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Income Taxes | 12 Months Ended
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Dec. 31, 2025
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes In 2025, 2024 and 2023, we recorded tax provisions of $35.3 million, $188.9 million, and $90.4 million, respectively. Cash tax payments, net of refunds were $172.2 million, $109.7 million, and $357.7 million for 2025, 2024 and 2023, respectively. One Big Beautiful Bill Act ("OBBBA") On July 4, 2025, the OBBBA, which includes a broad range of tax reform provisions that may affect a Company's financial results, was signed into law. The OBBBA allows an elective deduction for domestic Research and Development (“R&D”), a reinstatement of elective 100% first-year bonus depreciation, and a more favorable tax rate on Foreign-Derived Deduction Eligible Income (“FDDEI”) and income from non-U.S. subsidiaries (Net CFC tested income), among other provisions. For the year ended December 31, 2025, the primary impact of the OBBBA to the Company’s tax provision was the accelerated expensing of domestic R&D activities, which reduced the current tax liability and corresponding deferred tax asset and additionally decreased the Company’s income eligible for FDDEI. OBBBA did not materially impact the Company’s overall tax expense. The components of earnings before income tax provision were as follows:
|  | Year Ended December 31,
(In millions) |  | 2025 |  | 2024 |  | 2023
Domestic |  | $ | 162.2 |  |  | $ | 150.0 |  |  | $ | 134.8 |
Foreign |  | 314.3 |  |  | 308.4 |  |  | 294.9 |
Total |  | $ | 476.5 |  |  | $ | 458.4 |  |  | $ | 429.7 |
The components of our income tax provision were as follows:
|  | Year Ended December 31,
(In millions) |  | 2025 |  | 2024 |  | 2023
Current tax (benefit) expense: |  |  |  |  |  |
Federal |  | $ | (114.8) |  |  | $ | 90.0 |  |  | $ | 23.6 |
State and local |  | 9.1 |  |  | 13.4 |  |  | 13.2 |
Foreign |  | 67.6 |  |  | 101.9 |  |  | 81.8 |
Total current (benefit) expense |  | $ | (38.1) |  |  | $ | 205.3 |  |  | $ | 118.6 |
Deferred tax expense (benefit): |  |  |  |  |  |
Federal |  | $ | 57.6 |  |  | $ | (51.1) |  |  | $ | (28.1) |
State and local |  | 3.7 |  |  | 1.5 |  |  | (5.8) |
Foreign |  | 12.1 |  |  | 33.2 |  |  | 5.7 |
Total deferred tax expense (benefit) |  | 73.4 |  |  | (16.4) |  |  | (28.2) |
Total income tax provision |  | $ | 35.3 |  |  | $ | 188.9 |  |  | $ | 90.4 |
Deferred tax assets (liabilities) consist of the following:
|  | December 31,
(In millions) |  | 2025 |  | 2024
Accruals not yet deductible for tax purposes |  | $ | 25.1 |  |  | $ | 30.7 |
Net operating loss carryforwards |  | 222.6 |  |  | 186.3 |
Foreign, federal and state credits |  | 35.5 |  |  | 23.8 |
Employee benefit items |  | 36.8 |  |  | 46.8 |
Capitalized expenses |  | 79.9 |  |  | 138.8 |
Derivatives and other |  | 49.9 |  |  | 45.5 |
Sub-total deferred tax assets |  | 449.8 |  |  | 471.9 |
Valuation allowance |  | (219.8) |  |  | (183.3) |
Total deferred tax assets |  | $ | 230.0 |  |  | $ | 288.6 |
Depreciation and amortization |  | $ | (101.0) |  |  | $ | (97.5) |
Unremitted foreign earnings |  | (1.7) |  |  | (1.6) |
Intangible assets |  | (98.9) |  |  | (103.6) |
Total deferred tax liabilities |  | (201.6) |  |  | (202.7) |
Net deferred tax assets |  | $ | 28.4 |  |  | $ | 85.9 |
The decrease in total deferred tax assets is primarily related to the elective deduction for domestic R&D, partially offset by disallowed interest expense and the generation of U.S. Federal net operating losses. Valuation allowances have been provided based on the uncertainty of realizing the tax benefits of certain deferred tax assets, primarily: •$201.3 million of foreign items, primarily foreign net operating losses; and •$14.6 million of tax credits, primarily U.S. state tax credits and U.S. foreign tax credits For the year ended December 31, 2025, the valuation allowances increased by $36.5 million. The change is primarily driven by foreign currency translation adjustments and the establishment of a valuation allowance in Luxembourg. As of December 31, 2025, we have foreign net operating loss carryforwards of $884.0 million expiring in years beginning in 2026, with most losses having an unlimited carryover. The U.S. Federal net operating loss carryforward totaling $44.0 million has an unlimited carryover and the state net operating loss carryforwards totaling $151.3 million expire in various amounts over 1 to 30 years. As of December 31, 2025, we have $26.6 million of federal tax credit carryforwards and $11.2 million of state credit carryovers expiring between 2026 and 2035. The Company has indefinitely reinvested most of its foreign earnings, which are the principal component of U.S. and foreign outside basis differences. Remitting these foreign earnings would result in additional foreign and U.S. income tax consequences, the net tax costs of which are not practicable to determine. As the Company has adopted ASU 2023‑09, the following table presents the reconciliation of provision for income taxes, with the amount computed by applying the statutory federal income tax rate, 21%, for the year ended December 31, 2025:
|  | Year Ended December 31,
(In millions) |  | 2025 |  |  |  |
U.S. federal income tax expense |  | $ | 100.1 |  |  | 21.0 | % |  |  |  |  |  |  |  |
State income taxes, net of federal tax benefit (1) |  | 11.4 |  |  | 2.4 | % |  |  |  |  |  |  |  |
Foreign tax effects: |  |  |  |  |  |  |  |  |  |  |  |
Luxembourg |  |  |  |  |  |  |  |  |  |  |  |
Net change in valuation allowance |  | 16.4 |  |  | 3.4 | % |  |  |  |  |  |  |  |
Other |  | 0.5 |  |  | 0.1 | % |  |  |  |  |  |  |  |
Other foreign jurisdictions |  | 17.5 |  |  | 3.7 | % |  |  |  |  |  |  |  |
Effect of cross-border tax laws |  |  |  |  |  |  |  |  |  |  |  |
Subpart F (net of credits) |  | 13.4 |  |  | 2.8 | % |  |  |  |  |  |  |  |
Other |  | 0.9 |  |  | 0.2 | % |  |  |  |  |  |  |  |
Tax credits |  | (2.6) |  |  | (0.5) | % |  |  |  |  |  |  |  |
Net change in valuation allowance |  | 1.1 |  |  | 0.2 | % |  |  |  |  |  |  |  |
Net change in unrecognized tax benefits |  | (127.9) |  |  | (26.8) | % |  |  |  |  |  |  |  |
Nontaxable or nondeductible items |  | 7.7 |  |  | 1.6 | % |  |  |  |  |  |  |  |
Other |  | (3.2) |  |  | (0.7) | % |  |  |  |  |  |  |  |
Income tax provision and rate |  | $ | 35.3 |  |  | 7.4 | % |  |  |  |  |  |  |  |
(1)For the year ended December 31, 2025, state income taxes in California, Pennsylvania, Iowa, Florida, Tennessee, and North Carolina made up the majority (greater than 50%) of the tax effect in this category. The following table presents the reconciliation of provision for income taxes, with the amount computed by applying the statutory federal income tax rate, 21%, for the years ended December 31, 2024 and 2023:
|  |  |  |  | Year Ended December 31,
(In millions) |  |  |  | 2024 |  | 2023
Computed expected tax |  |  |  |  |  | $ | 96.2 |  |  | 21.0 | % |  | $ | 90.2 |  |  | 21.0 | %
State income taxes, net of federal tax benefit |  |  |  |  |  | 12.1 |  |  | 2.6 | % |  | 4.8 |  |  | 1.1 | %
Foreign earnings taxed at different rates |  |  |  |  |  | 24.9 |  |  | 5.4 | % |  | 4.5 |  |  | 1.0 | %
U.S. tax on foreign earnings |  |  |  |  |  | 10.8 |  |  | 2.4 | % |  | 14.9 |  |  | 3.5 | %
Tax credits |  |  |  |  |  | (24.2) |  |  | (5.3) | % |  | (27.6) |  |  | (6.4) | %
Withholding tax |  |  |  |  |  | 4.4 |  |  | 1.0 | % |  | 6.0 |  |  | 1.4 | %
Net change in valuation allowance |  |  |  |  |  | (3.3) |  |  | (0.7) | % |  | 13.0 |  |  | 3.0 | %
Net change in unrecognized tax benefits |  |  |  |  |  | 12.2 |  |  | 2.7 | % |  | (22.3) |  |  | (5.2) | %
Deferred tax adjustments |  |  |  |  |  | 43.3 |  |  | 9.4 | % |  | 0.4 |  |  | 0.1 | %
Other |  |  |  |  |  | 12.5 |  |  | 2.7 | % |  | 6.5 |  |  | 1.5 | %
Income tax provision and rate |  |  |  |  |  | $ | 188.9 |  |  | 41.2 | % |  | $ | 90.4 |  |  | 21.0 | %
The following table shows the total and components of our income taxes paid (net of refunds received) for each jurisdiction for the year ended December 31, 2025:
|  | Year Ended December 31,
(In millions) |  | 2025 |  |  |  |
Federal |  | $ | 49.5 |  |  |  |  |
State and local |  | $ | 12.2 |  |  |  |  |
Foreign |  |  |  |  |  |
Mexico |  | $ | 25.5 |  |  |  |  |
United Kingdom |  | 13.9 |  |  |  |  |
Argentina |  | 9.7 |  |  |  |  |
Others(1) |  | 61.4 |  |  |  |  |
Total |  | $ | 172.2 |  |  |  |  |
(1)Jurisdictions that do not meet the separate reporting requirement threshold of 5 percent. Income taxes paid (net of refunds received) for the years ended December 31, 2024 and 2023 were $109.7 million and $357.7 million, respectively. Unrecognized Tax Benefits We are providing the following disclosures related to our unrecognized tax benefits and the effect on our effective income tax rate if recognized:
