CARLISLE COMPANIES INCCSL
CARLISLE COMPANIES INC Income Taxes Disclosure
Income Taxes
Sources of Pre-Tax Income and Related Tax Provision by Region
Geographic sources of income before income taxes consists of the following:
| (in millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Continuing operations: | ||||||||||||||||||||
| U.S. domestic | $ | 942.1 | $ | 1,106.5 | $ | 924.1 | ||||||||||||||
| Foreign | 6.7 | 4.4 | 6.3 | |||||||||||||||||
| Income from continuing operations before income taxes | 948.8 | 1,110.9 | 930.4 | |||||||||||||||||
| Discontinued operations: | ||||||||||||||||||||
| U.S. domestic | 0.3 | (15.2) | (121.9) | |||||||||||||||||
| Foreign | — | 495.5 | 143.6 | |||||||||||||||||
| Income from discontinued operations before income taxes | 0.3 | 480.3 | 21.7 | |||||||||||||||||
| Total income before income taxes | $ | 949.1 | $ | 1,591.2 | $ | 952.1 | ||||||||||||||
The provision for income taxes from continuing operations consists of the following:
| (in millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Current provision: | ||||||||||||||||||||
| Federal | $ | 153.4 | $ | 231.7 | $ | 195.8 | ||||||||||||||
| State | 41.9 | 50.4 | 39.4 | |||||||||||||||||
| Foreign | 1.2 | 22.8 | 4.5 | |||||||||||||||||
| Total current provision | 196.5 | 304.9 | 239.7 | |||||||||||||||||
| Deferred provision: | ||||||||||||||||||||
| Federal | 15.5 | (27.8) | (18.2) | |||||||||||||||||
| State | (1.7) | (7.8) | (2.0) | |||||||||||||||||
| Foreign | (4.0) | (23.5) | (8.0) | |||||||||||||||||
| Total deferred provision | 9.8 | (59.1) | (28.2) | |||||||||||||||||
| Total provision for income taxes | $ | 206.3 | $ | 245.8 | $ | 211.5 | ||||||||||||||
Rate Reconciliation
A reconciliation of the tax provision from continuing operations computed at the U.S. federal statutory rate to the actual tax provision follows:
| 2025 | 2024 | 2023 | ||||||||||||||||||||||||||||||||||||
| (in millions, except percentages) | Amount | Percent | Amount | Percent | Amount | Percent | ||||||||||||||||||||||||||||||||
| $ | 199.2 | 21.0 | % | $ | 233.3 | 21.0 | % | $ | 195.4 | 21.0 | % | |||||||||||||||||||||||||||
State and local taxes, net of federal income tax benefit(1) | 31.4 | 3.3 | 33.8 | 3.0 | 31.4 | 3.4 | ||||||||||||||||||||||||||||||||
| Tax credits | (12.6) | (1.3) | (9.1) | (0.8) | (3.3) | (0.4) | ||||||||||||||||||||||||||||||||
| Other, net | (11.7) | (1.2) | (12.2) | (1.1) | (12.0) | (1.3) | ||||||||||||||||||||||||||||||||
| Effective Tax Rate | $ | 206.3 | 21.7 | % | $ | 245.8 | 22.1 | % | $ | 211.5 | 22.7 | % | ||||||||||||||||||||||||||
(1)State taxes in California, Florida, Illinois, Massachusetts, Minnesota, New Jersey, Pennsylvania, and Wisconsin made up the majority (greater than 50 percent) of the tax effect in this category.
Income Taxes Paid
Cash payments for income taxes, net of refunds, were as follows:
| (in millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Federal | $ | 137.9 | $ | 259.4 | $ | 190.2 | ||||||||||||||
| State | 38.0 | 50.2 | 41.5 | |||||||||||||||||
| Foreign | 29.6 | 14.6 | 16.0 | |||||||||||||||||
| Total | $ | 205.5 | $ | 324.2 | $ | 247.7 | ||||||||||||||
Deferred Tax Assets (Liabilities), net
| (in millions) | December 31, 2025 | December 31, 2024 | ||||||||||||
| U.S. federal tax attributes | $ | 39.7 | $ | 37.6 | ||||||||||
| Deferred revenue | 37.1 | 35.9 | ||||||||||||
| Employee benefits | 30.0 | 30.9 | ||||||||||||
| Capitalized research and development costs | — | 29.4 | ||||||||||||
| Lease liabilities | 27.3 | 22.8 | ||||||||||||
| U.S. state tax attributes | 22.2 | 19.2 | ||||||||||||
| Non-U.S. tax attributes | 18.3 | 15.7 | ||||||||||||
| Other, net | 26.0 | 21.7 | ||||||||||||
| Gross deferred assets | 200.6 | 213.2 | ||||||||||||
| Valuation allowances | (52.0) | (51.7) | ||||||||||||
| Deferred tax assets after valuation allowances | 148.6 | 161.5 | ||||||||||||
| Intangibles | (297.7) | (308.1) | ||||||||||||
| Property, plant and equipment | (54.3) | (47.7) | ||||||||||||
| Right of use assets | (25.7) | (21.6) | ||||||||||||
| Undistributed foreign earnings | (6.7) | (6.3) | ||||||||||||
| Gross deferred liabilities | (384.4) | (383.7) | ||||||||||||
| Net deferred tax liabilities | $ | (235.8) | $ | (222.2) | ||||||||||
Deferred tax assets and liabilities are classified as long-term. Foreign deferred tax assets and liabilities are grouped separately from U.S. domestic assets and liabilities and are analyzed on a jurisdictional basis.
