Income Taxes |
9 Months Ended |
|---|---|
Sep. 30, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes The Company's provision for income taxes is determined by applying the estimated annual effective tax rate to income or loss from recurring operations and adjusting for the effects of any discrete income tax items specific to the period. The Company updates its estimate of the annual effective tax rate each quarter and makes cumulative adjustments if its estimated annual tax rate is expected to change. The Company’s effective tax rate may be subject to fluctuation during the year as new information is obtained, which may affect the assumptions used to estimate the annual effective tax rate, including factors such as the mix of forecasted pre-tax earnings in the various jurisdictions in which the Company operates, any valuation allowance against deferred tax assets, the recognition and derecognition of tax benefits related to uncertain tax positions and changes in or the interpretation of tax laws in jurisdictions where the Company conducts business. The Company had a provision for income taxes of $37 million in the three months ended September 30, 2026, as a result of earnings in various jurisdictions, largely offset by the release of valuation allowance against a portion of its U.S. federal and state deferred income tax assets and unrealized loss on equity and other investments. The Company had a provision for income taxes of $257 million in the nine months ended September 30, 2026, as a result of earnings in various jurisdictions, partially offset by the release of valuation allowance against a portion of its U.S. federal and state deferred income tax assets. Valuation allowance At each reporting date, the Company assesses whether its deferred tax assets are more likely than not to be realized, weighing all available positive and negative evidence. During the three months ended September 30, 2026, the Company concluded that a portion of its U.S. federal and state deferred tax assets is now more likely than not to be realized. The main positive evidence was sustained profits of its U.S. operations and projections of future taxable income. As a result, the Company released $63 million of valuation allowance as a discrete tax benefit in the period. The Company continues to maintain a valuation allowance against the net deferred tax assets in the United States that are capital in nature, due to lack of positive evidence to meet the more-likely-than-not standard for recognition. The Company had a provision for income taxes of $44 million and $129 million in the three and nine months ended September 30, 2025, respectively, as a result of earnings in various jurisdictions, partially offset by unrealized loss on equity and other investments. Tax examinations and uncertain tax positions The Company continues to be subject to review and audit by tax authorities around the world, which may lead to adjustments to our tax liabilities. In 2025, we received a proposed assessment from the Canada Revenue Agency ("CRA") related to the Company’s transfer pricing for the year ending December 31, 2020. During the three months ended September 30, 2026, the CRA notified us that they intend to reassess us for additional income taxes of $24 million, plus interest for the year ending December 31, 2020 based on the proposed assessment received in 2025. The Company's 2021 to 2026 tax years remain open to examination. If the CRA reassesses us under the same basis for those years, the Company could be subject to additional income taxes that may be material. We disagree with the proposed assessment and intend to defend our position vigorously. The Company has evaluated this matter under its accounting policy for uncertain tax positions and has not recorded a liability as it believes it is more likely that the Company's position will be sustained. While we believe that our tax position is appropriate, the final determination and timing of resolution of the above matter, and any other tax audits or litigation cannot be predicted with certainty. We continue to monitor the progress of tax audits with tax authorities each reporting period. Changes in recognition or measurement are recorded in the period in which new information becomes available.
|