|  | Year Ended December 31,
(In millions) |  | 2025 |  | 2024 |  | 2023
Beginning balance of unrecognized tax benefits |  | $ | 227.4 |  |  | $ | 236.6 |  |  | $ | 420.1 |
Additions for tax positions of current year |  | 3.8 |  |  | 2.3 |  |  | 0.9 |
Additions for tax positions of prior years |  | 9.9 |  |  | 1.8 |  |  | 7.5 |
Reductions for tax positions of prior years |  | (0.2) |  |  | (11.7) |  |  | (0.4) |
Reductions for lapses of statutes of limitation and settlements |  | (207.4) |  |  | (1.6) |  |  | (191.5) |
Ending balance of unrecognized tax benefits |  | $ | 33.5 |  |  | $ | 227.4 |  |  | $ | 236.6 |
In 2025, our unrecognized tax benefit decreased by $193.9 million primarily related to the resolution of U.S. and international tax matters. In 2024, our unrecognized tax benefit decreased by $9.2 million, primarily related to foreign currency translation adjustments on unrecognized tax benefits. If the unrecognized tax benefits at December 31, 2025 were recognized, our income tax provision would decrease by $32.4 million, resulting in a lower effective tax rate. Most of the unrecognized tax benefit amount of $33.5 million relates to North America. Net Income reflected in Discontinued Operations for the year ended December 31, 2025 was $64.3 million and is primarily the result of the reduction of uncertain tax positions associated with the resolution of U.S. tax matters. Interest and penalties were $16.0 million of this amount. Interest and penalties recorded in Continuing Operations were $58.3 million of income related to reversal of accruals associated with uncertain tax positions in 2025 and $10.4 million and $8.4 million of expense, respectively, in 2024 and 2023. We had gross liabilities recorded in Unrecognized Tax Benefits for interest and penalties of $13.7 million at December 31, 2025, $107.9 million at December 31, 2024 and $97.3 million at December 31, 2023. Income Tax Returns The IRS had proposed to disallow for the 2014 taxable year the entirety of the deduction of the approximately $1.49 billion in settlement payments made in 2014 to resolve all current and future asbestos-related claims made against us and our affiliates in connection with a 1998 multi-step transaction (the “Cryovac transaction”) involving W.R. Grace & Co. (“Grace”) which brought the Cryovac packaging business and the former Sealed Air’s business under the common ownership of the Company, and the subsequent Grace bankruptcy, as well as certain related indemnification claims, and the resulting reduction of our U.S. federal tax liability by approximately $525 million. We reached a definitive agreement with the IRS Independent Office of Appeals to settle this matter during the fourth quarter of 2023. In the third quarter of 2025, we resolved IRS audits associated with the years 2017 through 2019. State income tax returns are generally subject to examination for a period of 3 to 5 years after their filing date. We have various state income tax returns in the process of examination and are generally open to examination for periods after 2014. Our foreign income tax returns are under examination in various jurisdictions in which we conduct business. The statute of limitations in foreign jurisdictions generally range from 3 to 5 years after the tax return filing date. We have various foreign returns in the process of examination and have generally concluded income tax matters in other foreign jurisdictions for the years prior to 2018. The OECD has issued Pillar Two model rules introducing a new global minimum tax of 15% effective on January 1, 2024. While the U.S. has not yet adopted the Pillar Two rules, various other governments around the world have enacted Pillar Two legislation. We recorded $1.6 million and $0.7 million of Pillar Two tax for the year ending December 31, 2025 and 2024, respectively. Management believes that an adequate income tax provision has been made for any adjustments that may result from tax examinations. However, the outcome of tax audits cannot be predicted with certainty. If any of the issues addressed in the Company’s tax audits are resolved in a manner that is inconsistent with management’s expectations, the Company could be required to adjust its provision for income taxes in the period such resolution occurs and could be required to make significant payments as a result.

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