Income Taxes

9 Months Ended

Sep. 30, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The effective tax rate on Net income was 20.9% and 22.8% for the three and nine months ended September 30, 2024, respectively. The effective tax rate on Net income was 16.6% and 17.1% for the three and nine months ended September 30, 2023, respectively.

For the three and nine months ended September 30, 2024, the quarter-to-date tax rate was primarily driven by the geographical distribution of income and certain discrete items. The year-to-date tax rate was primarily driven by the geographical distribution of income and certain discrete items, including the favorable impacts of share-based payments offset by the unfavorable impact of other discrete items.

For the three and nine months ended September 30, 2023, the quarter-to-date tax rate was primarily driven by the geographical distribution of income and certain discrete items, including the tax benefit from the release of a valuation allowance due to a change in judgement about the realizability of deferred tax assets. The year-to-date tax rate was primarily driven by the geographical distribution of income and certain discrete items, including the tax benefits associated with the release of a valuation allowance, share-based payments, and the anticipated sale of certain assets and liabilities classified as held for sale.

Ireland, the U.K., and many E.U. member states, among others, have enacted legislation to implement the global minimum tax that are consistent with the OECD’s proposed Pillar Two tax regime. There remains significant uncertainty as to how the proposed Pillar Two tax regime and the OECD’s past and potentially future Pillar Two guidance will ultimately apply to the Company. The Company is actively monitoring developments in this area and continues to evaluate the guidance and the potential impacts this may have on its global effective tax rate, results of operations, cash flows, and financial condition in 2024 and future periods.