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Income Taxes | 6 Months Ended
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Jun. 30, 2025
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Our effective income tax rates from continuing operations for the three and six months ended June 30, 2025 were 24.5 percent and 43.8 percent, respectively. Our effective income tax rates from continuing operations for the three and six months ended June 30, 2024 were 5,518.2 percent and negative 12,196.0 percent respectively. The change in the effective tax rate for the three and six months ended June 30, 2025 was primarily driven by approximately $300 million of net tax benefit recorded during the second quarter of 2024 in connection with our establishment of a global technology and innovation center in Switzerland as well as foreign currency and the global mix of earnings. Refer to Note 11 to the consolidated financial statements included within our 2024 Form 10-K for more information of the prior year benefit. We determine our interim tax provision using an Estimated Annual Effective Tax Rate methodology ("EAETR") in accordance with U.S. GAAP. The EAETR is applied to the year-to-date ordinary income, exclusive of discrete items. The tax effects of discrete items are then included to arrive at the total reported interim tax provision. The determination of the EAETR is based upon a number of estimates, including the estimated annual pretax ordinary income in each tax jurisdiction in which we operate. As our projections of ordinary income change throughout the year, the EAETR will change period-to-period. A significant amount of our earnings is generated by our foreign subsidiaries, which tax earnings at lower statutory rates than the United States federal statutory rate. Our future effective tax rates may be materially impacted by a future change in the composition of earnings from foreign and domestic tax jurisdictions. The tax effects of discrete items are recognized in the tax provision in the period they occur in accordance with U.S. GAAP. Depending on various factors, such as the item’s significance in relation to total income and the rate of tax applicable in the jurisdiction to which it relates, discrete items in any quarter can materially impact the reported effective tax rate. As a global enterprise, our tax expense can be impacted by changes in tax rates or laws, the finalization of tax audits and reviews, as well as other factors. As a result, there can be significant volatility in interim tax provisions. On December 20, 2021, the Organization for Economic Co-operation and Development (the "OECD") released Pillar Two Model Rules defining the global minimum tax, which calls for the taxation of large corporations at a minimum rate of 15% implemented via a top-up tax. The impacts of Pillar Two legislation were not material to the three and six months ended June 30, 2025. We will continue to evaluate the impact of the Pillar Two Framework as legislative changes are enacted and additional guidance becomes available. In January of 2025, the OECD issued administrative guidance that will limit the economic benefit of certain non-refundable tax credits ("Swiss credits"), which were granted to our Swiss subsidiaries in 2023. We may pay more top-up tax in the future as a result of the January 2025 guidance. Because we apply an accounting policy to exclude the effects of Pillar Two top-up taxes from our analysis of the realizability of certain deferred tax assets, our valuation allowance on the deferred tax asset for the Swiss credits will not be impacted by the January 2025 guidance. Subsequent Event On July 4, 2025, the One Big Beautiful Bill Act (“the Act”) was enacted into law in the United States ("U.S."). The Act includes multiple changes to U.S. tax legislation with various effective dates beginning in 2025. These changes include provisions related to the limitation of business interest expense, the international tax framework, and other elements of U.S. tax law. We are evaluating the income tax implications of the Act to our consolidated financial statements.

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