XML 44 R23.htm IDEA: XBRL DOCUMENT
v3.25.4

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2025
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes
The components of "Earnings (loss) before income taxes" shown in the Consolidated Statements of Operations are as follows:
| Year Ended December 31,
| 2025 |  | 2024 |  | 2023
Domestic | $ | (14.0) |  |  | $ | (586.2) |  |  | $ | (388.6) |
Foreign | 303.7 |  |  | 77.0 |  |  | 215.2 |
Earnings (loss) before income taxes | $ | 289.7 |  |  | $ | (509.2) |  |  | $ | (173.4) |
"Income taxes" shown in the Consolidated Statements of Operations is comprised of the following components:
| Year Ended December 31,
| 2025 |  | 2024 |  | 2023
Current |  |  |  |  |
Federal | $ | 20.8 |  |  | $ | 7.2 |  |  | $ | 24.4 |
State and local | 4.7 |  |  | 1.4 |  |  | 3.7 |
Foreign | 49.0 |  |  | 51.6 |  |  | 64.5 |
Total current | 74.5 |  |  | 60.2 |  |  | 92.6 |
Deferred |  |  |  |  |
Federal | (21.5) |  |  | (48.6) |  |  | (100.6) |
State and local | (3.3) |  |  | (7.2) |  |  | (19.9) |
Foreign | 4.6 |  |  | (2.2) |  |  | (8.7) |
Total deferred | (20.2) |  |  | (58.0) |  |  | (129.2) |
Total income taxes | $ | 54.3 |  |  | $ | 2.2 |  |  | $ | (36.6) |
A reconciliation of the provision for "Income taxes" in amounts and as percentages of "Earnings (loss) before income taxes" differs from the statutory federal income tax rate after the adoption of ASU 2023-09 as follows:
| Year Ended December 31,
| 2025 |  |  |  |
| Amount |  | Percent |  |  |  |  |  |  |  |
U.S. statutory federal income tax rate | $ | 60.8 |  |  | 21.0 | % |  |  |  |  |  |  |  |
State and local income taxes, net of federal income tax effect 1 | 2.3 |  |  | .8 |  |  |  |  |  |  |  |  |
Foreign tax effects |  |  |  |  |  |  |  |  |  |  |
Canada |  |  |  |  |  |  |  |  |  |  |
Withholding taxes | 12.7 |  |  | 4.4 |  |  |  |  |  |  |  |  |
Local income taxes | 3.3 |  |  | 1.1 |  |  |  |  |  |  |  |  |
Other | (2.3) |  |  | (.8) |  |  |  |  |  |  |  |  |
China |  |  |  |  |  |  |  |  |  |  |
Statutory tax rate difference between China and United States | (3.3) |  |  | (1.1) |  |  |  |  |  |  |  |  |
Withholding taxes | 6.0 |  |  | 2.1 |  |  |  |  |  |  |  |  |
Nontaxable or nondeductible items | (3.1) |  |  | (1.1) |  |  |  |  |  |  |  |  |
Other | .9 |  |  | .3 |  |  |  |  |  |  |  |  |
Cyprus | (3.5) |  |  | (1.2) |  |  |  |  |  |  |  |  |
France |  |  |  |  |  |  |  |  |  |  |
Nontaxable gain related to divestiture of Aerospace Products Group | (11.8) |  |  | (4.1) |  |  |  |  |  |  |  |  |
Other | 2.4 |  |  | .8 |  |  |  |  |  |  |  |  |
United Kingdom |  |  |  |  |  |  |  |  |  |  |
Nontaxable gain related to divestiture of Aerospace Products Group | (15.2) |  |  | (5.3) |  |  |  |  |  |  |  |  |
Other | 2.2 |  |  | .8 |  |  |  |  |  |  |  |  |
Other foreign jurisdictions | 1.6 |  |  | .6 |  |  |  |  |  |  |  |  |
Effect of changes in tax laws or rates enacted in current period | 1.6 |  |  | .6 |  |  |  |  |  |  |  |  |
Effect of cross-border tax laws |  |  |  |  |  |  |  |  |  |  |
Global intangible low-taxed income (GILTI), net | 4.1 |  |  | 1.4 |  |  |  |  |  |  |  |  |
Other, net | (.2) |  |  | (.1) |  |  |  |  |  |  |  |  |
Tax credits | (1.7) |  |  | (.6) |  |  |  |  |  |  |  |  |
Changes in unrecognized tax benefits | (.3) |  |  | (.1) |  |  |  |  |  |  |  |  |
Nontaxable or nondeductible items | 4.8 |  |  | 1.6 |  |  |  |  |  |  |  |  |
Other adjustments |  |  |  |  |  |  |  |  |  |  |
Release of stranded tax effects from AOCI (See Note M) | (5.8) |  |  | (2.0) |  |  |  |  |  |  |  |  |
Other | (1.2) |  |  | (.4) |  |  |  |  |  |  |  |  |
Effective tax rate | $ | 54.3 |  |  | 18.7 | % |  |  |  |  |  |  |  |
