v3.25.4
INCOME TAXES (Tables)
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Schedule of Geographic Allocation of Income (Loss) and Provision for (Benefit from) Income Taxes
Geographic Allocation of Income (Loss) and Provision for (Benefit from) Income Taxes 202520242023
(In millions) For the years ended December 31,
Income (loss) from continuing operations before income taxes
Domestic$(217)$(398)$(579)
Foreign417 515 300 
Income (loss) from continuing operations before income taxes$200 $117 $(279)
Current tax expense
Federal$(23)$133 $6 
State and local8 5 5 
Foreign 104 167 80 
Total current tax expense$89 $305 $91 
Deferred tax expense (benefit)
Federal $46 $(103)$20 
State and local5 (25)(22)
Foreign (38)36 (306)
Total deferred tax expense (benefit)$13 $(92)$(308)
Provision for (benefit from) income taxes on continuing operations102 213 (217)
Net income (loss) from continuing operations$98 $(96)$(62)
Schedule of Effective Income Tax Rate Reconciliation
Reconciliation to U.S. Statutory Rate2025
(In millions) For the year ended December 31, Amount Percent
U.S Federal Statutory Tax Rate$42 21.0 %
State and Local Income Taxes, Net of Federal Income Tax Effect 1
10 5.3 
Foreign Tax Effects
China
Foreign Withholding Taxes17 8.4 
Other Adjustments(3)(1.5)
Germany
Enacted Changes in Tax Law or Rates6 3.2 
Other Adjustments9 4.7 
Japan
Statutory Rate Difference7 3.5 
Provision to Return(5)(2.5)
Other Adjustments1 0.6 
Luxembourg
Changes in Valuation Allowance(59)(29.9)
Other Adjustments2 1.1 
Netherlands
Changes in Valuation Allowance7 3.5 
Nontaxable Items(6)(3.0)
Provision to Return(8)(3.9)
Other Adjustments4 2.0 
Switzerland
Statutory Rate Difference(11)(5.6)
Local Tax Effects6 3.1 
Other Adjustments(2)(0.8)
Other Foreign Jurisdictions20 10.1 
Effect of Cross-Border Tax Laws 2
Subpart F19 9.4 
Branch Income8 4.0 
Tax Credits(4)(2.0)
Changes in Valuation Allowance(52)(26.6)
Nontaxable or Nondeductible Items
Disallowed Deductions7 3.4 
Other Permanent Items18 9.0 
Changes in Unrecognized Tax Benefits16 8.0 
Other Adjustments
Deferred Tax Liability on Future Branch Income73 36.9 
Exchange Gains/(Losses) 3
26 13.0 
Reversal of Deferred Tax Liabilities as a Result of Entity Classification Changes(29)(14.7)
Goodwill Step-up(10)(4.8)
Other Adjustments 4
(7)(3.9)
Effective Tax Rate$102 51.0 %
1.State taxes in Michigan and Minnesota make up the majority (greater than 50 percent) of the tax effect in this category.
2.Effect of Cross-Border Tax Laws are presented net of any related foreign tax credits.
3.Principally reflects the impact of foreign exchange gains and losses on net monetary assets for which no corresponding tax impact is realized.
4.Includes impacts of foreign exchange/translation adjustments.
Reconciliation to U.S. Statutory Rate20242023
(In millions) For the years ended December 31,
Statutory U.S. federal income tax rate21.0 %21.0 %
Equity earnings effect0.9 0.1 
Foreign income taxed at rates other than the statutory U.S. federal income tax rate30.0 (11.6)
U.S. tax effect of foreign earnings and dividends34.8 (7.8)
Unrecognized tax benefits(4.6)(2.0)
Acquisitions, divestitures and ownership restructuring activities 1
89.6 116.5 
Exchange gains/losses 2
15.3 1.9 
State and local income taxes(10.8)5.0 
Change in valuation allowance5.3 — 
Goodwill impairments — (50.3)
Stock-based compensation2.1 1.7 
Foreign-derived intangible income (FDII)(7.2)4.1 
Other - net5.7 (0.9)
Effective tax rate182.1 %77.7 %
1.Includes a tax expense of $103 million and a tax benefit of $324 million in connection with internal restructurings involving foreign subsidiaries for the years ended December 31, 2024 and 2023, respectively.
