,356.6 |
Deferred Tax Assets |  |  |
Lease liability | $ | 44.4 |  |  | $ | 56.6 |
Federal net operating loss | 82.6 |  |  | 75.0 |
Foreign tax credit | 0.8 |  |  | 0.8 |
Valuation allowance on foreign tax credit | (0.8) |  |  | (0.8) |
Federal interest limitation carryforward | 72.5 |  |  | 77.3 |
State net operating loss | 37.4 |  |  | 40.1 |
Valuation allowance on state net operating loss | (20.4) |  |  | (20.3) |
State interest limitation carryforward | 11.4 |  |  | 13.0 |
Foreign net operating loss | 4.4 |  |  | 4.1 |
Accruals not currently deductible for tax purposes | 32.3 |  |  | 21.0 |
Allowance for losses | 1.3 |  |  | 1.0 |
Pension and post-retirement benefits | 2.1 |  |  | 5.8 |
Other | 2.8 |  |  | 1.9 |
Total deferred tax assets | $ | 270.8 |  |  | $ | 275.5 |
Net deferred tax liabilities | $ | 1,127.3 |  |  | $ | 1,081.1 |
Deferred income taxes are the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. We expect at this time to continue reinvestment of foreign earnings outside the U.S. indefinitely. Consequently, our tax provision does not include any deferred tax costs that might arise due to book versus tax basis differences in investments in foreign subsidiaries. Under provisions of the territorial tax system, future dividend distributions from foreign subsidiaries and affiliates are generally exempt from U.S. income tax. Taxes may arise from withholding taxes or on foreign exchange or other gains recognized in connection with the basis differences in our investments in foreign subsidiaries. The ultimate tax cost of repatriating these earnings depends on tax laws in effect and other circumstances at the time of distribution. At December 31, 2024, we had a U.S. federal tax net operating loss carryforward of $393.2 million that can be carried forward indefinitely until the loss is fully recovered. The utilization of net operating losses carried forward are limited to 80% of future taxable income. We also had foreign tax credits of $0.8 million that expire after 2027. We have recorded a $0.8 million valuation allowance related to these credits, as we believe it is more likely than not that we will be unable to utilize them. At December 31, 2024, due to a provision of the Tax Cuts and Jobs Act of 2017 (the "Tax Act"), the deductibility of interest expense may be limited on our federal tax return. Disallowed amounts can be carried forward indefinitely until the expense is fully utilized. As a result of this limitation, we have a federal interest expense carryforward amount of $356.5 million. At December 31, 2024, we had state tax net operating losses of $37.4 million, net of federal benefits that are scheduled to expire at various times beginning in 2025. We have recorded a $20.4 million valuation allowance related to state net operating losses, as we believe it is more likely than not that we will be unable to use all of these losses. Also, as a result of the provision in the Tax Act limiting the deductibility of interest expense on our federal tax return, as referenced above, we had a corresponding state interest limitation of $11.4 million that can be carried forward indefinitely until the expense is fully utilized. At December 31, 2024, we had foreign net operating losses of $4.4 million, with various carryforward periods. It is more likely than not that we will be able to use these losses in the future, and therefore, no valuation allowance is required at this time. At December 31, 2024, our gross liability for unrecognized tax benefits was $8.3 million. Of this amount, $8.1 million is attributed to our foreign operations. We recognize interest and penalties related to unrecognized tax benefits as income tax expense. To the extent interest is not assessed or is otherwise reduced with respect to uncertain tax positions, we will record any required adjustment as a reduction of income tax expense. We file one separate federal income tax return and one consolidated federal income tax return with our domestic subsidiaries in the U.S. jurisdiction, as well as tax returns in various state and foreign jurisdictions. As of December 31, 2024, all audits or statutes of limitations with respect to our federal tax returns for years prior to 2021 have been closed or expired. Additionally, we currently have no open federal income tax audits, no open state income tax audits, and three of our foreign jurisdictions have open income tax audits.

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