Income Taxes |
9 Months Ended |
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Sep. 30, 2025 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Note 7 – Income Taxes We compute our quarterly income tax expense/(benefit) by using a forecasted annual effective tax rate and adjust for any discrete items arising during the quarter. We recorded an income tax expense/(benefit) of $158 million and $244 million for the three and nine months ended September 30, 2024, respectively, and $(4.0) billion and $(4.3) billion for the three and nine months ended September 30, 2025, respectively. During the three and nine months ended September 30, 2024, the income tax expense was primarily driven by the current tax on our earnings and the deferred U.S. tax impact related to our investments in Aurora, Didi, and Grab. During the three and nine months ended September 30, 2025, the income tax benefit was primarily driven by the release of our valuation allowance on the Netherlands’ deferred tax assets, offset by tax expense on our earnings. During the nine months ended September 30, 2025, the amount of gross unrecognized tax benefits increased by $668 million, of which approximately $327 million of unrecognized tax benefits, if recognized, would impact the effective tax rate. The remaining $341 million of unrecognized tax benefits would not impact the effective tax rate due to the valuation allowance against certain deferred tax assets. We are subject to taxation in the U.S. and various state and foreign jurisdictions. We are also under routine examination by federal, various state and foreign tax authorities. We believe that adequate amounts have been reserved in these jurisdictions. To the extent we have tax attribute carryforwards, the tax years in which the attribute was generated may still be adjusted upon examination by the federal, state or foreign tax authorities to the extent utilized in a future period. For our major tax jurisdictions, the tax years 2008 through 2025 remain open; the major tax jurisdictions are the U.S., Australia, Netherlands, and the United Kingdom (“UK”). An estimate of changes to unrecognized tax benefits recorded as of September 30, 2025, that are reasonably possible to occur within the next 12 months cannot be made. In the event we experience an ownership change within the meaning of Section 382 of the Internal Revenue Code (“IRC”), our ability to utilize net operating losses, tax credits, and other tax attributes may be limited. The most recent analysis of our historical ownership changes was completed through September 30, 2025. Based on the analysis, we do not anticipate a current limitation on the tax attributes. We regularly assess the need for a valuation allowance against our deferred tax assets. In making that assessment, we consider both positive and negative evidence related to the likelihood of realization of the deferred tax assets to determine, based on the weight of all available evidence, whether it is more-likely-than-not that some or all of the deferred tax assets will be realized. Based on all available positive and negative evidence, we continue to maintain a valuation allowance against the California R&D credits, as we believe it is not more-likely-than-not to be realized, as we expect R&D tax credit generation to exceed our ability to use these credits in future periods. A significant portion of our historical valuation allowance was related to deferred tax assets in the Netherlands. Realization of these deferred tax assets is dependent on future pre-tax earnings. In evaluating the recoverability of these deferred tax assets as of September 30, 2025, we considered all available evidence, both positive and negative. As of September 30, 2025, we are in a 12-quarter cumulative income position based on the Netherlands’ pre-tax book income adjusted for permanent book-to-tax differences. The 12-quarter cumulative income position is considered significant positive evidence that is both objective and verifiable. The historical income position provides us evidence to place greater reliance on projections of future profit as a source of income. Furthermore, current-year profitability and corresponding positive taxable income in the Netherlands, along with projections of future profit, provides strong positive evidence for the realization of our deferred tax assets in the Netherlands. Based on all available evidence, including the objective and verifiable positive evidence as described above and anticipated future earnings, we concluded it is more-likely-than-not that our Netherlands’ deferred tax assets will be realizable. Accordingly, we released $4.9 billion of our Netherlands valuation allowance during the quarter ended September 30, 2025.We will continue to monitor the need for a valuation allowance against our deferred tax assets on a quarterly basis. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the United States. The legislation includes significant provisions, such as permanent extensions and modifications of certain provisions of the Tax Cuts and Jobs Act and modifications to the U.S. international tax system. The OBBBA contains multiple effective dates, with certain provisions taking effect in 2025 and 2026. We have evaluated the OBBBA enacted during the quarter and included its impact within our Q3 2025 financial statements. We will continue to evaluate the full impact of these legislative changes as additional supplemental guidance becomes available.
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