INCOME TAXES |
9 Months Ended |
|---|---|
Sep. 30, 2025 | |
| Income Tax Disclosure [Abstract] | |
| INCOME TAXES | INCOME TAXES. The Company’s income tax provision through March 31, 2024 was prepared based on a separate return basis. Following the Spin-off, the Company's income tax provision is prepared on a stand-alone basis. Our effective tax rate was 39.2% and 29.8% for the three and nine months ended September 30, 2025, respectively. The effective tax rate was higher than the U.S. statutory rate of 21% in both periods primarily due to losses providing no tax benefit in certain jurisdictions and the finalization of the Company's pre-Spin-Off tax attributes that increased the Company's current provision for income taxes, partially offset by an income tax benefit from stock-based compensation. We recorded an income tax benefit on a pre-tax loss with an effective tax rate of 18.9% for the three months ended September 30, 2024. The effective tax rate was lower than the U.S. statutory rate of 21% primarily due to a portion of the pre-tax loss providing no tax benefit in certain jurisdictions. We recorded an income tax expense on pre-tax income with an effective tax rate of 22.4% for the nine months ended September 30, 2024. The effective tax rate was higher than the U.S. statutory rate of 21% primarily due to losses providing no tax benefit in certain jurisdictions, partially offset by a lower effective tax rate on a foreign pre-tax gain from the sale of a portion of Steam Power nuclear activities to Electricité de France S.A. (EDF) which was completed in the second quarter of 2024. The Organization for Economic Co-operation and Development has proposed a global minimum tax of 15% of reported profits (Pillar Two) and many countries have incorporated Pillar Two model rule concepts into their domestic laws. Although the model rules provide a framework for applying the minimum tax, countries may enact Pillar Two slightly differently than the model rules and on different timelines and may adjust domestic tax incentives in response to Pillar Two. We incurred insignificant tax expenses in connection with Pillar Two in the nine months ended September 30, 2025. Based on our assessment of the realizability of our deferred tax assets as of September 30, 2025, we continue to maintain valuation allowances against our deferred tax assets in the U.S. and certain foreign jurisdictions, primarily due to cumulative losses in those jurisdictions. Given the current year profit and anticipated future profitability in the U.S., it is reasonably possible that the continued improvement in our U.S. operations could result in the positive evidence necessary to warrant the release of a significant portion of our U.S. valuation allowance in the fourth quarter of 2025. A release of the valuation allowance would result in the recognition of certain U.S. deferred tax assets and a corresponding benefit in our provision for income taxes in the period the release occurs. On July 4, 2025, the United States enacted House Resolution 1 of the 119th Congress (the Act). The Act did not have a significant impact on our provision for income taxes for the three months ended September 30, 2025, and we do not anticipate a significant impact on our effective tax rate for the full year 2025.
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