v3.26.1
Income Tax Expense
 6 Months Ended
Jun. 30, 2026
Income Tax Disclosure [Abstract]  
Income Tax Expense

NOTE 12. INCOME TAX EXPENSE

The following table presents our effective tax rate for the three and six months ended June 30, 2026 and 2025:

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2026

 

 

2025

 

 

2026

 

 

2025

 

Earnings before income taxes

 

$

126.9

 

 

$

115.3

 

 

$

215.3

 

 

$

206.0

 

Income tax expense

 

 

30.2

 

 

 

27.5

 

 

 

51.8

 

 

 

49.1

 

Effective tax rate

 

 

23.8

%

 

 

23.9

%

 

 

24.1

%

 

 

23.8

%

The slight decline in the effective tax rate for the second quarter of 2026 compared to the same period in 2025 was due to favorable impacts from executive compensation limitations and excess tax benefits related to stock-based compensation, largely offset by the absence of an investment tax credit recognized in the second quarter of 2025. The modest increase in the effective tax rate for the first six months of 2026 as compared to the same period in 2025 was due to the absence of an investment tax credit recognized in the prior year, partially offset by benefits from lower executive compensation limitations and higher excess tax benefits related to stock-based compensation.

It is reasonably possible that the amount of unrecognized tax benefits could significantly increase or decrease within the next twelve months. However, an estimate of the range of reasonably possible outcomes cannot be reliably made at this time. Changes to unrecognized tax benefits could result from the expiration of statutes of limitations, the completion of ongoing examinations, or other unforeseen circumstances.