XML 29 R20.htm IDEA: XBRL DOCUMENT v3.25.3
Income Taxes
 9 Months Ended
Sep. 30, 2025
Income Tax Disclosure [Abstract]  
Income Taxes
11.
Income Taxes

On July 4th 2025, President Trump signed into law the “One Big Beautiful Bill Act” (“OBBBA” or “the Bill”) which includes a broad range of tax reform provisions affecting businesses, including extending and modifying certain domestic and international provisions of the 2017 Tax Cuts & Jobs Act. Based on the Company’s assessment, the change in tax law has led to a reduction in our current cash tax liability without significant impact to the annual effective tax rate.

The Company’s effective tax rate was 16.4% and 20.8% for the three months ended September 30, 2025 and September 30, 2024, respectively. The decrease in the effective tax rate was due primarily to a discrete tax benefit related to the reduction of unrecognized tax benefits for various tax positions resulting from the expiration of the statute of limitations, a change in the jurisdictional mix of earnings, and return-to-provision adjustments from changes in estimates related to business and foreign tax credits, partially offset by a decrease in the foreign-derived intangible income (FDII) deduction and an increase in unrecognized tax benefits for foreign tax credits.

The Company’s effective tax rate was 18.7% and 20.8% for the nine months ended September 30, 2025 and September 30, 2024, respectively. The change in effective tax rate was primarily due to a discrete tax benefit related to the reduction of unrecognized tax benefits for various tax positions resulting from the expiration of the statute of limitations, a change in the jurisdictional mix of earnings, and return-to-provision adjustments from changes in estimates related to business and foreign tax credits, partially offset by a decreases in the FDII deduction and the windfall equity-based compensation deduction, and an increase in unrecognized tax benefits for foreign tax credits.

The difference between the effective tax rate and the statutory U.S. Federal income tax rate of 21% for the three months ended September 30, 2025 primarily relates to a discrete tax benefit related to the reduction of unrecognized tax benefits for various tax positions resulting from the expiration of the statute of limitations, and the tax benefit related to untaxed income attributed to noncontrolling interests, offset by state income taxes and foreign withholding taxes and an increase in unrecognized tax benefits for foreign tax credits.

The difference between the effective tax rate and the statutory U.S. Federal income tax rate of 21% for the nine months ended September 30, 2025 primarily relates to a discrete tax benefit related to the reduction of unrecognized tax benefits for various tax positions resulting from the expiration of the statute of limitations, a discrete windfall tax benefit from equity-based compensation, and the tax benefit related to untaxed income attributed to noncontrolling interests partially offset by state income taxes, foreign withholding taxes, and an increase in unrecognized tax benefits for foreign tax credits.

As of September 30, 2025, the Company’s deferred tax assets were subject to a valuation allowance of $45.0 million primarily related to foreign net operating loss carryforwards, foreign tax credit carryforwards, and capital losses that the Company has determined are not more-likely-than-not to be realized. The factors used to assess the likelihood of realization include: the past performance of the entities, forecasts of future taxable income, future reversals of existing taxable temporary differences, and available tax planning strategies that could be implemented to realize the deferred tax assets. The ability or failure to achieve the forecasted taxable income in these entities could affect the ultimate realization of deferred tax assets.

As of September 30, 2025 and December 31, 2024, the liability for income taxes associated with uncertain tax positions was $28.1 million and $29.5 million, respectively.

Although the Company believes its reserves for its tax positions are reasonable, the final outcome of tax audits could be materially different, both favorably and unfavorably. It is reasonably possible that certain audits may conclude in the

next 12 months and that the unrecognized tax benefits the Company has recorded in relation to these tax years may change compared to the liabilities recorded for these periods.

Different non-US tax jurisdictions continue to enact legislation to adopt components of the Organization for Economic Co-operation and Development (OECD) Base Erosion and Profit Shifting (BEPS) Pillar Two Model Rules. The Company has evaluated the impact of the enacted legislation to date and has determined there is no material impact to the Company’s income tax provision. We are continuing to evaluate the potential impact on future periods of the Pillar Two Framework, pending enactment of legislation by individual countries.