1 State taxes in California, Illinois, and Texas made up the majority (greater than 50%) of the tax effect in this category. Explanations of significant impacts to our 2025 effective tax rate presented are discussed below. •Our worldwide effective tax rate was favorably impacted by $13.0 due to beneficial tax impacts from the Aerospace Products Group divestiture discussed in Note S. As reflected in line items within the "Foreign tax effects" category of the rate reconciliation table, both France and the United Kingdom provide substantial shareholding exemptions from corporation tax resulting in a total $27.0 favorable impact. In addition, the "State and local income taxes, net of federal income tax effect" category includes a $.4 favorable impact. Offsetting tax consequences of the Aerospace transaction include the following: within the "Foreign tax effects" category, the Canadian withholding taxes line item includes $8.3, while both France and the United Kingdom include "Other" impacts of $2.0 and $2.1, respectively; and the "Effect of cross-border tax laws" includes a $2.0 estimated tax impact in the 'net' GILTI line. •On July 4, 2025, President Trump signed Public Law 119-21 (also known as the “One Big Beautiful Bill”), which includes changes to the U.S. corporate income tax system, such as modifications to the limitation on interest deductibility, the reinstatement of 100% bonus depreciation, and the allowable immediate expensing of qualifying research and experimentation expenses. Specifically, we recorded $1.6 tax expense in the “Effect of changes in tax laws or rates enacted in current period” category related to unintended consequences of the bill to our ‘net’ effect of cross-border tax laws. In addition, $.7 tax expense is included within the “State and local income taxes, net of federal income tax effect” category related to the consequential impacts to changes in valuation allowances of our state deferred tax assets. •Our rate was favorably impacted by $5.8 related to the release of stranded tax effects from “Accumulated other comprehensive loss” (AOCI) shown on our Consolidated Balance Sheets due to the non-cash settlement charges associated with the termination and liquidation of one of our domestic defined benefit pension plans discussed in Note M. Prior to the plan termination, AOCI included stranded tax effects primarily due to the adoption of the Tax Cuts and Jobs Act in 2017. We elected not to reclassify these stranded tax effects under ASU 2018-02 – Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” Upon plan termination, these stranded tax effects were required to be released into income tax expense under GAAP. For years ended December 31, 2024 a nd 2023, a reconciliation of the provision for "Income taxes" as a percentage of "Earnings (loss) before income taxes" differs from the statutory federal income tax rate before the adoption of ASU 2023-09 as follows:
|  |  | Year Ended December 31,
|  |  | 2024 |  | 2023
Statutory federal income tax rate |  |  | 21.0 | % |  | 21.0 | %
Increases (decreases) in rate resulting from: |  |  |  |  |
State taxes, net of federal benefit |  |  | .1 |  |  | .2 |
Tax effect of foreign operations |  |  | .8 |  |  | (1.4) |
Global intangible low-taxed income |  |  | (.4) |  |  | (1.5) |
Current and deferred foreign withholding taxes |  |  | (1.9) |  |  | (7.3) |
Goodwill and long-lived asset impairments |  |  | (19.5) |  |  | 5.4 |
Stock-based compensation |  |  | (.2) |  |  | .1 |
Change in valuation allowance |  |  | (1.3) |  |  | (.4) |
Change in uncertain tax positions, net |  |  | (.1) |  |  | (.3) |
Other permanent differences, net |  |  | 1.1 |  |  | 3.9 |
Other, net |  |  | — |  |  | 1.4 |
Effective tax rate |  |  | (.4 | %) |  | 21.1 | %
Dollar amounts for significant items for the years presented are discussed below. For all periods presented, the tax rate benefited from income earned in various foreign jurisdictions at rates lower than the U.S. federal statutory rate, primarily in China and Cyprus. In 2023, the rate associated with foreign operations was also adversely impacted by changes in estimates related to tax filings and a reduction to a contingent purchase price liability. In 2024, our rate was adversely impacted by $99.3 primarily due to non-deductible tax effects from goodwill impairment charges, but benefited by $9.4 in 2023 from deductible tax effects of other long-lived asset impairment charges, both of which are discussed in Note F. We also recognized tax expense related to foreign withholding taxes of $9.7 and $12.7, and other net tax (benefits) expenses of $(.8) and $(5.9) for the years ended December 31, 2024 and 2023, respectively. In 2024, our rate was also adversely impacted by $4.8 due to a change in valuation allowance related to a 2022 acquisition in our Specialized Products segment. We file tax returns in each jurisdiction where we are required to do s o. In these jurisdictions, a statute of limitations period exists. After a statute period expires, the tax authorities can no longer assess additional income tax for the expired period. In addition, once the statute expires we are no longer eligible to file claims for refund for any tax that we may have overpaid. Unrecognized Tax Benefits The total amount of our gross unrecognized tax benefits including interest and penalties at December 31, 2025, 2024, and 2023 was $9.0 (of which $1.1 would impact our effective tax rate, if recognized), $8.0, and $5.0, respectively.
We recognize interest and penalties related to unrecognized tax benefits as part of income tax expense in the Consolidated Statements of Operations, which is consistent with prior reporting periods. We are currently in various stages of audit or review by certain governmental tax authorities including the United States, Canada, and China. We have established liabilities for unrecognized tax benefits as appropriate, with such amounts representing a reasonable provision for taxes we ultimately might be required to pay. However, these liabilities could be adjusted over time as more information becomes known and management continues to evaluate the progress of these examinations. In January 2026, we were notified by a tax bureau in China of their intent to assess tax for 2021-2024 pertaining to our beneficial owner status with respect to prior dividend payments. Although the outcome is uncertain, we believe we have valid defenses and intend to rigorously contest the assessment initiated by the China authorities and have not recorded any impact associated with this matter. We are not subject to significant U.S. federal tax examinations for years prior to 2022, or significant U.S. state or foreign income tax examinations for years prior to 2016. It is reasonably possible that the resolution of certain tax audits could reduce our unrecognized tax benefits within the next 12 months, as certain tax positions may either be sustained on audit or we may agree to certain adjustments, or resulting from the expiration of statutes of limitations in various jurisdictions. The amount of unrecognized tax benefits is not expected to change significantly in the next 12 months. Deferred Income Taxes Deferred income taxes are provided for the temporary differences between the financial reporting basis and the tax basis of our assets and liabilities. The major temporary differences and their associated deferred tax assets or liabilities are as follows:
| December 31,
| 2025 |  | 2024
| Assets |  | Liabilities |  | Assets |  | Liabilities
Property, plant and equipment | $ | 12.6 |  |  | $ | (71.2) |  |  | $ | 13.7 |  |  | $ | (76.2) |
Inventories | 4.8 |  |  | (.8) |  |  | 5.8 |  |  | (.7) |
Accrued expenses | 52.6 |  |  | (1.4) |  |  | 51.1 |  |  | (.3) |
Net operating losses and other tax carryforwards | 56.8 |  |  | — |  |  | 56.2 |  |  | — |
Pension cost and other post-retirement benefits | 3.3 |  |  | (2.6) |  |  | 3.8 |  |  | (.9) |
Intangible assets | 14.3 |  |  | (61.3) |  |  | 10.8 |  |  | (69.1) |
Derivative financial instruments | — |  |  | (3.5) |  |  | .9 |  |  | (4.0) |
Capitalized research and experimentation expenses | 14.7 |  |  | — |  |  | 12.5 |  |  | — |
Tax on undistributed earnings (primarily from Canada and China) | — |  |  | (28.7) |  |  | — |  |  | (18.6) |
Uncertain tax positions | 4.1 |  |  | — |  |  | 3.3 |  |  | — |
Other | 11.0 |  |  | (9.5) |  |  | 9.9 |  |  | (8.3) |
Gross deferred tax assets (liabilities) | 174.2 |  |  | (179.0) |  |  | 168.0 |  |  | (178.1) |
Valuation allowance | (21.0) |  |  | — |  |  | (20.5) |  |  | — |
Total deferred taxes | $ | 153.2 |  |  | $ | (179.0) |  |  | $ | 147.5 |  |  | $ | (178.1) |
Net deferred tax liability |  |  | $ | (25.8) |  |  |  |  | $ | (30.6) |
