INCOME TAXES

6 Months Ended

Jun. 30, 2026

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The Company’s quarterly income tax provision is measured using an estimate of its consolidated annual effective tax rate, adjusted in the current period for discrete income tax items, within the periods presented. The Company’s effective tax rate was 28.0% and 28.7% for the three months ended June 30, 2026 and 2025, respectively, and 25.2% and 27.1% for the six months ended June 30, 2026, and 2025, respectively. The decrease in the effective tax rate between the periods was primarily due to the increase in windfall tax benefit for vested shares in the current year. The difference between the effective tax rate and the statutory U.S. federal income tax rate of 21.0% for the three and six months ended June 30, 2026 and 2025 is due to the windfall tax benefit for vested shares partially offset by nondeductible permanent items, taxes on foreign earnings in jurisdictions that have higher tax rates, and state taxes.

As of June 30, 2026, the Company’s deferred tax assets included a valuation allowance of $105 primarily related to certain net operating loss, capital loss, and tax credit carryforwards of the Company’s foreign subsidiaries. The factors used to assess the likelihood of realization were the past performance of the related entities, forecasts of future taxable income, future reversal of existing taxable temporary differences, and available tax planning strategies that could be implemented to realize the deferred tax assets. The ability or failure to achieve the forecasted taxable income in these entities could affect the ultimate realization of deferred tax assets.

As of June 30, 2026, the Company had gross federal, state, and foreign net operating loss carryforwards of approximately $1, $20, and $67, respectively, foreign capital loss carryforwards of $217, and foreign credit carryforwards of $39. The federal net operating losses can be carried forward indefinitely. The state net operating losses have carryforward periods of five to twenty years and begin to expire in 2029. The foreign attributes generally have carryforward periods of twenty years, which begin to expire in 2026, or can be carried forward indefinitely, subject to utilization rules.

The Company’s liability for unrecognized tax benefits is recorded within other noncurrent liabilities in the condensed consolidated balance sheets and recognizes interest and penalties accrued related to unrecognized tax benefits in the income tax provision in the condensed consolidated statements of operations. As of June 30, 2026 and December 31, 2025, the total gross unrecognized tax benefits were $9. The Company accrued gross interest and penalties as of June 30, 2026 and December 31, 2025 of $4. During the three and six months ended June 30, 2026 and 2025, the Company recognized net interest expense of less than $1 for all periods.

If all of the Company’s unrecognized tax benefits as of June 30, 2026 were recognized, $12 would impact the Company’s effective tax rate.

The Company files income tax returns in the U.S. federal jurisdiction, and various state, local, and foreign jurisdictions. As of June 30, 2026, with few exceptions, neither the Company nor its subsidiaries are subject to examination prior to tax year 2015. There are various other audits in state and foreign jurisdictions.

On July 4, 2025, the “One Big Beautiful Bill Act” was enacted into law. The legislation includes several changes to federal tax law including permanent extension of certain expiring Tax Cuts and Jobs Act provisions and modifications to US taxation of foreign activity. Certain provisions are effective for 2026. The Company has evaluated the impact of the legislation and incorporated the applicable tax provisions into its condensed consolidated financial statements for the current reporting period.