Deferred tax assets and liabilities included in the Consolidated Balance Sheet follow:
| (in millions) | December 31, 2025 | December 31, 2024 | ||||||||||||
| Other long-term assets | $ | 9.8 | $ | 6.0 | ||||||||||
| Deferred taxes | (245.6) | (228.2) | ||||||||||||
| Net deferred tax liabilities | $ | (235.8) | $ | (222.2) | ||||||||||
Valuation Allowances
As of December 31, 2025, the Company had a deferred tax asset related to federal capital loss carryforwards of $37.6 million, which expire in 2029. The Company believes it is likely the carryforwards will expire unused and therefore has established a full valuation allowance. As of December 31, 2025, the Company had foreign tax credit carryforwards for U.S. federal tax purposes of $2.1 million, which begin to expire in 2030. The Company believes it is likely the credits will expire unused and therefore has established a full valuation allowance. As of December 31, 2025, the Company also had a deferred tax asset for state tax attributes of approximately $22.2 million, which begin to expire in 2026, comprised primarily of capital loss carryforwards, in addition to net operating losses (“NOL”) and credits. The Company believes that it is likely that the capital losses and certain of the state NOLs will expire unused and therefore has established a valuation allowance of approximately $11.4 million against the deferred tax assets associated with these attributes. The Company also has deferred tax assets related to carryforwards in foreign jurisdictions of approximately $18.3 million, comprised of NOL and interest expense carryforwards, which begin to expire in 2026. The Company believes that it is likely that certain foreign NOL carryforwards will expire unused and therefore has established a valuation allowance of approximately $0.9 million.
Undistributed Foreign Earnings
The Company has determined that an amount attributable to certain foreign cash balances and other certain assets is not permanently reinvested for withholding tax purposes, which results in an accrual of $6.7 million. It is not practicable to calculate deferred tax balances on other basis differences.
Unrecognized Tax Benefits
Unrecognized tax benefits reflect the difference between the tax benefits of positions taken or expected to be taken on income tax returns and the tax benefits that meet the criteria for current recognition in the financial statements. The Company periodically assesses its unrecognized tax benefits.
A summary of the movement in gross unrecognized tax benefits (before estimated interest and penalties) follows:
| (in millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Balance as of January 1 | $ | 9.6 | $ | 7.3 | $ | 6.4 | ||||||||||||||
| Additions based on tax positions related to current year | 3.6 | 3.1 | 3.3 | |||||||||||||||||
| Reductions due to statute of limitations | (0.8) | (0.8) | (2.7) | |||||||||||||||||
| Reductions due to settlements | — | — | (0.2) | |||||||||||||||||
| Adjustments due to foreign exchange rates | (0.3) | — | 0.5 | |||||||||||||||||
| Balance as of December 31 | $ | 12.1 | $ | 9.6 | $ | 7.3 | ||||||||||||||
If the unrecognized tax benefits as of December 31, 2025 were to be recognized, approximately $10.7 million would impact the Company’s effective tax rate. The amount impacting the Company’s effective rate is calculated by adding accrued interest and penalties to the gross unrecognized tax benefit excluding positions related to discontinued operations and subtracting the federal tax benefit associated with state taxes and interest.
The Company classifies and reports interest and penalties associated with unrecognized tax benefits as a component of the income tax provision on the Consolidated Statements of Income and as an other long-term liability on the Consolidated Balance Sheets. The total amount of such interest and penalties accrued, but excluded from the table above, at the years ending December 31, 2025, 2024 and 2023 were $1.4 million, $1.2 million and $1.2 million, respectively.
The Company is subject to U.S. federal income tax as well as income tax in multiple state and foreign jurisdictions. The Company participates in the IRS compliance assurance program and is currently up to date.
Generally, state income tax returns are subject to examination for a period of three years to five years after filing. Substantially all material state tax matters have been concluded for tax years through 2019. Various state income tax returns for subsequent years are in the process of examination. At this stage the outcome is uncertain; however, the Company believes that contingencies have been adequately provided for. Statutes of limitation vary among the foreign jurisdictions in which the Company operates. Substantially all foreign tax matters have been concluded for tax years through 2014. The Company believes that foreign tax contingencies associated with income tax examinations underway or open tax years have been provided for adequately.
Tax Legislation
The Organization for Economic Co-operation and Development (“OECD”) has introduced a framework to implement a global minimum corporate tax of 15%, referred to as Pillar Two. Certain countries in which the Company operates have adopted legislation. On January 5, 2026, the OECD released the Side-by-Side addition to the framework, recognizing the US as a qualified regime and limiting the application of Pillar Two taxes to US headquartered multinationals, such as Carlisle, starting in 2026. Carlisle does not expect material tax effects related to Pillar Two.
On July 4, 2025, the One Big Beautiful Bill Act was signed into law. The Company has evaluated and incorporated the effects of the legislation into its income tax balances.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 13, 2026 | Showing above |
| 2024 | Feb 14, 2025 | |
| 2023 | Feb 16, 2024 | |
| 2022 | Feb 16, 2023 | |
| 2021 | Feb 17, 2022 | |
| 2020 | Feb 11, 2021 | |
| 2019 | Feb 10, 2020 | |
| 2018 | Feb 14, 2019 | |
| 2017 | Feb 16, 2018 | |
| 2016 | Feb 13, 2017 | |
| 2015 | Feb 8, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.