Income Taxes

6 Months Ended

Jun. 30, 2025

Income Tax Disclosure [Abstract]

Income Taxes

(11) Income Taxes

Our effective income tax rates were 23.4% and 23.0% during the three-month periods ended June 30, 2025, and 2024, respectively, and 23.4% and 22.0% during the six-month periods ended June 30, 2025, and 2024, respectively. The increase in our effective tax rate during the six months ended June 30, 2025, as compared with the comparable period in 2024, was primarily due to a $10 million unfavorable change in tax benefit from employee share-based payments, net of the impact of executive compensation limitations pursuant to IRC section 162(m).

On July 4, 2025, the One Big Beautiful Bill Act (“the Act”), which includes a broad range of tax reform provisions, was signed into law in the United States and we continue to assess its impact. We currently do not expect the Act to have a material impact on our estimated annual effective tax rate in 2025.

As of January 1, 2025, our unrecognized tax benefits were approximately $2 million. The amount, if recognized, that would favorably affect the effective tax rate is approximately $2 million. During the six months ended June 30, 2025, changes to the estimated liabilities for uncertain tax positions (including accrued interest) relating to tax positions taken during prior and current periods did not have a material impact on our financial statements.

We recognize accrued interest and penalties associated with uncertain tax positions as part of the tax provision. As of June 30, 2025, we have less than $1 million of accrued interest and penalties. The U.S. federal statute of limitations remains open for 2021 and subsequent years. Foreign and U.S. state and local jurisdictions have statutes of limitations generally ranging from 3 to 4 years. The statute of limitations on certain jurisdictions could expire within the next twelve months. It is reasonably possible that the amount of uncertain tax benefits will change during the next 12 months, however, it is anticipated that any such change, if it were to occur, would not have a material impact on our results of operations.

We operate in multiple jurisdictions with varying tax laws. We are subject to audits by any of these taxing authorities. We believe that adequate accruals have been provided for federal, foreign and state taxes.