INCOME TAXES |
6 Months Ended |
|---|---|
Jun. 30, 2026 | |
| Income Tax Disclosure [Abstract] | |
| INCOME TAXES | INCOME TAXES The tax provision for interim periods is determined using the estimated annual effective consolidated tax rate, based on the current estimate of full-year earnings and related estimated full-year taxes, adjusted for the impact of discrete quarterly items. The Organisation for Economic Co-operation and Development’s Model Global Anti-Base Erosion rules under Pillar Two have been enacted by various countries beginning in 2024. These enacted laws relate to the Pillar Two safe harbors, Income Inclusion Rule, Qualified Domestic Minimum Top-up Tax and the Undertaxed Profits Rule for 2025 and onward. We have analyzed the provisions in the applicable jurisdictions and provided for the appropriate tax amounts. We do not expect a material impact from Pillar Two related taxes for 2026. The effective tax rate for the three months ended June 30, 2026 and 2025, respectively, was 23.5% and 20.0%. The effective tax rate for the six months ended June 30, 2026 and 2025, respectively, was 23.0% and 22.5%. The effective tax rate for the three and six months ended June 30, 2026 did not include a deferred tax benefit from the release of a valuation allowance, and greater tax benefits from share-based compensation that existed in the prior-year period. Given our current earnings and anticipated future earnings, we believe there is a reasonable possibility that within the next 12 months, sufficient positive evidence may become available to support the realization of $2.0 million to $5.0 million of deferred tax assets, for which there is currently a corresponding valuation allowance. Release of the valuation allowance would result in the recognition of certain deferred tax assets and a decrease to income tax expense for the period in which the release is recorded. However, the exact timing and amount of the valuation allowance release are subject to change pending the level of profitability that we are able to actually achieve.
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