Annual report [Section 13 and 15(d), not S-K Item 405]

INCOME TAXES (Tables)

v3.25.4
INCOME TAXES (Tables)
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Provision from (benefit for) Income Taxes
The provision for income taxes consisted of the following:
  
  Twelve Months Ended December 31,
  2025 2024 2023
  (In millions)
Current:      
Federal $ 94.3  $ 169.9  $ 155.5 
State 37.1  38.3  24.2 
Foreign 69.0  61.9  56.7 
  200.4  270.1  236.4 
Deferred:      
Federal 36.3  (47.7) (50.2)
State 0.9  (0.3) 12.4 
Foreign (7.0) (18.9) (32.4)
  30.2  (66.9) (70.2)
Provision for income taxes $ 230.6  $ 203.2  $ 166.2 
Domestic and Foreign Income before Income Taxes
The components of consolidated income before income taxes were as follows:
  Twelve Months Ended December 31,
  2025 2024 2023
  (In millions)
U.S. $ 732.9  $ 651.9  $ 573.2 
Foreign 162.0  158.6  144.7 
Consolidated income before income taxes
 $ 894.9  $ 810.5  $ 717.9 
Provision for Income Taxes Reconciles with U.S. Federal Statutory Rate A reconciliation of the U.S. federal statutory income tax rate to our effective income tax rate pursuant to the disclosure requirements of ASU 2023-09 for the year ended December 31, 2025 is as follows:
  Twelve Months Ended December 31,
  2025
Amount %
(In millions)
U.S. federal statutory income tax rate
 $ 187.9  21.0  %
State and local income taxes, net of federal income tax effect (1)
30.8  3.4  %
Foreign tax effects
 28.0  3.1  %
Effect of cross-border tax laws
 (7.7) (0.9) %
Tax credits
Research and development tax credits
 (19.2) (2.1) %
Other (0.1) —  %
Non-taxable or non-deductible items
Excess officer's compensation
 11.2  1.3  %
Other 1.0  0.2  %
Changes in unrecognized tax benefits
 (1.3) (0.2) %
Effective income tax rate
 $ 230.6  25.8  %
(1) The states that contribute to the majority of the tax effect in this category are California, Maryland, Tennessee, New York, Pennsylvania, Illinois and Connecticut.

A reconciliation of the U.S. federal statutory income tax rate to our effective income tax rate for the years ended December 31, 2024 and 2023 is as follows:

  Twelve Months Ended December 31,
  2024 2023
  (In millions)
Federal statutory rate 21.0  % 21.0  %
Provision computed at federal statutory rate $ 170.2  $ 150.8 
State and local taxes, net of federal tax benefit 30.1  30.0 
Foreign differential 27.1  20.5 
Federal research & development credit (17.6) (24.2)
Equity compensation (8.2) (3.2)
Tax reserves (5.7) 5.8 
Reversal of BVS deferred tax liability —  (27.3)
Excess officer’s compensation 9.2  8.4 
Valuation allowance (7.2) 1.9 
Other 5.3  3.5 
Provision for income taxes $ 203.2  $ 166.2 
Effective income tax rate 25.1  % 23.2  %
Summary of Income Taxes Paid
Cash paid for income taxes, net of refunds received, by jurisdiction pursuant to the disclosure requirements of ASU 2023-09 for the year ended December 31, 2025 is as follows:

  Twelve Months Ended December 31,
2025
(In millions)
Federal
 $ 97.2 
State
 34.8 
Foreign
Canada 24.9 
Other
 40.8 
Cash paid for income taxes, net of refunds received
 $ 197.7 
Other information related to our operating leases was as follows:
Twelve Months Ended December 31, 2025 Amount
(in millions, except lease term and discount rate)
Supplemental Cash Flows Information
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used by operating leases $ 38.5
Right-of-use assets obtained in exchange for lease obligations (non-cash):
Operating leases $ 24.6
Weighted Average Remaining Lease Term 5.7
Weighted Average Discount Rate 5.0  %
Components of Deferred Income Tax Assets and Liabilities
Our deferred income tax assets (liabilities) are as follows:
  December 31,
  2025 2024
  (In millions)
Deferred income tax assets:  
Net operating and capital loss carryforwards $ 85.0  $ 83.9 
Goodwill and intangible assets 114.5  106.2 
Employee compensation programs 99.9  71.2 
Foreign tax credits 8.1  17.2 
Employee pension benefits 26.6  27.7 
Reserves and accrued expenses 9.2  8.1 
Accrued legal expense 21.5  8.6 
Research and development costs 30.5  27.2 
Operating lease asset 30.1  29.8 
Other 23.1  30.8 
Gross deferred income tax assets 448.5  410.7 
Valuation allowance (175.4) (170.8)
Total deferred income tax assets, net 273.1  239.9 
Deferred income tax liabilities:  
Goodwill and intangible assets (539.1) (471.1)
Undistributed earnings of foreign subsidiaries (9.2) (8.3)
Depreciation (26.9) (27.4)
Operating lease liability (30.1) (29.8)
Prepaid expenses (16.3) (16.0)
Other (3.2) (5.1)
Total deferred income tax liability (624.8) (557.7)
Net deferred income tax liability $ (351.7) $ (317.8)
Deferred Income Tax Assets, Included in Other Current Assets, and Liabilities
Our deferred income tax assets and deferred income tax liabilities are included in the accompanying Consolidated Balance Sheets as follows:
  December 31,
  2025 2024
  (In millions)
Long-term deferred income tax assets, included in other assets $ 39.1  $ 33.8 
Long-term deferred income tax liabilities (390.8) (351.6)
Net deferred income tax liability $ (351.7) $ (317.8)
Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
  2025 2024
  (In millions)
Beginning balance (January 1) $ 44.7  $ 55.5 
Increases related to prior year tax positions 3.3  1.7 
Decreases related to prior year tax positions (2.9) (0.7)
Increases related to current year tax positions 8.0  8.5 
Decreases related to settlements (3.3) — 
Expiration of the statute of limitations for the assessment of taxes (10.7) (20.1)
Currency translation adjustment 0.1  (0.2)
Ending balance (December 31) $ 39.2  $ 44.7