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INCOME TAXES | 9 Months Ended
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Sep. 30, 2024
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES A reconciliation of the provision for income taxes using the statutory federal income tax rate to our effective income tax rate is as follows below. The three and nine months ended September 30, 2023, have been adjusted to conform to the current year presentation.
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2024 |  | 2023 |  | 2024 |  | 2023
Federal statutory rate | 21.0 | % |  | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State income taxes, net of federal benefit | 3.2 |  |  | 2.8 |  |  | 2.7 |  |  | 2.4 |
Share based payment awards | (2.7) |  |  | (1.5) |  |  | (1.4) |  |  | (2.9) |
Foreign tax credits | 13.7 |  |  | (9.0) |  |  | 3.8 |  |  | (4.8) |
Other U.S. tax credits and incentives | (5.1) |  |  | (6.1) |  |  | (5.8) |  |  | (4.5) |
Foreign tax rate differential | (4.5) |  |  | 8.4 |  |  | (0.4) |  |  | 2.1 |
Business divestitures (1) | 7.9 |  |  | (5.9) |  |  | 2.8 |  |  | (1.6) |
Section 162(m) limitation on compensation | 1.1 |  |  | 1.5 |  |  | 1.0 |  |  | 1.1 |
Other | (2.2) |  |  | 0.5 |  |  | (0.7) |  |  | 0.7 |
Effective income tax rate | 32.4 | % |  | 11.7 | % |  | 23.0 | % |  | 13.5 | %
____________________________________________ (1) Amounts in the three and nine months ended September 30, 2024, relate to the divestiture of our Europe Surface Transportation business. Amounts in the three and nine months ended September 30, 2023, relate to the divestiture of our Argentina operations. Refer to Note 14, Divestitures, for further discussion related to these divestitures. In 2021, the Organization for Economic Cooperation and Development (“OECD”) announced an Inclusive Framework on Base Erosion and Profit Shifting including Pillar Two Model Rules defining the global minimum tax, which calls for the taxation of large multinational corporations at a minimum rate of 15 percent. Subsequently, multiple sets of administrative guidance have been issued. Many non-U.S. tax jurisdictions have either recently enacted legislation to adopt certain components of the Pillar Two Model Rules beginning in 2024 (including the European Union Member States) with the adoption of additional components in later years or announced their plans to enact legislation in future years. We are continuing to evaluate the impact of enacted legislation and pending legislation to enact Pillar Two Model Rules in the tax jurisdictions we operate in. During the third quarter of 2024, we recognized an increase to tax expense of approximately $11.5 million for non-deductible expenses related to the planned divestiture of our Europe Surface Transportation business. Refer to Note 14, Divestitures for additional detail related to the divestiture of our Europe Surface Transportation business. As of September 30, 2024, we have $24.2 million of unrecognized tax benefits and related interest and penalties. It is possible the amount of unrecognized tax benefit could change in the next 12 months as a result of a lapse of the statute of limitations, new information, or settlements with taxing authorities. The total liability for unrecognized tax benefits is expected to decrease by approximately $1.3 million in the next 12 months due to the lapsing of statutes of limitations. With few exceptions, we are no longer subject to audits of U.S. federal, state and local, or non-U.S. income tax returns before 2019.

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