The effective tax rate in 2024 decreased to 20.9% from 21.3% in 2023. The change in the effective tax rate was due primarily to tax benefits related to increases in the foreign-derived intangible income (FDII) deduction and increased equity-based compensation deductions, partially offset by an increase in valuation allowance on NOLs and non-deductible executive compensation subject to Section 162(m).

The effective tax rate in 2023 decreased to 21.3% from 23.9% in 2022. The change in the effective tax rate was due primarily to tax benefits related to increases in the foreign-derived intangible income (FDII) deduction and a change in jurisdictional mix of earnings, partially offset by an increase in valuation allowance on foreign tax credits originating from foreign withholding taxes.

The effective tax rate for the year ended December 31, 2024 differs from the federal statutory tax rate of 21% primarily due to state income taxes, valuation allowance and executive compensation subject to Section 162(m), offset by benefits related to untaxed income attributable to noncontrolling interests, earnings in lower tax jurisdictions, the FDII deduction, and equity-based compensation deductions.

The effective tax rate for the year ended December 31, 2023 differs from the federal statutory tax rate primarily due to state income taxes, valuation allowance on foreign tax credit carryovers originating from foreign taxes, partially offset by benefits related to untaxed income attributable to noncontrolling interests, earnings in lower tax jurisdictions, the FDII deduction, and federal business tax credits.

The effective tax rate for the year ended December 31, 2022 differs from the federal statutory tax rate primarily due to state income taxes and a recorded valuation allowance on foreign tax credit carryovers, partially offset by benefits related to income attributable to noncontrolling interests, earnings in lower tax jurisdictions and federal business tax credits.

The Company assesses the realizability of its deferred tax assets each reporting period through an analysis of potential sources of taxable income, including prior year taxable income available to absorb carryback of tax losses, reversals of existing taxable temporary differences, tax planning strategies, and forecasts of taxable income. The Company considers all negative and positive evidence, including the weight of the evidence, to determine if a valuation allowance against deferred tax assets is required. A valuation allowance is recorded against deferred tax assets to reflect the amount of deferred tax assets that is determined to be more-likely-than-not to be realized.

As of December 31, 2024, and December 31, 2023, the Company’s valuation allowance against deferred tax assets was $45.3 million and $34.8 million, respectively. The Company has recorded a valuation allowance against certain tax attributes that the Company has determined are not more-likely-than-not to be realized, including certain foreign net operating loss carryforwards, foreign tax credit carryforwards, and capital loss carryforwards. From December 31, 2023 to December 31, 2024, the Company’s valuation allowance increased by $10.5 million. This increase relates to deferred tax assets recorded for net operating loss carryforwards and foreign tax credit carryforwards. The valuation allowance is recorded because the Company does not expect to have sufficient taxable income and

foreign source income to utilize the net operating loss carryforwards and the foreign tax credit carryforwards before they expire.

As of December 31, 2024, the Company has Net Operating Losses ("NOLs") of $1.7 million, $20.3 million, and $74.2 million for U.S. Federal, U.S. states and foreign jurisdictions, respectively. The utilization of the U.S. federal and U.S. state NOLs are subject to certain annual limitations. Of these NOL amounts, $1.7 million, $8.0 million and $12.9 million in U.S. Federal, U.S. states and foreign jurisdictions, respectively, do not expire. The remaining amounts of NOLs in U.S. states and in foreign jurisdictions will expire if not used between 2025 and 2045.

As of December 31, 2024, the Company has foreign tax credit carryforwards of $33.5 million. The Company has provided a valuation allowance of $33.5 million as the Company considers it is not more likely than not that these credits will be realized. These foreign tax credits start expiring in the year 2029.

At December 31, 2024, and December 31, 2023, there are $28.6 million and $25.1 million of unrecognized tax benefits that if recognized would affect the Company’s effective tax rate.

The Company recognizes interest and penalties related to unrecognized tax benefits as part of its income tax expense. During the years ended December 31, 2024, December 31, 2023, and December 31, 2022, the Company recognized approximately $1 million, $0.5 million, and $0.7 million in interest and penalties, respectively, in the consolidated statements of income. The total amount of interest and penalties accrued in the consolidated balance sheets was $5.6 million, $4.6 million, and $4.1 million as of December 31, 2024, December 31, 2023, and December 31, 2022, respectively.

The Company conducts business globally and, as a result, the Company or one or more of its subsidiaries files income tax returns in the U.S. federal jurisdiction, various U.S. states, and foreign jurisdictions. The Company is subject to examination by tax authorities in several jurisdictions, including jurisdictions where the Company has significant activities, such as Canada, Qatar, Saudi Arabia and the United States. As of December 31, 2024, the Company’s U.S. federal income tax returns for tax years 2021 and forward remain subject to examination. U.S. states and foreign income tax returns remain subject to examination based on varying local statutes of limitations.

The Company estimates that, within 12 months, it may decrease its uncertain tax positions by approximately $7.2 million as a result of concluding various tax audits and closing tax years.