Taxes |
6 Months Ended |
|---|---|
Jun. 30, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Taxes | Note 3. Taxes The Company is subject to taxation in the U.S. and many foreign jurisdictions. The Company's tax positions, including its intercompany transfer pricing policies, are reasonable and consistent with accepted methodologies. The Company is subject to review by taxing authorities for tax years 2005 and thereafter, and those reviews could result in additional tax, interest and penalties. For example, the Indian tax authority (ITA) has claimed that additional income tax applies to transactions between the Company and its Indian subsidiary, and that additional service tax applies to ocean and air imports and exports. The Company maintains that the ITA’s positions are without merit. The Company has successfully defended its positions in India's courts, including a favorable ruling from the Supreme Court of India during the second quarter that dismissed a significant portion of the ITA's claims. If the remaining matters are resolved unfavorably, the Company could recognize additional significant tax expense, including interest and penalties. The Company records liabilities for uncertain tax positions when, despite having supportable positions in its tax return, it concludes that those positions may not be sustained upon examination by tax authorities. To make that judgment, the Company assesses whether the position is more likely than not to be upheld if challenged, including through any related appeals or litigation, based on the technical strength of the position and advice from qualified legal and tax advisors. The Company’s consolidated effective income tax rate was 25.4% and 25.2% for the three and six months ended June 30, 2026, respectively, down from 28.7% and 27.3% in the same periods of 2025. The declines were driven mainly by a smaller unfavorable impact from the Company's international subsidiaries, resulting from fewer nondeductible foreign expenses and lower expense from operations in countries with tax rates higher than those in the U.S. The Company’s effective tax rate for the three and six months ended June 30, 2026, is higher than the U.S. federal statutory income tax rate of 21% primarily because of foreign withholding taxes on the Company's international operations, state and local income taxes, and the higher rates applied to certain foreign subsidiaries. Foreign tax credits and the deduction for Foreign-Derived Deduction-Eligible Income (FDDEI) partially offset these costs. |