Income Taxes |
3 Months Ended |
|---|---|
Mar. 31, 2026 | |
| Income Taxes | |
| Income Taxes | Note 7—Income Taxes Tax provision and rate—In the three months ended March 31, 2026 and 2025, our effective tax rate was (335.3) percent and (95.8) percent, respectively, based on income or loss before income taxes. In the three months ended March 31, 2026 and 2025, the effect of various discrete period tax items was a net tax benefit of $113 million and a net tax expense of $14 million, respectively. In the three months ended March 31, 2026, such discrete items included changes to operating structures, various uncertain tax positions and valuation allowances. In the three months ended March 31, 2025, such discrete items included changes to various uncertain tax positions and valuation allowances. In the three months ended March 31, 2026 and 2025, our effective tax rate, excluding discrete items, was 192.0 percent and (62.3) percent, respectively, based on income or loss before income taxes. Tax positions and returns—We conduct operations through our various subsidiaries in countries throughout the world. Each country has its own tax regimes with varying nominal rates, deductions and tax attributes that are subject to changes resulting from new legislation, interpretation or guidance. From time to time, as a result of these changes, we may revise previously evaluated tax positions, which could cause us to adjust our recorded tax assets and liabilities. Tax authorities in certain jurisdictions are examining our tax returns and, in some cases, have issued assessments. We intend to defend our tax positions vigorously. Although we can provide no assurance as to the outcome of the aforementioned changes, examinations or assessments, we do not expect the ultimate liability to have a material adverse effect on our condensed consolidated statement of financial position or results of operations; however, it could have a material adverse effect on our condensed consolidated statement of cash flows. Brazil tax investigations—In December 2005, the Brazilian tax authorities began issuing tax assessments with respect to our tax returns for the years 2000 through 2004. In May 2014, the Brazilian tax authorities issued an additional tax assessment for the years 2009 and 2010. We filed protests with the Brazilian tax authorities for the assessments and are engaged in the appeals process, and a portion of two cases were favorably closed. As of March 31, 2026, the remaining aggregate tax assessment, including interest and penalties, was for corporate income tax of BRL 528 million, equivalent to $102 million, and indirect tax of BRL 97 million, equivalent to $19 million. We believe our returns are materially correct as filed, and we are vigorously contesting these assessments. An unfavorable outcome on these proposed assessments could have a material adverse effect on our condensed consolidated statement of financial position, results of operations or cash flows. |