INCOME TAXES

9 Months Ended

Sep. 30, 2025

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

Our effective income tax rates for the nine months ended September 30, 2025 and 2024 are as follows:

	Nine Months Ended September 30,
	2025		2024
Effective Tax Rate	25.3	%	28.9	%

The lower effective tax rate for the nine months ended September 30, 2025 was primarily due to the release of unrecognized tax benefits upon expiration of statutes of limitations in various jurisdictions and the favorable impact to our deferred tax expense due to the enactment of future income tax rate reductions, as well as the unfavorable 2024 tax impacts of the 2024 Transformation Initiative pre-tax charges, which did not repeat in 2025.

The effective tax rate for the nine months ended September 30, 2025 differs from the Bermuda statutory rate due to various items that impacted the effective rate both favorably and unfavorably. We recorded unfavorable impacts for earnings in jurisdictions where the statutory rate is higher than the Bermuda statutory rate and for changes in the valuation allowance. These adjustments were primarily offset by the net favorable adjustments for decreases in unrecognized tax benefits.

For the nine months ended September 30, 2025, the effect of the Organization for Economic Cooperation and Development’s Pillar Two framework, which imposes, among other items, a minimum tax rate of 15%, resulted in incremental tax expenses as compared to the same period in 2024. The incremental increase did not have a significant impact on our condensed consolidated financial statements for the nine months ended September 30, 2025.

On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted in the U.S. The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act of 2017, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation. The incremental impact of OBBBA did not have a significant impact on our condensed consolidated financial statements for the nine months ended September 30, 2025.

During the three months ended September 30, 2025, the German Tax Authorities (“GTA”) issued a preliminary position related to the establishment of our European headquarters in Basel, Switzerland in 2016, which when resolved, could have a material impact on our results of operations and cash flows in future periods. We are fully engaged in ongoing discussions with the GTA and continue to work towards resolutions on certain matters. We believe that our estimated provision for this matter recorded at September 30, 2025, is appropriate.