Verisk Analytics, Inc. Income Taxes Disclosure

13.    Income Taxes:

 

Domestic and foreign income before income taxes was as follows:

 

		2025				2024				2023
U.S.		$	1,115.7			$	1,201.6			$	1,021.9
Foreign			55.6				27.0				5.3
Total income before income taxes		$	1,171.3			$	1,228.6			$	1,027.2

 

The components of the provision for income taxes for the years ended December 31 were as follows:

 

		2025				2024				2023
Current:
Federal		$	195.3			$	223.0			$	226.8
State and local			48.4				67.5				52.0
Foreign			14.7				7.9				9.0
Total current provision for income taxes			258.4				298.4				287.8
Deferred:
Federal			(0.9	)			(17.2	)			(23.4	)
State and local			1.8				(1.4	)			(3.4	)
Foreign			3.7				(1.9	)			(2.2	)
Total deferred provision for income taxes			4.6				(20.5	)			(29.0	)
Provision for income taxes		$	263.0			$	277.9			$	258.8

 

The income taxes paid were as follows:

 

		2025
Federal		$	144.2
State			59.7
Foreign			14.1
Total		$	218.0

 

Excluding federal income taxes, no individual jurisdiction exceeded 5% of total income taxes paid (net of refunds). The amount of cash income taxes paid by the Company during the years ended December 31, 2024 and 2023 was $287.7 million and $276.0 million, respectively.

 

A reconciliation of the provision for income taxes to the amount computed by applying the 21% statutory U.S. federal income tax rate to income before income taxes after the adoption of ASU 2023-09 is as follows:

 

		2025
		Amount				Percent
U.S. Federal Statutory Tax Rate		$	246.0				21.0	%
State and Local Income Taxes, Net of Federal Income Tax Effect(1)			40.4				3.5
Foreign Tax Effects
Other foreign jurisdictions			6.7				0.6
Effect of Changes in Tax Laws or Rates Enacted in the Current Period			-				-
Effect of Cross-Border Tax Laws
Other			(11.0	)			(0.9	)
Tax Credits
Other			(1.7	)			(0.2	)
Changes in Valuation Allowances			25.7				2.2
Nontaxable or Nondeductible Items
Share-based payment awards			(15.3	)			(1.3	)
Loss on sale of Marketing Solutions			(36.0	)			(3.0	)
Other			9.7				0.8
Changes in Unrecognized Tax Benefits			0.5				0.0
Other Adjustments			(2.0	)			(0.2	)
Effective Tax Rate		$	263.0				22.5	%

 

⁽¹⁾ State taxes in California, Florida, Illinois, New Jersey, New York state and city, and Pennsylvania made up the majority (greater than 50 percent) of the tax effect in this category.

 

A reconciliation of the provision for income taxes to the amount computed by applying the 21% statutory U.S. federal income tax rate to income before income taxes for years prior to the adoption of ASU 2023-09 is as follows:

 

		2024				2023
Federal statutory rate			21.0	%			21.0	%
State and local taxes, net of federal tax benefit			4.3				3.7
Impact of dispositions			(0.2	)			-
Global Intangible Low-taxed Income			0.2				1.3
Stock-based compensation			(1.9	)			(1.8	)
Other			(0.8	)			1.0
Effective tax rate			22.6	%			25.2	%

 

The decrease in the effective tax rate in 2025 compared to 2024 was primarily due to tax benefits recorded in connection with the sale of our Verisk Marketing Solutions business, offset by lower tax benefits from equity compensation in the current period compared with the prior period. The decrease in the effective tax rate in 2024 compared to 2023 was primarily due to tax charges incurred in structuring the sale of our Energy business in the prior year, as well as additional tax benefits recorded for capital losses that we were able to recognize due to capital gains arising from the settlement of our investments in non-public companies in 2024.

 

The tax effects of significant items comprising our deferred tax assets and liabilities as of  December 31 are as follows:

 

		2025				2024
Deferred tax assets:
Employee wages and other benefits		$	46.6			$	47.2
Lease liabilities			42.3				46.3
Net operating loss carryover			7.7				7.6
Interest expense			30.6				30.8
Capital loss carryover			24.3				-
Other			26.0				16.1
Total			177.5				148.0
Less valuation allowance			(27.9	)			(4.2	)
Deferred tax assets			149.6				143.8
Deferred tax liabilities:
Right of use assets			(37.7	)			(40.9	)
Fixed assets and intangible assets			(172.0	)			(168.6	)
Commissions			(19.0	)			(19.3	)
Pensions			(60.5	)			(59.2	)
Other			(17.2	)			(13.1	)
Deferred tax liabilities			(306.4	)			(301.1	)
Deferred tax liabilities, net		$	(156.8	)		$	(157.3	)

 

The net deferred tax liabilities of $156.8 million consist primarily of timing differences involving amortization.

 

Our net operating loss carryforwards expire as follows:

 

Years Ending		Amount
2026 - 2033		$	15.4
2034 - 2038			2.2
2039 - 2045			31.0
Total		$	48.6

 

A valuation allowance has been established based on our evaluation of the likelihood of utilizing these benefits before they expire. Other than these items, we have determined, based on our historical operating performance, that our taxable income will more likely than not be sufficient to fully realize the deferred tax assets.

 

As of December 31, 2025, we have not made a provision for U.S. or additional foreign withholding taxes for any additional outside basis difference inherent in our foreign subsidiaries, as these amounts continue to be indefinitely reinvested in foreign operations. Determining the amount of unrecognized deferred tax liability related to any additional outside basis difference in these entities is not practicable. We do not rely on these unremitted earnings as a source of funds for our domestic business as we expect to have sufficient cash flow in the U.S. to fund our U.S. operational and strategic needs.

 

We follow ASC 740-10, which prescribes a comprehensive model for the financial statement recognition, measurement, presentation, and disclosure of uncertain tax positions taken or expected to be taken in income tax returns. For each tax position, we must determine whether it is more likely than not that the position will be sustained upon examination based on the technical merits of the position, including resolution of any related appeals or litigation. A tax position that meets the more likely than not recognition threshold is then measured to determine the amount of benefit to recognize within the financial statements. No benefits may be recognized for tax positions that do not meet the more likely than not threshold. A reconciliation of the beginning and ending amount of unrecognized tax benefit is as follows:

 

		2025				2024				2023
Unrecognized tax benefit as of January 1		$	4.1			$	2.0			$	3.2
Gross increase in tax positions in prior period			5.0				2.3				0.8
Gross decrease in tax positions in prior period			-				-				-
Settlements			-				-				-
Lapse of statute of limitations			(0.5	)			(0.2	)			(2.0	)
Unrecognized tax benefit as of December 31		$	8.6			$	4.1			$	2.0

 

All unrecognized tax benefits as of  December 31, 2025, 2024, and 2023 would have a favorable impact on our effective tax rate if recognized in any future periods.

 

The total gross amount of accrued interest and penalties for the years ended December 31, 2025, 2024, and 2023 was $1.2 million, $0.7 million, and $0.2 million, respectively. Our practice is to recognize interest and penalties associated with income taxes as a component of “Provision for income taxes” in our accompanying consolidated statements of operations.

 

We are subject to tax in the U.S., various state, and foreign jurisdictions, and are routinely under audit by various tax authorities. With few exceptions, we are no longer subject to U.S. federal, state and local, or non-US income tax examinations by tax authorities for tax years before 2020. We do not expect the results of current examinations to have a material effect on our financial position, results of operations, or cash flow.