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Provision for Income Taxes
 3 Months Ended
Mar. 31, 2025
Income Tax Disclosure [Abstract]  
Provision for Income Taxes
12.
Provision for Income Taxes

The components of provision for income taxes are as follows (in millions):

 

 

 

March 31,
2025

 

 

March 31,
2024

 

Income Tax Provision

 

$

8.7

 

 

$

19.8

 

Effective Tax Rates (a)

 

 

34.7

%

 

 

27.7

%

Penalties and Interest (recorded in provision for
   income taxes for unrecognized tax benefits)

 

$

0.8

 

 

$

1.2

 
a)
The increase in the Company's effective tax rate was primarily due to changes in jurisdictional mix and net unfavorable discrete activities.

 

The table below summaries unrecognized tax benefits and accrued interest and penalties components (in millions):

 

 

 

March 31,
2025

 

 

December 31,
2024

 

Unrecognized Tax Benefits (a)

 

$

65.6

 

 

$

63.7

 

Accrued Interest and Penalties (b)

 

$

6.0

 

 

$

5.3

 
a)
This excludes penalties and interest. If these unrecognized tax benefits were recognized, there would be a reduction of the Company's effective tax rate.
b)
These are related to uncertain tax positions and were included in other long-term liabilities on the Company's unaudited condensed consolidated balance sheets.

 

The Company files tax returns in the United States, which include federal, state and local jurisdictions, and many foreign jurisdictions with varying statutes of limitations. The Company considers Germany, the United States and Switzerland to be its significant tax jurisdictions. The majority of the Company’s earnings are derived in Germany and Switzerland. Accounting for the various federal and local taxing authorities, the statutory rates for 2025 are approximately 30.0% and 20.0% for Germany and Switzerland, respectively. The mix of earnings in those two jurisdictions resulted in an increase of approximately 5.7% from the U.S. statutory rate of 21.0% in the three months ended March 31, 2025.

The Organization for Economic Co-operation and Development introduced its Pillar Two Framework Model Rules (“Pillar 2”), which provides guidance for a global minimum tax. Various countries have either enacted or are in the process of enacting legislation to implement this framework. Our income tax provision for the three months ended March 31, 2025, reflects currently enacted legislation and guidance related to the model rules. This enacted legislation and guidance had an impact on our income tax provision, resulting in an increase to the Company’s effective tax rate of 2.1% for the three months ended March 31, 2025. The Company continues to monitor the countries in which it operates as they enact legislation implementing Pillar 2.