v3.26.1
Income Tax Expense
 12 Months Ended
Mar. 31, 2026
Income Tax Disclosure [Abstract]  
Income Tax Expense (Benefit)
10. INCOME TAXES
We present a reconciliation of the effective global income tax rate from the Irish national trading rate, our country of domicile. The total provision for income taxes for the year ended March 31, 2026 can be reconciled to the tax computed at the Ireland statutory trading income tax rate, presented in accordance with the requirements of newly adopted ASU 2023-09, as follows:
Year Ended March 31, 2026
(dollars in millions)AmountPercentage
Tax at national statutory rate$130.9 12.5 %
National nontaxable, nondeductible items(0.1)— %
National cross-border laws7.3 0.7 %
National other3.1 0.3 %
Foreign tax effects, U.S.
Statutory rate differential62.9 6.0 %
Federal credits(6.1)(0.6)%
State and local taxes, net30.8 2.9 %
Equity based compensation(7.0)(0.7)%
Withholding taxes19.8 1.9 %
Foreign-derived deduction eligible income(8.5)(0.8)%
Other10.9 1.0 %
Foreign tax effects, U.K.
Statutory rate differential6.8 0.6 %
Other0.3 — %
Foreign tax effects, other jurisdictions12.2 1.2 %
Global changes in uncertain tax positions(1.6)(0.2)%
All other, net0.6 0.2 %
Total Provision for Income Taxes$262.2 25.0 %
The total provision for income taxes for the years ended March 31, 2025 and March 31, 2024 can be reconciled to the tax computed at the Ireland statutory tax rate, presented before adoption of ASU 2023-09, as follows:
Years Ended March 31,20252024
National statutory tax rate12.5 %12.5 %
Change in accruals for uncertain tax positions(0.1)%— %
U.S. state and local taxes, net of federal income tax expense (benefit)2.8 %2.2 %
Change in valuation allowances 0.7 %0.9 %
U.S. research and development credit(0.6)%(0.7)%
U.S. foreign income tax credit(0.7)%(0.9)%
Difference in non-Ireland tax rates9.9 %8.5 %
U.S. federal audit adjustments (0.3)%0.1 %
Excess tax benefit for equity compensation(0.8)%(0.7)%
Tax rate changes on deferred tax assets and liabilities— %(0.3)%
U.S. tax reform impact, GILTI and FDII
(0.3)%(0.2)%
All other, net0.1 %(0.1)%
Total Provision for Income Taxes23.2 %21.3 %
Our effective tax rate is affected by i) the tax rates in Ireland (our country of domicile), the United States, and other jurisdictions in which we operate, and ii) the relative amount of income before income taxes by geography. Income before income taxes by geography are based on the geographic location of our operations to which such earnings are attributable. Transactions between two or more of the entities within our group occur routinely and involve the sale of goods and services, loans and related interest, intellectual property and related royalties, and shared costs. The pricing used in these transactions is consistent with the prices that would be charged between unrelated parties in accordance with our interpretation of current tax regulations. Income before income taxes by geography includes the transfer of income before income taxes that results from these transactions.
We operate a global financing structure using a wholly-owned financing company domiciled in Ireland, FinCo, which has a material impact on the relative amount of income before income taxes by geography. In each of the years presented, FinCo contributed a significant majority of the pre-tax income of Ireland operations. Its activities are driven by funding needs for acquisitions, capital investments, and working capital. A significant majority of FinCo’s income before income taxes during the years presented was driven by loans to our operations in the United States in response to such funding needs.
Significant transactions not indicative of operating trends that impacted the amount of income before income taxes by geography and resulting provision for income tax and effective tax rate include:
•In fiscal 2026, there were no significant transactions of this nature.
•In fiscal 2025, income from continuing operations before income taxes, in the United States and Other locations, was impacted by $62.3 million of expenses associated with restructuring. This resulted in approximately $6.0 million of an increase to our valuation allowance in Other locations.
