v3.25.4
Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The components of income (loss) before income taxes and provision (benefit) for income taxes for the years ended December 31 are as follows:
 202520242023
Income (loss) before income taxes   
U.S.$(42.3)$184.9 $114.1 
Non-U.S.(0.6)34.1 66.9 
Total$(42.9)$219.0 $181.0 
Income tax provision 
Current tax provision:
Federal$0.2 $52.9 $32.0 
State0.9 12.9 8.0 
Non-U.S.15.5 17.2 14.0 
Total current$16.6 $83.0 $54.0 
Deferred tax provision (benefit): 
Federal$(0.4)$0.3 $0.6 
State— (0.1)— 
Non-U.S.(1.1)(8.4)(1.7)
Total deferred$(1.5)$(8.2)$(1.1)
Total$15.1 $74.8 $52.9 
Upon adoption of ASU 2023-09, Improvements to Income Tax disclosures, as described in Note 2, Significant Accounting Policies, the company’s income tax payments, net of refunds received, during the year ended December 31, 2025 were as follows:
 2025
Federal$15.8 
State3.1 
Non-U.S.
Netherlands7.9 
Italy 3.0 
China 3.0 
Other countries4.0 
Total$36.8 
The Company made income tax payments, net of refunds, of $85.6 million and $52.9 million during 2024 and 2023, respectively.
Upon adoption of ASU 2023-09, Improvements to Income Tax Disclosures, as described in Note 2, Summary of Significant Accounting Policies, a reconciliation of the U.S. federal statutory rate to the reported income tax rate for the year ended December 31, 2025, is as follows:
2025
 AmountPercent
U.S. Federal Statutory Rate Taxes$(9.0)21.0 %
State & Local Income Taxes, Net of Federal Income Tax Effect (a)0.7 (1.6)%
Foreign Tax Effects
Brazil
Valuation allowance 3.0 (7.0)%
Other(0.2)0.5 %
China
  Valuation allowance 1.3 (3.0)%
  Other1.1 (2.6)%
United Kingdom
Tax Rate Differential(1.4)3.3 %
Valuation Allowance9.4 (21.9)%
Other (0.1)0.2 %
Other Foreign Jurisdictions 1.8 (4.2)%
Effect of Cross Border Tax Laws0.3 (0.7)%
Tax Credits
Research and Development Tax Credit(3.4)7.9 %
Other0.1 (0.2)%
Changes in Valuation Allowance11.1 (25.9)%
Nontaxable or Nondeductible Items
Nondeductible Compensation1.8 (4.2)%
Equity Earnings(1.6)3.7 %
Other0.2 (0.5)%
Changes in Unrecognized Tax Benefits 0.2 (0.5)%
Other Adjustments (0.2)0.5 %
Effective Tax Rate (b)$15.1 (35.2)%
(a) State taxes in Texas and Pennsylvania made up the majority (greater than 50%) of the tax effect in this category.
(b) In applying the income tax rate reconciliation disclosure requirements, management evaluated reconciling items using both quantitative and qualitative materiality considerations. Certain reconciling items that exceeded quantitative thresholds have been aggregated where separate presentation would not enhance an understanding of the Company’s income tax provision or effective tax rate.
A reconciliation of the U.S. federal statutory rate to the reported income tax rate for the year ended December 31, 2024 and 2023, in accordance with the guidance prior to the adoption of ASU 2023-09 is as follows:
 20242023
Income (loss) before income taxes$219.0 $181.0 
Statutory taxes at 21%
$46.0 $38.0 
Valuation allowance19.9 12.1 
State income taxes6.1 5.8 
Non -U.S rate differences5.6 3.2 
Nondeductible compensation4.2 4.2 
Global intangible low-taxed income3.0 1.7 
Other0.9 (0.3)
Base-erosion and anti-abuse tax— (0.1)
Foreign derived intangible income(6.0)(3.4)
Federal income tax credits(3.4)(4.0)
Tax controversy resolution(1.1)(3.0)
Equity interest earnings(0.4)(1.3)
Income tax provision$74.8 $52.9 
Reported income tax rate34.2 %29.2 %
The Company has determined that it is impracticable to calculate the amount of deferred taxes that would be applicable to all of its investments in non-U.S. subsidiaries. However, the Company has provided for anticipated taxes on unremitted non-U.S. earnings for which no reinvestment plan has been identified and that may be repatriated in the foreseeable future.
