Income Taxes |
6 Months Ended |
|---|---|
Jun. 30, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | For the three months ended June 30, 2026, we recorded an income tax provision of $224 million on pre-tax income of $1.09 billion, or an effective tax rate of 20.5%, compared to an income tax provision of $143 million on pre-tax income of $635 million, or an effective tax rate of 22.4%, for the three months ended June 30, 2025. For the six months ended June 30, 2026, we recorded an income tax provision of $392 million on pre-tax income of $1.94 billion, or an effective tax rate of 20.2%, compared to an income tax provision of $229 million on pre-tax income of $1.07 billion, or an effective tax rate of 21.3%, for the six months ended June 30, 2025. Our income tax provision for the three and six months ended June 30, 2025 included $21 million of income tax expense related to an increase in our unrecognized tax benefits resulting from ongoing tax audits, which increased our effective tax rate for the three and six months ended June 30, 2025 by 3.4 percentage points and 2.0 percentage points, respectively. Our effective tax rate is impacted by earnings attributable to the noncontrolling interests as our consolidated income tax provision does not include a tax provision on the earnings attributable to the noncontrolling interests. Our effective tax rate for the three months ended June 30, 2026 of 20.5%, which is based on pre-tax income of $1.09 billion, including $142 million of earnings attributable to the noncontrolling interests, would be 3.0 percentage points higher if based on pre-tax income exclusive of the $142 million of earnings attributable to the noncontrolling interests. Our effective tax rate for the three months ended June 30, 2025 of 22.4%, which is based on pre-tax income of $635 million, including $106 million of earnings attributable to the noncontrolling interest, would be 4.5 percentage points higher if based on pre-tax income exclusive of the $106 million of earnings attributable to the noncontrolling interests. Our effective tax rate for the six months ended June 30, 2026 of 20.2%, which is based on pre-tax income of $1.94 billion, including $203 million of earnings attributable to the noncontrolling interests, would be 2.4 percentage points higher if based on pre-tax income exclusive of the $203 million of earnings attributable to the noncontrolling interests. Our effective tax rate for the six months ended June 30, 2025 of 21.3%, which is based on pre-tax income of $1.07 billion, including $145 million of earnings attributable to the noncontrolling interests, would be 3.4 percentage points higher if based on pre-tax income exclusive of the $145 million of earnings attributable to the noncontrolling interests. Noncurrent Income Tax-related Assets As of June 30, 2026 and December 31, 2025, other assets on our consolidated balance sheets include income tax-related assets of $886 million and $654 million, respectively, which primarily relate to transfer pricing matters. For tax years after 2011, certain of our Canadian subsidiaries were accepted for consideration under the bilateral settlement provisions of the U.S.-Canada tax treaty by the United States and Canadian competent authorities for transfer pricing matters. In connection with these ongoing transfer pricing matters, the Company has income tax-related assets consisting primarily of a long-term receivable for tax refunds, for which the Company has a corollary liability for unrecognized tax benefits, and income tax deposits with Canadian taxing authorities made in 2022 and in the first half of 2026. Unrecognized tax benefits In the three months ended June 30, 2026, we recorded an increase to unrecognized tax benefits of $24 million of tax and related accrued interest of $13 million associated with a tax position arising from an examination by the Internal Revenue Service. If recognized, $11 million of the unrecognized tax benefits would impact the effective tax rate.
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