•In fiscal 2024, income from continuing operations before income taxes, in the United States and Other locations, was impacted by $44.4 million of expenses associated with restructuring. This resulted in approximately $2.6 million of an increase to our valuation allowance in Other locations.
Income from continuing operations before income taxes of our domestic and foreign operations based on the geographic locations of our operations was as follows:
(in millions)
Years Ended March 31,202620252024
United States operations$725.3 $559.5 $491.9 
Ireland operations56.7 62.5 51.5 
Other locations operations265.3 174.2 159.4 
$1,047.3 $796.2 $702.8 
The components of the provision for income taxes related to income from continuing operations consisted of the following:
(in millions)
Years Ended March 31,202620252024
Current:
United States federal$162.2 $145.2 $133.5 
United States state and local38.1 32.4 26.2 
Ireland17.6 12.9 7.6 
Other locations61.2 51.3 51.3 
279.1 241.7 218.7 
Deferred:
United States federal(8.3)(43.1)(43.5)
United States state and local0.9 (5.0)(11.2)
Ireland(0.2)(0.6)(0.9)
Other locations(9.3)(8.3)(13.5)
(16.9)(57.1)(69.1)
Total Provision for Income Taxes$262.2 $184.7 $149.5 
Unrecognized Tax Benefits.  We classify uncertain tax positions and related interest and penalties as long-term liabilities within “Other liabilities” in our accompanying Consolidated Balance Sheets, unless they are expected to be paid within 12 months, in which case, the uncertain tax positions would be classified as Current liabilities within the "Accrued income taxes" line in our accompanying Consolidated Balance Sheets. We recognize interest and penalties related to unrecognized tax benefits within the “Income tax expense” line in our accompanying Consolidated Statements of Income.
A reconciliation of the beginning and ending balances of the total amounts of unrecognized tax benefits is as follows:
(in millions)20262025
Unrecognized Tax Benefits Balance at April 1$1.8 $2.2 
Increases for tax provisions of current year— — 
Decreases for tax provisions of prior year(1.6)(0.3)
Unrecognized Tax Benefits Balance at March 31$0.2 $1.8 
We recognized interest and penalties related to uncertain tax positions in the provision for income taxes. As of March 31, 2026 and 2025, we had $0.1 million accrued for interest and penalties. If all unrecognized tax benefits were recognized, the net impact on the provision for income tax expense would be $0.2 million. The decrease in the balance of unrecognized tax benefits from prior year is due to the expiration of old positions.
We operate in numerous taxing jurisdictions and are subject to regular examinations by various United States federal, state and local, as well as foreign jurisdictions. We are no longer subject to United States federal examinations for years before fiscal 2018 and, with limited exceptions, we are no longer subject to United States state and local, or non-United States, income tax
examinations by tax authorities for years before fiscal 2018. We remain subject to tax authority audits in various jurisdictions wherever we do business.
In November 2023, we received two Notices of Deficiency from the IRS regarding the previously disclosed deemed dividend inclusions and associated withholding tax matter. The notices relate to the fiscal and calendar year 2018. The IRS adjustments would result in a cumulative tax liability of approximately $50.0 million, excluding any interest and penalties, if ultimately assessed. We are contesting the IRS’s assertions and have filed petitions with the U.S. Tax Court. We have not established reserves related to these notices. An unfavorable outcome is not expected to have a material adverse impact on our consolidated financial position but could be material to our consolidated results of operations and cash flows for any one period.
We estimate that the tax benefit from our Costa Rica Tax Holiday is $7.4 million (or $0.07 per fully diluted share), annually. The Tax Holiday runs fully exempt from income tax through 2031.
