Income Taxes |
6 Months Ended |
|---|---|
Jun. 30, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | NOTE 6. _________________ INCOME TAXES For the second quarter of 2026, the Company had an income tax expense of $21 million, consisting of no current income tax expense and a deferred income tax expense of $21 million. This compares to an income tax benefit of $49 million in the second quarter of 2025, consisting of $17 million of current income tax benefit and a deferred income tax benefit of $32 million. The Company received refunds, net of income tax payments, of $2 million during the second quarter of 2026. The effective tax rate for the second quarter of 2026 was - 60% compared to 39% for the second quarter of 2025. The effective tax rate for the second quarter of 2026 is impacted by current year losses with no related tax benefit. This was partially offset by the recognition of previously unrecognized tax benefits. The effective tax rate for second quarter of 2025 was increased by a valuation allowance on tax assets arising from deferred interest expenses as well as other nondeductible expenses. This was partially offset by research and experimentation tax credits and foreign exchange items. Also, the Company recorded a tax expense in the second quarter of 2025 of $5 million pertaining to the reduction of a foreign tax credit claimed in an earlier tax year. For the first six months of 2026, the Company's income tax expense was $21 million, consisting of $1 million of current income tax expense and a deferred income tax expense of $20 million. This compares to an income tax benefit of $46 million in the first six months of 2025, consisting of a current income tax benefit of $16 million and a deferred income tax benefit of $30 million. The Company received refunds, net of income tax payments, of $2 million during the first six months of 2026. The effective tax rate was - 10% compared to 40% in the first six months of 2025. The effective tax rate for the first half of 2026 is impacted by current year losses with no related tax benefit. This was partially offset by the recognition of previously unrecognized tax benefits. The effective tax rate for the first half of 2025 was increased by a valuation allowance on tax assets arising from deferred interest expenses as well as other nondeductible expenses. This was partially offset by research and experimentation tax credits and foreign exchange items. Also, the Company recorded a tax expense of $5 million, in the first half of 2025, pertaining to the reduction of a foreign tax credit claimed in an earlier tax year. In October 2021, the Organization for Economic Co-operation and Development (“OECD”) announced the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting which agreed to a two-pillar framework to address tax challenges arising from digitalization of the economy and profit shifting. In December 2021, the OECD published the Pillar Two - Global Anti-Base Erosion Model Rules (“GloBE Rules”) designed to ensure that multinational enterprises are subject to tax at an effective minimum tax rate of 15% in each jurisdiction where they operate. Although the U.S. has not enacted legislation to adopt GloBE Rules, the foreign countries where the Company has significant operations have already adopted or are in the process of adopting such legislation. The Company has performed an assessment of potential exposure and concluded GloBE Rules did not impact financial results for the first six months of 2026. |