XML 35 R25.htm IDEA: XBRL DOCUMENT v3.24.3
Income Taxes
 9 Months Ended
Sep. 30, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Effective Income Tax Rate and Income Tax Provision
For interim tax reporting, we estimate one annual effective tax rate for tax jurisdictions not subject to a valuation allowance and apply that rate to the year-to-date ordinary income/(loss). Tax effects of significant unusual or infrequently occurring items are excluded from the estimated annual effective tax rate calculation and recognized in the interim period in which they occur.
Compared to the U.S. statutory rate of 21.0%, state income taxes, foreign earnings subject to higher tax rates and non-deductible expenses increase the Company's effective income tax rate, whereas research and development credits decrease the Company's effective tax rate.
Our effective income tax rate was 25.7% and 27.8% for the three and nine months ended September 30, 2024, respectively. In addition to the above referenced items, the three and nine month periods were unfavorably impacted by accruals for uncertain tax positions.
Our effective income tax rate was 26.1% and 31.7% for the three and nine months ended September 30, 2023, respectively. In addition to the above referenced items, the three and nine month periods were unfavorably impacted by accruals for uncertain tax positions.
There were no significant changes in our valuation allowances for the three and nine months ended September 30, 2024 and 2023.
Net increases in unrecognized tax positions of $2.2 million and $9.1 million for the three and nine months ended September 30, 2024, respectively, and $3.7 million and $15.0 million for the three and nine months ended September 30, 2023, respectively, were primarily related to interest accruals on existing uncertain tax positions. We are not currently able to reasonably estimate the amount by which the liability for unrecognized tax positions may increase or decrease as a result of current and future tax examination activity or resolution. Interest and penalties on tax assessments are included in Income tax provision on our Condensed Consolidated Statements of Operations.
The Organization for Economic Co-operation and Development has issued Pillar Two model rules introducing a new global minimum tax of 15% as of January 1, 2024. While the U.S. has not adopted the Pillar Two rules, various other governments
around the world have enacted legislation. This minimum tax is treated as a period cost and did not have a material impact on the Company's financial results of operations for the three and nine months ended September 30, 2024. The Company is monitoring legislative developments, as well as additional guidance from countries that have enacted legislation, and we anticipate further legislative activity and administrative guidance in the future.