Income Taxes |
9 Months Ended |
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Sep. 30, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes Our effective income tax rates from continuing operations for the three and nine months ended September 30, 2026 were negative 70.8 percent and negative 62.1 percent, respectively. Our effective tax rate from continuing operations for the three and nine months ended September 30, 2025 were negative 17.6 percent and negative 27.4 percent, respectively. The change in the effective tax rate for the three and nine months ended September 30, 2026 was primarily due to material increases in our valuation allowances in Switzerland and the United States. During the third quarter of 2026, we experienced a decline in operating performance, revised our expectations regarding future operating results and cash flows, and considered increased uncertainty associated with future forecasts. Due to the significance of the revised expectations for 2026 and future operating results as well as recent history of restructuring and impairment charges, we reevaluated the realizability of our deferred tax assets in Switzerland and the United States with limited ability to rely on future earnings forecasts. As a result of this assessment, we recorded valuation allowances in Switzerland and the United States of approximately $491 million and $317 million, respectively, during the three months ended September 30, 2026. Additionally, during the first quarter of 2026, as a result of changes in global earnings mix and ongoing tax planning implemented in March 2026, we recorded an increase to our valuation allowance in Switzerland of approximately $123 million. The total valuation allowance charge associated with Switzerland and the United States for the nine months ended September 30, 2026 was approximately $614 million and $317 million, respectively. 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 different 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.
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