Income Taxes |
9 Months Ended |
|---|---|
Sep. 30, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | NOTE 6. _________________ INCOME TAXES For the third quarter of 2026, the Company had an income tax benefit of $10 million, consisting of no current income tax expense and a deferred income tax benefit of $10 million. This compares to an income tax expense of $302 million in the third quarter of 2025, consisting of $24 million of current income tax expense and a deferred income tax expense of $278 million. The Company received refunds, net of income tax payments, of $2 million during the third quarter of 2026. The effective tax rate for the third quarter of 2026 was 24% compared to - 2,323% for the third quarter of 2025. The effective tax rate for the third quarter of 2026 is impacted by current year losses with no related tax benefit and foreign exchange items. The effective tax rate for third quarter of 2025 was mainly impacted by the recognition of a full valuation allowance against the Company's net U.S. deferred tax assets. Following its quarterly assessment, management concluded that cumulative three-year losses in the U.S. and other negative evidence outweighed positive evidence supporting realization of these assets. In each interim quarter, the Company updates its estimate of the annual effective tax rate and, if the estimated annual tax rate changes, makes a cumulative adjustment in that quarter. For both the third quarters of 2026 and 2025, the effective tax rates were impacted by such cumulative adjustments arising from updates to the estimated annual effective tax rate. For the first nine months of 2026, the Company's income tax expense was $11 million, consisting of $1 million of current income tax expense and a deferred income tax expense of $10 million. This compares to an income tax expense of $256 million in the first nine months of 2025, consisting of a current income tax expense of $8 million and a deferred income tax expense of $248 million. The Company received refunds, net of income tax payments, of $4 million during the first nine months of 2026. The effective tax rate was - 4% compared to -198% in the first nine months of 2025. The effective tax rate for the first nine months of 2026 is impacted by current year losses with no related tax benefit and foreign exchange items. The effective tax rate for the first nine months of 2025 was mainly impacted by the recognition of a full valuation allowance against the Company's net U.S. deferred tax assets. Following its quarterly assessment, management concluded that cumulative three-year losses in the U.S. and other negative evidence outweighed positive evidence supporting realization of these assets.
Pillar Two - Global Anti-Base Erosion model Rules ("GloBE Rules") 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 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 such legislation. The Company has performed an assessment of potential exposure and concluded GloBE Rules did not impact financial results for the first nine months of 2026. |