Deferred tax assets (liabilities) included in the Consolidated Balance Sheets are as follows:
| December 31,
| 2025 |  | 2024
Other noncurrent assets | $ | 27.1 |  |  | $ | 18.3 |
Deferred income taxes | (52.9) |  |  | (48.9) |
Net deferred tax liability | $ | (25.8) |  |  | $ | (30.6) |
The valuation allowance recorded primarily relates to net operating loss, tax credit, and capital loss carryforwards for which utilization is uncertain. Cumulative tax losses in certain state and foreign jurisdictions during recent years, limited carryforward periods in certain jurisdictions, future reversals of existing taxable temporary differences, and reasonable tax planning strategies were among the factors considered in determining the valuation allowance. Individually, none of these tax carryforwards presents a material exposure. Most of our tax carryforwards have expiration dates that vary generally over the next 20 years, with no amount greater than $10.0 expiring in any one year. Deferred withholding taxes (tax on undistributed earnings) have been provided on the earnings of our foreign subsidiaries to the extent it is anticipated that the earnings will be remitted in the future as dividends. We are not asserting permanent reinvestment on $629.7 of our earnings and have accrued tax on these undistributed earnings as presented in the table above. Foreign withholding taxes have not been provided on certain foreign earnings which are indefinitely reinvested outside the United States. The cumulative undistributed earnings which are indefinitely reinvested as of December 31, 2025, are $333.1. If such earnings were repatriated to the United States through dividends, the resulting incremental tax expense would approximate $20.1, based on present income tax laws. Income Taxes Paid, Net of Refunds Received The following table presents cash paid for income taxes, net of refunds received, by jurisdiction as follows:
| Year Ended December 31,
| 2025 |  |  |  |
Federal | $ | 28.8 |  |  |  |  |
State and local | 2.9 |  |  |  |  |
Foreign: |  |  |  |  |
Canada | 14.8 |  |  |  |  |
China | 21.0 |  |  |  |  |
All other foreign jurisdictions | 19.7 |  |  |  |  |
Total foreign | 55.5 |  |  |  |  |
Total income taxes paid, net of refunds received | $ | 87.2 |  |  |  |  |
Cash paid for income taxes for the years ended December 31, 2024 and 2023 was $82.4 and $98.8, respectively.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income tax. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 942 -SubTopic 740 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477617/942-740-50-1 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org/1943274/2147480738/235-10-S50-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 944 -SubTopic 740 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478822/944-740-50-1 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12 Reference 5: http://www.xbrl.org/2003/role/exampleRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 231 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482663/740-10-55-231 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12C -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12C Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12B -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12B Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org/1943274/2147477891/740-270-50-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB Topic 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479360/740-10-S99-1 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org/1943274/2147480990/946-20-50-13 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480678/235-10-S99-1 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/740/tableOfContent Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-14 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-21 Reference 15: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-17 Reference 16: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479360/740-10-S99-2 Reference 17: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482603/740-30-50-2 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration