v3.26.1
Income Taxes
6 Months Ended
Jun. 30, 2026
Income Tax Disclosure [Abstract]  
Income Taxes Income taxes
The Company estimates its annual effective tax rate each fiscal quarter and applies that estimated rate to its interim pre-tax earnings. In this regard, the Company reflects the full year’s estimated tax impact of certain unusual or infrequently occurring items and the effects of changes in tax laws or rates in the interim period in which they occur. The Company's parent, the Trust, is subject to entity-level U.S. federal, state and local corporate income taxes on the Company's earnings that flow through to the Trust.
The computation of the annual estimated effective tax rate for each interim period requires certain assumptions, estimates, and significant judgment, including with respect to the projected operating income for the year, projections of income earned and taxes incurred in various jurisdictions, permanent and temporary differences and the likelihood of recovering deferred tax assets. The accounting estimates used to compute the provision for income taxes may change as new events occur, as additional information is obtained, as our tax structure changes or as the tax laws change. Certain foreign operations are subject to foreign income taxation under existing provisions of the laws of those jurisdictions.
The Company recognizes interest and penalties related to unrecognized tax benefits within income tax expense. The Company accrues interest on all cumulative unrecognized tax benefits, reflecting financial exposure that spans both historical tax years and the current reporting period. During the current quarter, the Company identified that interest associated with certain previously recognized uncertain tax positions had not been accrued in prior
reporting periods. The Company recorded approximately $5.5 million of additional accrued interest during the quarter, substantially all of which relates to prior years. Management concluded that the adjustment was not material to any previously issued financial statements or the current interim period and, accordingly, recorded the adjustment as a component of income tax expense during the current quarter.
The reconciliation between the Federal Statutory Rate and the effective income tax rate for the six months ended June 30, 2026 and 2025 is as follows:
Six months ended June 30,
20262025
United States Federal Statutory Rate21.0 %21.0 %
State income taxes (net of Federal benefits) 12.4 2.5 
Foreign income taxes(2.1)(10.0)
Nontaxable or nondeductible items(2.2)(0.1)
Utilization of tax credits(0.1)1.3 
Changes in valuation allowances(5.4)(34.0)
United States tax on foreign income1.8 1.9 
Impairment expense4.2 — 
Change in unrecognized tax benefits5.3 — 
Tax effect - sale of Sterno 15.4 — 
Other0.4 (0.6)
Effective income tax rate50.7 %(18.0)%