Income Taxes |
9 Months Ended |
|---|---|
Sep. 30, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes Our income tax expense and resulting effective tax rate are based upon the estimated annual effective tax rates applicable for the respective periods adjusted for the effect of items required to be treated as discrete in the interim periods. This estimated annual effective tax rate is affected by the relative proportions of revenue and income before taxes in the jurisdictions in which we operate. Based on the geographical mix of earnings, our annual effective tax rate fluctuates based on the portion of our profits earned in each jurisdiction. The effective tax rates for the quarters ended September 30, 2026 and 2025 were 25.9% and 32.6%, respectively. The effective tax rate for the quarter ended September 30, 2026 is higher than the U.S. Federal tax rate primarily driven by higher tax rates in most foreign jurisdictions and state tax on domestic earnings. The effective tax rate for the quarter ended September 30, 2025 is higher than the U.S. Federal tax rate primarily driven by higher tax rates in most foreign jurisdictions and state tax on domestic earnings, as well as unfavorable adjustments resulting from the completion of the 2024 year-end U.S Federal income tax return. The effective tax rates for the nine months ended September 30, 2026 and 2025 were 21.8% and 27.4%, respectively. The effective tax rate for the nine months ended September 30, 2026 is higher than the U.S. Federal tax rate primarily driven by higher tax rates in most foreign jurisdictions and state tax on domestic earnings partially offset by additional tax benefit related to share-based payments and adjustments to uncertain tax positions. The effective tax rate for the nine months ended September 30, 2025 is higher than the U.S. Federal tax rate primarily driven by higher tax rates in most foreign jurisdictions and state tax on domestic earnings, as well as unfavorable adjustments resulting from the completion of the 2024 year-end U.S. Federal income tax return. The Organization for Economic Co-operation and Development (the “OECD”) introduced a framework to implement a global minimum corporate tax of 15%, referred to as Pillar Two, effective for tax years beginning in 2024. While it is uncertain whether the United States will enact legislation to adopt Pillar Two, certain countries in which we operate have enacted legislation to adopt Pillar Two. The adoption of Pillar Two had no impact on our income tax expense for the nine months ended September 30, 2026 or the nine months ended September 30, 2025 and we expect there to be minimal impact, if any, in future periods. Any impact would be accounted for as a period cost in the period in which it is incurred. On July 4, 2025, the U.S. enacted into law H.R. 1, “An Act to provide for reconciliation pursuant to title II of H. Con. Res. 14” (“The Act”), commonly referred to as “The One Big Beautiful Bill Act.” The Act contains several key tax provisions impacting businesses, including the permanent reinstatement of 100 percent bonus depreciation for qualified property and the restoration of immediate expensing of domestic research and experimental expenditures. The Act also modifies the business interest deduction limitation, as well as several core international tax provisions. Provisions of H.R. 1 effective in 2026 had a favorable impact on the Company’s effective tax rate and Federal cash tax payments for the nine months ended September 30, 2026.
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