Income Taxes Level 1 (Notes) |
6 Months Ended |
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Jun. 30, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income Tax Disclosure | Income Taxes Income tax expense during interim periods is based on our estimated annual effective income tax rate plus any discrete items, which are recorded in the period in which they occur. Discrete items include, among others, events such as changes in estimates due to the finalization of tax returns, tax audit settlements, expiration of statutes of limitation, and increases or decreases in valuation allowances on deferred tax assets. Our effective tax rate was 25.1% and 25.2% for the three months ended June 30, 2026 and 2025, respectively. Our effective tax rate was 25.1% and 25.7% for the six months ended June 30, 2026 and 2025, respectively. The effective tax rate was lower for the six months ended June 30, 2026 primarily due to a discrete tax benefit from an investment in a renewable energy project recognized in the first quarter of 2026. The effective tax rate for the three and six months ended June 30, 2026 was higher than the federal statutory tax rate of 21.0% primarily due to state and foreign tax expenses. We participate in tax equity investments in renewable energy projects that qualify for federal investment tax credits. These investments are accounted for under the proportional amortization method. Tax credits and other related tax benefits are recognized as a reduction of income tax expense as they are realized, with corresponding amortization of the investment in proportion to the tax benefits received. During the six months ended June 30, 2026, we recognized $52.1 million of investment tax credits and other tax benefits and recorded $49.9 million of amortization related to these investments. The tax credits and related amortization are presented net within the Provision for income taxes in the Consolidated Statement of Operations. As of June 30, 2026, the unamortized balance of renewable energy tax credit investments was $1.1 million included in Deferred charges and other assets. As of December 31, 2025, the unamortized balance of renewable energy tax credit investments was $51.1 million, and unfunded commitments related to these investments totaled $40.8 million. These amounts are included in Deferred charges and other assets and Accounts payable and accrued liabilities, respectively, on the Consolidated Balance Sheet. The federal statutes of limitations have expired for all tax years prior to 2022. Currently, our 2022 federal income tax return is under audit by the IRS, and certain state income tax returns for the years 2022 through 2024 are also being audited. While there are no federal or provincial audits in Canada, years subsequent to 2021 remain open for potential examination. The outcome of each of these audits cannot be predicted at this time.
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