The Company has elected to account for the global intangible low-taxed income ("GILTI") tax in the period in which it is incurred, and therefore has not provided any deferred tax amounts for GILTI.
On July 4, 2025, the President of the United States signed the One Big Beautiful Bill Act (the “OBBBA”) into law. The OBBBA includes provisions effective in 2025 that restore immediate expensing for domestic research and development costs, allow 100% bonus depreciation for qualifying property, and modify the limitation on the deductibility of business interest expense. The Company reflected the effects of these changes in its income tax provision for the year ended December 31, 2025.
The requirement to capitalize and amortize foreign research and development expenditures over fifteen years was not modified by the OBBBA. This continued requirement has had and will continue to have a material impact on the Company's future cash payments for income taxes but decreasingly over time.
A detailed summary of the total deferred tax assets and liabilities in the Consolidated Balance Sheets resulting from differences in the book and tax basis of assets and liabilities is as follows:
 December 31
 20252024
Deferred tax assets  
Research and development capitalization$76.3 $78.5 
Tax attribute carryforwards59.1 33.1 
Product warranties15.4 16.5 
Accrued expenses and reserves12.9 16.3 
Accrued product liability10.0 9.2 
Inventories5.1 3.0 
Other8.9 12.1 
Total deferred tax assets187.7 168.7 
Less: Valuation allowance165.9 144.3 
 21.8 24.4 
 December 31
 20252024
Deferred tax liabilities 
Depreciation and amortization17.5 20.5 
Accrued pension benefits4.2 3.8 
Unremitted earnings1.5 1.8 
Total deferred tax liabilities23.2 26.1 
Net deferred tax asset (liability)$(1.4)$(1.7)
The following table summarizes the tax carryforwards and associated carryforward periods and related valuation allowances where the Company has determined that realization is uncertain:
 December 31, 2025
 Net deferred tax
asset		Valuation
allowance		Carryforwards
expire during:
Non-U.S. net operating loss$34.7 $29.3 
2026-Indefinite
U.S. net operating loss10.3 10.3 Indefinite
Non-U.S. capital losses8.0 8.0 Indefinite
State net operating losses and credits5.3 5.1 
2026-Indefinite
Research and development credit0.3 0.3 Indefinite
Disallowed interest and other 1.8 1.8 2030-Indefinite
Less: Unrecognized tax benefits(1.3)— 
Total$59.1 $54.8 
 December 31, 2024
 Net deferred tax
asset		Valuation
allowance		Carryforwards
expire during:
Non-U.S. net operating loss$23.1 $18.7 2025 - Indefinite
Non-U.S. capital losses7.3 7.3 Indefinite
State net operating losses and credits3.7 3.6 2025 - Indefinite
Less: Unrecognized tax benefits(1.0)— 
Total$33.1 $29.6 
The Company continually evaluates its deferred tax assets to determine if a valuation allowance is required. A valuation allowance is required where realization is determined to no longer meet the "more likely than not" standard. The establishment of a valuation allowance does not have an impact on cash, nor does such an allowance preclude the Company from using its loss carryforwards or other deferred tax assets in future periods. The tax net operating losses attributable to Brazil, China and the United Kingdom ("U.K.") comprise a substantial portion of the non-U.S. net operating loss deferred tax assets. The Brazilian and U.K. net operating losses do not expire under local law, while Chinese losses expire after five years.

During 2024, the Company assessed the realizability of its deferred tax assets in Brazil and concluded that a portion met the more likely than not threshold for realization. This conclusion was based on the anticipated reversal of deferred temporary differences, historical and forecasted operating results, and projections of future taxable income over the Company’s forecast period. As result, the Company recognized a tax benefit of $4.3 million in 2024 related to a partial release of the valuation allowance previously recorded against Brazilian deferred tax assets.

In 2025, the Company’s Brazilian operations generated an operating loss resulting in the creation of additional deferred tax assets. Based on updated projections of future taxable income and the expected utilization of net operating losses, the Company determined that these incremental deferred tax assets did not meet the more likely than not realization threshold. Accordingly, the Company recorded an additional valuation allowance of $3.0 million in 2025, which primarily relates to the current‑year operating loss and net operating losses not expected to be realized within the forecast period.
