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Income Taxes
 6 Months Ended
Jun. 30, 2025
Income Tax Disclosure [Abstract]  
Income taxes Income taxes
Income tax provision
Prior to the Spin-off, income tax expense and income tax balances were calculated using the separate tax
return method. The separate tax return method applies the accounting guidance for income taxes to the stand-alone
financial statements as if the Company were a separate taxpayer and a stand-alone enterprise. U.S. and Canadian
operations, which represent the majority of the Company’s operations, were not included in Parent’s tax filings prior
to the Spin-off, and there has been no substantive change in the tax filing profile for those jurisdictions. The
Company’s Swiss operations were included in Parent’s Swiss legal structure and tax filings prior to the Spin-off.
Post Spin-off, the income tax provisions are calculated based on the Company’s operating footprint, as well
as tax return elections and assertions. Given that prior to the Spin-off the Company’s U.S. and Canadian operations
were not included in Parent’s tax filings, U.S. and Canadian tax returns will be filed on a full-year basis in 2025.
Swiss operations, which were included in Parent’s tax filings prior to the Spin-off, will be reflected in separate Swiss
tax returns filed by the Company beginning on the date of the Spin-off. Tax liabilities as of June 30, 2025 are
reported within the condensed consolidated balance sheet based upon estimated amounts due to tax authorities for
which the Company is the primary obligor.
The Company’s tax provision for the interim period is calculated using an estimated annual effective tax
rate based on the expected full-year results which is applied to ordinary year-to-date income. The tax provision is
adjusted for discrete items that occur in the period to arrive at the total tax expense.
The calculation of the Company’s income tax expense is set forth below:
For the three months ended
June 30,
For the six months ended
June 30,
(In millions, except for percentage data)
2025
2024
2025
2024
Total tax expense
$122
$149
$76
$138
Effective income tax rate
22.2%
24.0%
18.3%
24.5%
The Company’s estimated annual effective tax rate is based on full-year expectations of pretax earnings,
statutory tax rates and permanent differences between book and tax accounting.
Effective January 1, 2024, the Company is subject to the 15% minimum tax rate provisions of the
Organization for Economic Co-operation and Development Pillar Two (‘‘OECD Pillar Two’’) framework enacted
into law in both Switzerland and Canada, jurisdictions in which the Company operates. Estimated Pillar Two taxes
of $3 million have been included in the calculation of the Company’s effective tax rate for each of the three months
ended June 30, 2025 and 2024, and $6 million have been included in the calculation of the Company’s effective tax
rate for each of the six months ended June 30, 2025 and 2024, respectively.
The change in the effective tax rate compared to the U.S. federal statutory tax rate of 21% for the three and
six months ended June 30, 2025 and 2024 was primarily attributable to the jurisdictional mix of pre-tax income,
changes in uncertain tax positions, Pillar Two tax and prior year accrual adjustments.