Deferred Taxes.  The significant components of the deferred tax assets and liabilities recorded in our accompanying balance sheets at March 31, 2026 and 2025 were as follows:
(in millions)
March 31,20262025
Deferred Tax Assets:
Post-retirement benefit accrual$1.3 $1.4 
Compensation34.5 29.7 
Net operating loss carryforwards25.7 35.5 
Accrued expenses13.3 13.8 
Insurance2.2 2.1 
Illinois EO Litigation Settlement11.0 12.0 
Deferred income24.3 24.1 
Bad debt & other allowances4.7 3.8 
Research & experimental expenditures47.5 40.5 
Operating leases (1)
36.1 37.6 
Foreign tax credit carryforwards10.3 8.1 
Other17.4 16.0 
Deferred Tax Assets228.3 224.6 
Less: Valuation allowance29.0 30.6 
Total Deferred Tax Assets199.3 194.0 
Deferred Tax Liabilities:
Depreciation and depletion116.8 97.0 
Operating leases (1)
35.4 36.6 
Intangibles418.1 441.0 
Pension3.8 3.8 
Other3.0 2.6 
Total Deferred Tax Liabilities577.1 581.0 
Net Deferred Tax Liabilities(2)
$(377.8)$(386.9)
            
(1) For more information regarding our operating leases, see Note 12 titled, "Commitments and Contingencies."
(2) A portion of the Net Deferred Tax Liabilities is presented in the "Other Assets" line of our Consolidated Balance Sheets.
At March 31, 2026, we had U.S. federal operating loss carryforwards of $6.3 million, which remain subject to a 20 year carryforward period. Additionally, we had non-U.S. operating loss carry forwards of $86.4 million. Although the majority of the non-U.S. carryforwards have indefinite expiration periods, those carryforwards that have definite expiration periods will expire if unused between fiscal years 2027 and 2047. In addition, we have a pre-valuation allowance tax benefits balance of $2.3 million related to U.S. state operating loss carryforwards. If unused, these state operating loss carryforwards will expire
between fiscal years 2027 and 2047. At March 31, 2026, we had $13.2 million of pre-valuation allowance tax credit carryforwards. These credit carryforwards can be used through fiscal 2036.
We review the need for a valuation allowance against our deferred tax assets. A valuation allowance of $29.0 million has been applied to a portion of the net deferred tax assets because we do not believe it is more-likely-than-not that we will receive future benefit. The valuation allowance decreased during fiscal 2026 by $1.6 million.
Other than the tax expense previously recorded for the one-time transition tax on unremitted earnings of non-US subsidiaries, no additional provision has been made for income taxes on undistributed earnings of foreign subsidiaries as the Company’s position is that these amounts continue to be indefinitely reinvested.  The amount of undistributed earnings of subsidiaries was approximately $3,000.0 million at March 31, 2026.  It is not practicable to estimate the additional income taxes and applicable withholding taxes that would be payable on the remittance of such undistributed earnings.
On October 8, 2021, the OECD announced the OECD/G20 Inclusive Framework on BEPS, which agreed to a two-pillar solution to address tax challenges arising from digitalization of the economy. On December 20, 2021, the OECD released Pillar Two Model Rules defining the global minimum tax (GloBE), which calls for the taxation of large corporations at a minimum rate of 15%. The OECD continues to release additional guidance on the global minimum tax. The global minimum tax rules were effective from our fiscal year beginning April 1, 2024. We do not expect the impact to be material to the Company's consolidated financial statements.
Cash paid for income taxes (net of refunds received) for the year ended March 31, 2026, presented in accordance with the requirements of newly adopted ASU 2023-09, is as follows:
(in millions)
Year Ended March 31,2026
Cash paid during the year for:
Income taxes, net, Ireland$8.4 
Income taxes, net, U.S.231.3 
Income taxes, net, other locations49.2 
Income taxes, net of refunds, total$289.0 
Cash paid for income taxes and cash received for refunds for the years ended March 31, 2025 and 2024, presented before adoption of ASU 2023-09, is as follows:
(in millions)
Years Ended March 31,20252024
Cash paid during the year for:
Income taxes273.6 271.3 
Cash received during the year for income tax refunds9.5 19.2