v3.25.4
Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes INCOME TAXES
We are subject to federal income tax in the U.S., Canada, and various other jurisdictions., as well as income tax within multiple U.S. state jurisdictions. We provide for income taxes based on the enacted tax laws and rates in the jurisdictions in which we conduct our operations. These jurisdictions may have regimes of taxation that vary with respect to nominal rates and with respect to the basis on which these rates are applied. This variation, along with the changes in our mix of income within these jurisdictions, can contribute to shifts in our effective tax rate from period to period.
We are currently under audit by various state and international authorities. We do not have any returns under examination for years prior to 2020.
Certain jurisdictions now implement the Organization for Economic Cooperation and Development's (OECD) Pillar Two rules regarding a global minimum tax. As of December 31, 2025, these new rules have not impacted our provision for income taxes.
We apply the provisions of FASB Topic Income Taxes regarding the treatment of uncertain tax positions. A reconciliation of unrecognized tax benefits (exclusive of interest and federal and state benefits) is as follows:
Year Ended December 31,
20252024
(In thousands)
Balance at beginning of period (1)
$21,148 $— 
Increases based on tax positions taken in the current year1,920 2,121 
Increases based on tax positions taken in prior years— 19,027 
Decreases based on tax positions taken in prior years(8,005)— 
Decreases due to settlements with tax authorities— — 
Decreases due to lapse of applicable statute of limitation— — 
Other, net— — 
Balance at end of period$15,063 $21,148 
The unrecognized tax benefits balance of $15.1 million at December 31, 2025 would reduce our effective tax rate if recognized.
Deferred income taxes reflect the net tax effects of temporary differences between the financial and tax bases of assets and liabilities. Significant components of deferred tax assets and liabilities as of December 31, 2025 and 2024 were as follows:
 December 31,
 20252024
 (In thousands)
Deferred tax assets:
Pension liability$16,616 $17,359 
Accrued warranty expense1,829 1,570 
Capitalized Section 174 expenditures57,870 64,775 
Accrued vacation pay2,721 2,434 
Accrued liabilities for executive and employee incentive compensation22,834 18,736 
Environmental and products liabilities21,220 20,945 
Lease liabilities5,136 5,055 
Investments in joint ventures and affiliated companies3,065 2,746 
Convertible debt premium34,275 — 
U.S. federal tax credits and loss carryforward3,399 3,071 
U.S. state tax credits and loss carryforward11,545 10,119 
Foreign tax credit and loss carryforward19,820 23,394 
Other1,145 1,692 
Gross deferred tax assets201,475 171,896 
Valuation allowance for deferred tax assets(14,939)(17,039)
Total deferred tax assets186,536 154,857 
Deferred tax liabilities:
Property, plant and equipment105,046 88,090 
Long-term contracts24,937 54,714 
Right-of-use lease assets10,947 10,590 
Accrued liabilities for self-insurance (including postretirement health care benefits)502 826 
Intangibles58,033 19,589 
Total deferred tax liabilities199,465 173,809 
Net deferred tax liabilities$(12,929)$(18,952)
The components of Income before Provision for Income Taxes were as follows:
 Year Ended December 31,
 202520242023
 (In thousands)
U.S.$295,117 $301,018 $282,459 
Other than U.S.103,003 47,702 38,941 
Income before Provision for Income Taxes$398,120 $348,720 $321,400 
The components of Provision for Income Taxes were as follows:
 Year Ended December 31,
 202520242023
 (In thousands)
Current:
U.S. – federal$40,026 $36,553 $69,254 
U.S. – state and local2,683 2,005 4,255 
Other than U.S.10,408 8,019 6,698 
Total current53,117 46,577 80,207 
Deferred:
U.S. – federal8,789 15,439 (8,968)
U.S. – state and local(122)2,648 (376)
Other than U.S.6,475 1,758 4,216 
Total deferred15,142 19,845 (5,128)
Provision for Income Taxes$68,259 $66,422 $75,079 
The following is a reconciliation of our income tax provision from the U.S. statutory federal tax rate to our consolidated effective tax rate for the year ended December 31, 2025, updated to reflect the adoption of ASU 2023-09:
 Year Ended December 31,
 2025
 (In thousands)
Income before provision for income taxes$398,120 
U.S. federal statutory tax rate83,605 21.0 %
State and local income taxes, net of Federal income tax effects (1)
2,561 0.6 %
Foreign tax effects
Canada - capital loss realization(3,654)(0.9)%
Other(943)(0.2)%
Effect of changes in tax laws or rates enacted in the current period— — %
Effect of cross-border tax laws2,574 0.6 %
Tax credits
U.S. research and development tax credit(5,761)(1.4)%
Nontaxable or nondeductible items(1,051)(0.3)%
Changes in unrecognized tax benefits(7,934)(2.0)%
Other adjustments(1,138)(0.3)%
Effective tax rate$68,259 17.1 %
(1)State taxes in Virginia, Tennessee, Ohio, California and New Mexico made up greater than 50% of the tax effect in this category.
The following is a reconciliation of our income tax provision from the U.S. statutory federal tax rate to our consolidated effective tax rate as previously disclosed for the years ended December 31, 2024 and 2023, prior to the adoption of ASU 2023-09:
 Year Ended December 31,
 20242023
U.S. federal statutory tax rate21.0 %21.0 %
State and local income taxes1.3 %1.2 %
Research and development tax credit(4.0)%— %
Excess tax deductions on equity compensation(0.5)%(0.3)%
Other, net1.2 %1.5 %
Effective tax rate19.0 %23.4 %
The effective tax rate benefit related to research and development tax credits is presented net of reserves for uncertain tax positions and includes credits corresponding to current year activities, as well as credits corresponding to activities in the prior reporting period.
The amounts of cash taxes paid by the Company are as follows:
Year Ended December 31,2025
U.S. – federal$30,359 
U.S. – state3,805 
Canada13,618 
Other110 
Income taxes, net of amounts refunded$47,892 
At December 31, 2025, we had a valuation allowance of $14.9 million for deferred tax assets, which we expect cannot be realized through carrybacks, future reversals of existing taxable temporary differences and our estimate of future taxable income. We believe that our remaining deferred tax assets are more likely than not realizable through carrybacks, future reversals of existing taxable temporary differences, our estimate of future taxable income and potential tax planning. Any changes to our estimated valuation allowance could be material to our consolidated financial statements.
The following is an analysis of our valuation allowance for deferred tax assets:
Beginning
Balance		Charges To
Costs and
Expenses		Charged To
Other
Accounts		Ending
Balance
 (In thousands)
Year Ended December 31, 2025$(17,039)$5,498 $(3,398)$(14,939)
Year Ended December 31, 2024$(17,421)$382 $— $(17,039)
Year Ended December 31, 2023$(13,022)$(4,399)$— $(17,421)
We have federal net operating losses of $3.4 million available to offset future taxable income. The federal net operating losses have an indefinite carryforward period. We are carrying a full valuation allowance of $3.4 million against the deferred tax asset related to these federal net operating loss carryforwards.
We have state credits and state net operating losses of $14.6 million ($11.5 million net of federal tax benefit) available to offset future taxable income in various states. These state net operating loss carryforwards begin to expire in 2026. We are carrying a full valuation allowance of $14.6 million ($11.5 million net of federal tax benefit) against the deferred tax asset related to the state credits and state loss carryforwards.
We would be subject to withholding taxes if we were to distribute earnings from certain foreign subsidiaries. All of our foreign earnings are considered indefinitely reinvested. Determination of the amount of unrecognized deferred taxes related to these undistributed earnings is not practicable.