INCOME TAXES |
9 Months Ended |
|---|---|
Sep. 30, 2026 | |
| Income Tax Disclosure [Abstract] | |
| INCOME TAXES | INCOME TAXES An income tax provision of $62 million and $305 million was recorded for the three months and nine months ended September 30, 2026, compared to an income tax provision of $90 million and $145 million for the corresponding periods in 2025. This resulted in an ETR of 20.2% and 19.7% for the three months and nine months ended September 30, 2026, compared to 16.4% and 9.9% for the corresponding periods in 2025. The increase in ETR for the three months and nine months ended September 30, 2026, when compared to the same periods in 2025, was directly impacted by (i) an increase in forecasted pre-tax income in 2026 and (ii) no electric vehicle tax credits in 2026, offset by $44 million of tax benefit resulted from closed audit years recorded in the first quarter of 2026. The Company is subject to the income tax laws of the U.S., its states and municipalities and certain foreign countries. These tax laws are complex and are potentially subject to different interpretations by the taxpayer and the relevant governmental taxing authorities. In establishing a provision for income tax expense, the Company must make judgments and interpretations about the application of these inherently complex tax laws. Actual income taxes paid may vary from estimates depending upon changes in income tax laws, actual results of operations, and the final audit of tax returns by taxing authorities. Tax assessments may arise several years after tax returns have been filed. The Company reviews its tax balances quarterly and, as new information becomes available, the balances are adjusted as appropriate. The Company is subject to ongoing tax examinations and assessments in various jurisdictions. With few exceptions, the Company is no longer subject to federal and non-U.S. income tax examinations by tax authorities for years prior to 2015 and state income tax examinations for years prior to 2010. The Company applies an aggregate portfolio approach whereby income tax effects from AOCI are released only when an entire portfolio (i.e., all related units of account) of a particular type is liquidated, sold or extinguished. The Company had a net deferred tax asset balance of $801 million at September 30, 2026 (consisting of a federal deferred tax asset balance of $600 million and a state deferred tax asset balance of $201 million with respect to jurisdictional netting), compared to a net deferred tax asset balance of $380 million at December 31, 2025 (consisting of a federal deferred tax asset balance of $285 million and a state deferred tax asset balance of $95 million). The $421 million change in the net deferred tax asset for the period ended September 30, 2026 was primarily due to the inclusion of the deferred tax asset of $419 million related to the Webster acquisition. On July 4, 2025, the OBBBA was enacted into law, which the Company has fully incorporated effective for the fiscal year ending 2025. The Company is monitoring the impact of the OBBBA to state and local income tax legislative proposals.
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