v3.25.3
Income Taxes
 9 Months Ended
Sep. 30, 2025
Income Tax Disclosure [Abstract]  
Income Taxes
Note 17:
Income Taxes
2025 OBBBA Tax Provisions
On July 4, 2025, the U.S. signed into law the H.R.1 legislation formally titled "An Act to Provide for Reconciliation Pursuant to Title II of H. Con. Res. 14", commonly referred to as the OBBBA.
The OBBBA contains tax provisions, such as the permanent extension or revision of certain expiring provisions of the Tax Cuts and Jobs Act enacted in 2017, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The provisions of the OBBBA have multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The OBBBA did not result in any material adjustments to our total income tax provision for the three and nine months ended September 30, 2025, and we have adjusted our deferred tax balances to reflect the impacts of the OBBBA enactment.
Tax Rate
A reconciliation between the U.S. federal statutory tax rate and our effective tax rate is summarized as follows:
For the Three Months Ended September 30,For the Nine Months Ended September 30,
 2025202420252024
Statutory rate21.0 %21.0 %21.0 %21.0 %
State taxes1.7 2.5 1.7 1.7 
Taxes on foreign earnings, including valuation allowances(5.0)(11.9)(7.2)(7.0)
Tax credits(1.6)(1.2)(1.8)(1.7)
Purchased inventory valuation step-up and intangible assets2.4 3.3 2.3 2.0 
GILTI(1.2)(1.1)(1.0)(1.4)
Share-based compensation awards— — 1.1 0.2 
OBBBA enactment(2.1)— (0.7)— 
Other, including permanent items1.1 1.3 1.4 0.6 
Effective tax rate16.3 %13.9 %16.8 %15.4 %
Changes in Tax Rate
For the three and nine months ended September 30, 2025, compared to the same periods in 2024, the increases in our effective tax rates were partially driven by changes in the territorial mix of our profitability, partially offset by the impact of the OBBBA enactment.
The nine months ended September 30, 2025, compared to the same period in 2024, also reflects the impacts of certain share-based compensation awards that vested during the first quarter of 2025 and a decrease in our estimate of Pillar Two minimum tax liabilities.
For the three and nine months ended September 30, 2024, our effective tax rates benefited from a decrease in our valuation allowance, partially offset by the impact of certain foreign uncertain tax positions.
Accounting for Uncertainty in Income Taxes
We and our subsidiaries are routinely examined by various taxing authorities. We file income tax returns in various U.S. states and in U.S. federal and other foreign jurisdictions. With few exceptions, we are no longer subject to U.S. federal tax examination for years before 2021 or state, local or non-U.S. income tax examinations for years before 2013.
The U.S. Internal Revenue Service and other national tax authorities routinely examine our intercompany transfer pricing with respect to intellectual property related transactions and it is possible that they may disagree with one or more positions we have taken with respect to such valuations.
It is reasonably possible that we will adjust the value of our uncertain tax positions related to certain transfer pricing, collaboration matters, withholding taxes and other issues as we receive additional information from various taxing authorities, including reaching settlements with such authorities.
We estimate that it is reasonably possible that our gross unrecognized tax benefits, exclusive of interest, could
decrease by up to approximately $35.0 million in the next 12 months as a result of various audit closures, settlements and expiration of the statute of limitations.