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INCOME TAXES
 9 Months Ended
Sep. 30, 2025
INCOME TAXES  
INCOME TAXES

12. INCOME TAXES

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The Company’s tax rate was 17.8% and 25.0% for the third quarter of 2025 and 2024, respectively, and 19.2% and 18.9% for the first nine months of 2025 and 2024, respectively. The change in the Company’s tax rate for the third quarter and first nine months of 2025 compared to the third quarter and first nine months of 2024 was driven primarily by the impact of discrete tax items and special (gains) and charges. Further information related to special (gains) and charges is included in Note 2.

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The Company recognized net tax benefits related to discrete tax items of $16.3 million and $21.8 million in the third quarter and first nine months of 2025, respectively. This included a tax benefit of $2.7 million and $12.6 million in the third quarter and first nine months of 2025, respectively, associated with share-based compensation excess tax benefits. The remaining net tax benefit of $13.6 million and of $9.2 million in the third quarter and first nine months of 2025, respectively, was from the filing of tax returns, audit settlements, unrecognized tax benefits, and other changes in estimates.

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The Company recognized net tax expense related to discrete tax items of $15.8 million and a net tax benefit of $42.7 million in the third quarter and first nine months of 2024, respectively. This included a tax benefit of $41.9 million in the first nine months of 2024 associated with transferring certain intangible property between affiliates and $3.3 million and $15.6 million in the third quarter and first nine months of 2024, respectively, associated with share-based compensation excess tax benefits. The remaining net tax expense of $19.1 million and $14.8 million in the third quarter and first nine months of 2024, respectively, was from other income tax adjustments including the impact of provision to return adjustments, changes in tax laws, audit settlements, unrecognized tax benefits and other changes in estimates.

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On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. An estimate of the financial impact has been included in operating results as of September 30, 2025. The OBBBA did not have a material impact on the Company’s income tax expense.

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The Organization for Economic Co-operation’s (“OECD”) global minimum tax regime (“Pillar Two”) is effective in certain countries where the Company operates. As such, an estimate of Pillar Two tax has been considered within the provision for income taxes. The Company continues to monitor these legislative developments, but based on information available does not anticipate material impacts to the 2025 financial statements.

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