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Income Taxes
 9 Months Ended
Sep. 30, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The Company's effective income tax rate for the three and nine months ended September 30, 2025 and 2024, is as follows:
Three months ended September 30,Nine months ended September 30,
2025202420252024
Effective income tax rate20.0 %6.6 %16.4 %23.9 %
Income tax expense for the quarter was computed in accordance with ASC 740-270, Income Taxes – Interim Reporting. Under this method, loss jurisdictions subject to valuation allowances cannot recognize a tax benefit with regard to their generated losses and are excluded from the annual effective tax rate calculation as their taxes will be recorded discretely in each quarter.
Our 2025 estimated annual effective tax rate primarily reflects the 21% federal tax rate, the impact of state and local taxation, the impact of taxation upon foreign operations, and forecasted permanent differences. Our actual effective tax rates were 20.0% and 6.6% for the three months ended September 30, 2025 and 2024, respectively. Our actual effective tax rates were 16.4% and 23.9% for the nine months ended September 30, 2025 and 2024, respectively.
The effective tax rate for the three months ended September 30, 2025 included a net discrete tax benefit of $0.7 million. This discrete tax benefit is mostly attributable to the true-up for prior year's estimated taxes. The rate for the three months ended September 30, 2025 was higher than the three months ended September 30, 2024 mainly due to a significant favorable discrete tax adjustment in the quarter ended September 30, 2024 related to the decrease in the valuation allowance as compared to the current period.
The effective tax rate for the nine months ended September 30, 2025 included a net discrete tax benefit of $2.3 million. The discrete tax benefit recognized primarily reflects adjustments to prior year estimated tax provisions to actual filings, a net reduction in valuation allowances, and a net decrease in uncertain tax positions. The effective rate for the nine months ended September 30, 2025 was lower than the nine months ended September 30, 2024, largely due to the favorable impact of discrete tax items, including the release of valuation allowances in the current period.
The Company is subject to audit in the U.S. and various foreign jurisdictions. Our open tax years for major jurisdictions generally range from 2013-2024. We believe appropriate provisions for all outstanding tax issues have been made for all jurisdictions and all open years. Audit outcomes and the timing of audit settlements are subject to significant uncertainty. It is reasonably possible that within the next 12 months, unrecognized tax benefits could decrease by up to $2.1 million based on current estimates.