XML 28 R17.htm IDEA: XBRL DOCUMENT v3.24.3
Income Taxes
 9 Months Ended
Sep. 30, 2024
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Effective Tax Rates
Our quarterly provision for income taxes is measured using an annual effective tax rate, adjusted for discrete items within the periods presented.
Our effective tax rates are as follows:
Three Months Ended September 30, Nine Months Ended September 30,
2024202320242023
Effective Tax Rate25.5%23.5%23.5%22.2%
Our effective tax rates for the three-and-nine months ended September 30, 2024 were higher than the prior year’s comparable periods primarily due to the mix of non-U.S. earnings.
Our effective tax rates for the three-and-nine months ended September 30, 2024 were higher than the statutory U.S. federal tax rate of 21% primarily due to the mix of non-U.S. earnings.
The Organization for Economic Co-operation and Development (“OECD”) has proposed a global minimum tax of 15% of reported profits (“Pillar 2”) that has been agreed upon by over 140 member jurisdictions including the United States. Pillar 2 addresses the risks associated with profit shifting to entities in low tax jurisdictions. We have adopted Pillar 2 and the impact of this adoption on our business was approximately $2 million.
The Tax Matters Agreement, among other things, governs our and SpinCo’s respective rights, responsibilities and obligations after the Separation with respect to tax liabilities and benefits (including any taxes imposed that are attributable to the failure of the Distribution and certain related transactions to qualify as a transaction that is tax-free for U.S. federal income tax purposes), tax attributes, the preparation and filing of tax returns, the control of audits and other tax proceedings and other matters regarding taxes. Although enforceable as between the parties, the Tax Matters Agreement will not be binding on the Internal Revenue Service or other tax authorities.
As of September 30, 2024 and December 31, 2023, we had gross unrecognized tax benefits of $18.2 million and $19.3 million, respectively included in “Other liabilities” in our Unaudited Consolidated and Condensed Balance Sheets.