Income Taxes

9 Months Ended

Sep. 30, 2025

Income Tax Disclosure [Abstract]

Income Taxes

(11) Income Taxes

Our effective income tax rates were 23.7% and 22.1% during the three-month periods ended September 30, 2025, and 2024, respectively, and 23.5% and 22.0% during the nine-month periods ended September 30, 2025, and 2024, respectively. The increase in our effective tax rates during the three and nine-months ended September 30, 2025, as compared with the comparable periods in 2024, was primarily due to unfavorable changes in tax benefit from employee share-based payments, net of the impact of executive compensation limitations pursuant to IRC section 162(m), amounting to $3 million and $14 million, respectively.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”), which includes a broad range of corporate income tax law changes, was signed into law in the United States. The OBBBA includes law changes related to bonus depreciation, the expensing of domestic research costs, certain U.S. international tax rules and other modifications. There is no material impact on our estimated annual effective tax rate in 2025. The majority of the tax law changes will take effect starting in 2026.

As of January 1, 2025, our unrecognized tax benefits were approximately $2 million. During the nine months ended September 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 September 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.