Income Taxes |
6 Months Ended |
|---|---|
Jun. 30, 2025 | |
| 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 28.3% and 18.3% for the three and six months ended June 30, 2025, respectively. In addition to the above referenced items, the three month period ended June 30, 2025 was unfavorably impacted by interest accruals for uncertain tax positions. The six month period ended June 30, 2025 was favorably impacted by the reversal of accruals for uncertain tax positions as a result of the resolution of certain previous years' international tax matters, partially offset by interest accruals for other uncertain tax positions. Our effective income tax rate was 27.8% and 28.8% for the three and six months ended June 30, 2024, respectively. In addition to the above referenced items, the three and six month periods were unfavorably impacted by accruals for uncertain tax positions. There were no significant changes in our valuation allowances for the three and six months ended June 30, 2025 and 2024. Net increases/(decreases) in unrecognized tax positions were $4.7 million and $(39.5) million for the three and six months ended June 30, 2025, respectively, and $2.3 million and $6.9 million for the three and six months ended June 30, 2024, respectively. The six month period ended June 30, 2025 decreased as a result of the resolution of certain previous years’ international tax matters, partially offset by interest accruals on existing uncertain tax positions, and for the six month period ended June 30, 2024 increased 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. On July 4, 2025, the One Big Beautiful Bill Act ("OBBB"), which includes a broad range of tax reform provisions that may affect the Company's financial results, was signed into law. The OBBB allows an elective deduction for domestic Research and Development ("R&D"), a reinstatement of elective 100% first-year bonus depreciation, and a more favorable tax rate on Foreign-derived Deduction Eligible Income and income from non-U.S. subsidiaries (Net CFC tested income), among other provisions. The Company is currently evaluating the impact of these provisions which could affect the Company's effective tax rate and deferred tax assets in 2025 and future periods. A quantitative estimate of the specific financial effects cannot be reasonably determined at this time due to the complexity of the tax reform changes. The Organization for Economic Co-operation and Development ("OECD") has issued Pillar Two model rules introducing a new global minimum tax of 15% as of January 1, 2024. These model rules have been agreed upon in principle by over 140 countries and many countries have incorporated Pillar Two model rule concepts into their domestic laws. In June 2025, the G7 agreed to exclude U.S. Multi-National Entities ("MNEs") from certain aspects of the Pillar Two global minimum tax rules (the G7 Statement) in exchange for the U.S. not imposing retaliatory taxes in the OBBB. We will continue to monitor the G7 Statement, which has not yet been incorporated into the OECD framework. As countries continue to enact and refine the Pillar Two rules, we will evaluate the impact on our financial position. The Pillar Two minimum tax did not have a material impact on the Company's financial results of operations for the three and six months ended June 30, 2025.
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