INCOME TAXES |
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Jun. 30, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES | INCOME TAXES A reconciliation between the amount of reported income tax expense and the amount computed by multiplying income before income taxes by the statutory federal tax rate is presented below:
The One Big Beautiful Bill Act (OBBBA) was enacted on July 4, 2025, resulting in significant changes to the U.S. federal tax code. We are currently evaluating the implications of the legislation, but we do not believe it will have a material impact on current year tax expense. Taxable income and current tax liability will be reduced due to the reinstatement of 100% bonus depreciation and changes to business interest deduction limitations. Under section 740 of the Accounting Standards Codification, the effects of the tax law changes are recognized in the period of enactment, which will be the three months ending September 30, 2025. Income before income taxes for the three months ended June 30, 2025 and 2024 was $642 million and $587 million, respectively, and $1.407 billion and $3.671 billion for the six months ended June 30, 2025 and 2024, respectively. Our provision for income taxes during interim reporting periods is calculated by applying an estimate of the annual effective tax rate to “ordinary” income or loss (pre-tax income or loss excluding unusual or infrequently occurring discrete items) for the reporting period. In calculating “ordinary” income, non‑taxable income available to noncontrolling interests was deducted from pre-tax income. During the six months ended June 30, 2025, we recorded an income tax benefit of $6 million to decrease the valuation allowance, including an increase of $1 million related to interest expense carryforwards and a decrease of $7 million related to a change in realizability of deferred tax assets. During the six months ended June 30, 2024, we recorded an income tax benefit of $178 million to decrease the valuation allowance, including a decrease of $194 million for utilization of interest expense carryforwards primarily due to gains from sales of facilities, and an increase of $16 million related to state interest expense carryforwards. There were no adjustments to our estimated liabilities for uncertain tax positions during the six months ended June 30, 2025. The total amount of unrecognized tax benefits as of June 30, 2025 was $71 million, of which $69 million, if recognized, would affect our effective tax rate and income tax benefit. Our practice is to recognize interest and penalties related to income tax matters in income tax expense in our condensed consolidated statements of operations. Approximately $2 million of interest and penalties related to accrued liabilities for uncertain tax positions are included for the six months ended June 30, 2025. Total accrued interest and penalties on unrecognized tax benefits at June 30, 2025 were $10 million.
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