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Income Taxes | 9 Months Ended
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Sep. 30, 2025
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted into law. The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation. The OBBBA also provides for changes to the global intangible low-taxed income (“GILTI”) provision, the base-erosion and anti-abuse tax (“BEAT”) provision and the foreign derived intangible income (“FDII”) provision. ASC 740, “Income Taxes”, requires the effects of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation is enacted. Consequently, the Company has recorded the impacts in the provisional tax expense for the three months ended September 30, 2025 which resulted in a net provisional charge of $24.9 million. The charge is comprised of $16.7 million of tax expense related to the establishment of valuation allowance against our U.S. foreign tax credit carryforwards on general category income and an additional $8.2 million of tax expense related to indirect permanent impacts of OBBBA on U.S. foreign inclusions and state taxes, primarily as a result of domestic research cost expensing. For the three months ended September 30, 2025, we earned $317.5 million before taxes and recorded a provision for income taxes of $93.7 million resulting in an effective tax rate of 29.5%. For the nine months ended September 30, 2025, we earned $518.6 million before taxes and recorded a provision for income taxes of $127.1 million resulting in an effective tax rate of 24.5%. The effective tax rate varied from the U.S. federal statutory rate for the three months ended September 30, 2025 primarily due to the impacts pursuant to the enactment of OBBBA and state income taxes, partially offset by the net impact of foreign operations. The effective tax rate varied from the U.S. federal statutory rate for the nine months ended September 30, 2025 the impacts pursuant to the enactment of OBBBA and state income taxes, partially offset by the net impact of foreign operations. For the three months ended September 30, 2024, we earned $82.1 million before taxes and recorded a provision for income taxes of $18.7 million resulting in an effective tax rate of 22.8%. For the nine months ended September 30, 2024, we earned $280.4 million before taxes and recorded a provision for income taxes of $62.7 million resulting in an effective tax rate of 22.4%. The effective tax rate varied from the U.S. federal statutory rate for the three months ended September 30, 2024 primarily due to the net impact of foreign operations. The effective tax rate varied from the U.S. federal statutory rate for the nine months ended September 30, 2024 primarily due to the net impact of foreign divestiture and foreign operations. The Company maintains a full valuation allowance against the net deferred tax assets in certain foreign tax jurisdictions as of September 30, 2025. As of each reporting date, management considers new evidence, both positive and negative, that could affect its view of the future realization of net deferred tax assets. We assess our forecast of future taxable income and available tax planning strategies that could be implemented to realize the net deferred tax assets in determining the sufficiency of our valuation allowances. Failure to achieve forecasted taxable income in the applicable tax jurisdictions could affect the ultimate realization of deferred tax assets and could result in an increase in our effective tax rate on future earnings. It is possible there may be sufficient positive evidence to release a portion of the remaining valuation allowance in those foreign jurisdictions. Release of the valuation allowance would result in a benefit to income tax expense for the period the release is recorded, which could have a material impact on net earnings. The timing and amount of the potential valuation allowance release are subject to significant management judgment and the level of profitability achieved. On December 20, 2021, the Organisation for Economic Co-operation and Development (“OECD”) released the Model GloBE Rules for Pillar Two defining a 15% global minimum tax rate for large multinational corporations. Many countries continue to consider changes in their tax laws and regulations based on the Pillar Two proposals. We are continuing to evaluate the impact of these proposed and enacted legislative changes as new guidance becomes available. Some of these legislative changes could result in double taxation of our non-U.S. earnings, a reduction in the tax benefit received from our tax incentives, or other impacts to our effective tax rate and tax liabilities. As of September 30, 2025, the company is not expecting material impacts under currently enacted legislation.

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