Starting in 2021, the Company determined that the evidence available no longer supported a more likely than not standard for realization of its U.S. and U.K deferred tax assets due to cumulative pretax losses, lack of available tax planning strategies and declining forecasts due to supply and logistics constraints. While both the U.S. and U.K operations generated positive earnings during 2024, the Company incurred operating losses in both jurisdictions during 2025. After considering historical earnings and
trends, recent operating performance, forecasted earnings, and the relevant expiration of carryforwards for both jurisdictions, the Company concluded the valuation allowances provided remain appropriate. Although the Company expects earnings over the longer term for its U.S. and U.K operations, it believes such longer-term forecasts are not sufficient evidence to support the future realization of the deferred tax assets. Accordingly, as of December 31, 2025, the Company has provided a valuation allowance of $124.5 million and $16.3 million against the deferred tax assets of the U.S. and U.K., respectively.
During 2025 and 2024, the valuation allowance provided against deferred tax assets increased by $21.6 million and $17.7 million, respectively. The change in the total valuation allowance in 2025 and 2024 included a net increase in tax expense of $24.6 million and $19.9 million, respectively, and a net decrease of $3.0 million and $2.2 million in 2025 and 2024, respectively, recorded directly in equity.
As of December 31, 2025, the Company had gross net operating loss carryforwards in the U.S. of $48.9 million, U.S. state jurisdictions of $32.3 million and non-U.S. jurisdictions of $131.8 million.
The following is a reconciliation of total gross unrecognized tax benefits, defined as the aggregate tax effect of differences between the Company's tax return positions and the benefits recognized in the Consolidated Financial Statements for the years ended December 31, 2025, 2024 and 2023. Approximately $4.1 million, $3.1 million and $3.8 million of these amounts as of December 31, 2025, 2024 and 2023, respectively, relate to permanent items that, if recognized, would impact the reported income tax rate.
 202520242023
Balance at January 1$3.1 $3.8 $5.4 
Additions (reductions) for business acquisitions0.8 — — 
Additions based on tax positions related to the current year0.4 0.3 0.4 
Additions (reductions) for tax positions of prior years(0.1)(0.2)(0.1)
Reductions due to settlements with taxing authorities and the lapse of the applicable statute of limitations(0.2)(0.7)(1.9)
Other changes in unrecognized tax benefits including foreign currency translation adjustments0.1 (0.1)— 
Balance at December 31$4.1 $3.1 $3.8 
The Company records interest and penalties on uncertain tax positions as a component of the income tax provision. The Company recorded a net increase of $0.1 million during 2025 and net decrease of $0.5 million and $1.4 million during 2024 and 2023, respectively, in interest and penalties. In addition, during 2025, the balance of accrued interest and penalty was increased for uncertain tax positions related to a business acquisition by $1.0 million. There was no foreign currency translation impact in 2025, 2024 or 2023. The total amount of interest and penalties accrued was $1.5 million, $0.4 million and $0.9 million as of December 31, 2025, 2024 and 2023, respectively.

The unrecognized tax benefits as well as associated penalties and interest resulting from the business acquisition are subject to an indemnification agreement. As such, any related amount paid pursuant to an income tax examination of the acquired entity is expected to be recovered via collection of the indemnification asset, resulting in recognition within the Consolidated Statements of Operations. The amounts recorded for unrecognized tax benefits are provisional and represent the Company’s preliminary assessment of uncertain tax positions of the acquired entity based on information available as of the acquisition date. The Company continues to evaluate acquisition-date facts and circumstances, and the related assessment is expected to be completed during the second quarter of 2026. Any measurement-period adjustments identified may impact the final purchase price allocation.
The tax returns of the Company and its non-U.S. subsidiaries are routinely examined by various taxing authorities. The Company has not been informed of any material assessment for which an accrual has not been previously provided. In addition, in certain circumstances where the Company is contesting an assessment and believes it has a strong probability of success, no accrual has been provided. The Company would vigorously contest any material assessment. Management believes any potential adjustment would not materially affect the Company's financial condition or results of operations.
In general, the Company operates in taxing jurisdictions that provide a statute of limitations period ranging from three to five years for the taxing authorities to review the applicable tax filings. The examination of U.S. federal tax returns for all years prior to 2022 have been settled with the Internal Revenue Service or otherwise have essentially closed under the applicable statute of limitations. The Company is routinely under examination in various state and non-U.S. jurisdictions and in most cases the statute of limitations has not been extended. The Company believes these examinations are routine in nature and are not expected to result in any material tax assessments.