Income Taxes

9 Months Ended

Sep. 30, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

We computed our 2024 interim tax provision using an estimated annual effective tax rate of (1.9)%, adjusted for discrete items. Our 2024 estimated annual effective tax rate is primarily driven by taxes on non-U.S. operations. The forecasted 2024 tax provision as estimated at September 30, 2024, remained relatively consistent with that estimated in the second quarter of 2024, despite increased forecasted pre-

tax losses. This resulted in a corresponding change in the annualized effective tax rate during the three months ended September 30, 2024. The effective tax rate for the three months ended September 30, 2024, was 0.8% and reflects additional tax benefits to adjust prior quarters' results to the annual effective tax rate. The effective tax rates were 1.8% and (10.8)% for the nine months ended September 30, 2024 and 2023.

As of December 31, 2023, we had recorded valuation allowances of $4,550 primarily for certain domestic deferred tax assets, and certain domestic net operating losses, tax credit and interest carryforwards. To measure the valuation allowance, the Company estimated in what year each of its deferred tax assets and liabilities would reverse using systematic and logical methods to estimate the reversal patterns. Based on these methods, deferred tax liabilities are assumed to reverse and generate taxable income over the next 5 to 10 years while deferred tax assets related to pension and other postretirement benefit obligations are assumed to reverse and generate tax deductions over the next 15 to 20 years. The valuation allowance results from not having sufficient income from deferred tax liability reversals in the appropriate future periods to support the realization of deferred tax assets.

In the third quarter of 2024, we determined that earnings from our non-U.S. subsidiaries are no longer considered to be permanently reinvested. This resulted in a discrete income tax provision of $13 for the three months ended September 30, 2024.

Federal income tax audits have been settled for all years prior to 2021. The Internal Revenue Service is expected to begin the 2021-2023 federal tax audit in the third quarter of 2025. We are also subject to examination in major state and international jurisdictions for the 2010-2023 tax years. We believe appropriate provisions for all outstanding tax issues have been made for all jurisdictions and all open years.