Income Taxes Level 1 (Notes) |
6 Months Ended |
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Jun. 30, 2025 | |
| Income Tax Disclosure [Abstract] | |
| Income Tax Disclosure | Income Taxes Income tax expense during interim periods is based on our estimated annual effective income tax rate plus any discrete items, which are recorded in the period in which they occur. Discrete items include, among others, events such as changes in estimates due to the finalization of tax returns, tax audit settlements, expiration of statutes of limitation, and increases or decreases in valuation allowances on deferred tax assets. Our effective tax rate was 25.2% and 25.3% for the three months ended June 30, 2025 and 2024, respectively. Our effective tax rate was 25.7% and 24.0% for the six months ended June 30, 2025 and 2024, respectively. The effective tax rate was higher for the six months ended June 30, 2025 primarily due to less excess tax benefits recognized on the settlement of employee share-based awards. The effective tax rate for the three and six months ended June 30, 2025 was higher than the federal statutory tax rate of 21.0% primarily due to state and foreign tax expense. We actively participate in tax credit equity investments for projects eligible to receive renewable energy tax credits. These investments, accounted for under the equity method, are recorded in Deferred charges and other assets, net of reserves on our Consolidated Balance Sheet. Upon realization, tax credits associated with these investments are recognized as a reduction of tax expense. This reduction is offset by amortization of the investment in proportion to the tax benefits received during the period under the proportional amortization method. During 2025, we recognized investment tax credits and other tax benefits totaling $5.3 million and amortized the equity investment by $5.2 million to reflect the realization of these benefits. This amortization is reflected within the Provision for income taxes in the Consolidated Statement of Operations. The federal statutes of limitations have expired for all tax years prior to 2021. We received a letter from IRS initiating an audit of our 2022 federal income tax return. Various state and foreign jurisdictions are auditing years 2020 through 2023. The outcome of each of these audits cannot be predicted at this time. On July 4, 2025, new U.S. tax legislation (enacted as Public Law No. 119-21) was signed into law, introducing a broad range of changes to the U.S. federal tax code. We are currently assessing the full impact of these changes on our financial statements. Based on our preliminary assessment, we do not expect the legislation to have a material effect on our results of operations or our estimated annual effective tax rate.
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