2. Principally reflects the impact of foreign exchange gains and losses on net monetary assets for which no corresponding tax impact is realized.
Schedule of Deferred Tax Assets and Liabilities
Deferred Tax Balances at December 31,20252024
In millions
Deferred tax assets:
Tax losses and credit carryforwards 1
$829 $744 
Lease liability 51 60 
Pension and postretirement benefit obligations16 71 
Other accruals and reserves140 119 
Research and development219 186 
Inventory5 5 
Other – net124 227 
Gross deferred tax assets$1,384 $1,412 
Valuation allowances 1
(664)(748)
Total deferred tax assets$720 $664 
Deferred tax liabilities:
Investments(78)(60)
Unrealized exchange losses, net(32)(36)
Operating lease asset(51)(60)
Property(255)(250)
Intangibles(427)(545)
Total deferred tax liabilities$(843)$(951)
Total net deferred tax liability$(123)$(287)
1.Primarily related to recorded tax benefits and the non-realizability of tax losses and credit carryforwards from operations in the United States, Europe and Asia Pacific.
Schedule of Operating Loss and Tax Credit Carryforwards
Operating Loss and Tax Credit CarryforwardsDeferred Tax Asset
(In millions) As of December 31,20252024
Operating loss carryforwards
Expire within 5 years$11 $5 
Expire after 5 years or indefinite expiration658 591 
Total operating loss carryforwards$669 $596 
Tax credit carryforwards
Expire within 5 years$58 $40 
Expire after 5 years or indefinite expiration102 108 
Total tax credit carryforwards$160 $148 
Total Operating Loss and Tax Credit Carryforwards$829 $744 
Schedule of Gross Unrecognized Tax Benefits
Total Gross Unrecognized Tax Benefits202520242023
In millions
Total unrecognized tax benefits at January 1,$428 $473 $470 
Decreases related to positions taken on items from prior years— (32)(4)
Increases related to positions taken on items from prior years6 17 3 
Increases related to positions taken in the current year22 5 18 
Settlement of uncertain tax positions with tax authorities(5)(21)(10)
Decreases due to expiration of statutes of limitations(9)(5)(9)
Exchange loss (gain)16 (9)5 
Electronics Separation(34)— — 
Total unrecognized tax benefits at December 31, 1
$424 $428 $473 
Total unrecognized tax benefits that, if recognized, would impact the effective tax rate of continuing operations $260 $259 $304 
Total amount of interest and penalties (benefit) recognized in "Provision for (benefit from) income taxes on continuing operations"$5 $3 $8 
Total accrual for interest and penalties associated with unrecognized tax benefits$55 $43 $28 
1.Total unrecognized tax benefits includes $160 million, $165 million and $165 million of benefits related to discontinued operations at December 31, 2025, 2024 and 2023.
Schedule of Tax Years Subject to Examination
Tax years that remain subject to examination for the Company’s major tax jurisdictions are shown below:
Tax Years Subject to Examination by Major Tax Jurisdiction at December 31, 2025
Earliest Open Year
Jurisdiction
Brazil2019
Canada2018
China2014
Denmark2022
Germany2019
Japan2018
The Netherlands2019
Switzerland2020
United States:
Federal income tax 1
2012
State and local income tax2012
1. The U.S. Federal income tax jurisdiction is open back to 2012 with respect to EIDP pursuant to the DWDP Tax Matters Agreement.
The undistributed foreign earnings of foreign subsidiaries and related companies that deemed to be permanently reinvested at December 31, 2025 may still be subject to certain taxes upon repatriation, primarily where foreign withholding taxes apply. It is not practicable to calculate the unrecognized deferred tax liability on undistributed foreign earnings due to the complexity of the hypothetical calculation.
Schedule of Income Taxes Paid
Income taxes paidYear Ended December 31, 2025
U.S. Federal$7 
U.S. State5 
Non-U.S.115 
Total income taxes paid, net$127 
Income taxes paidYear Ended December 31, 2025
Japan$25 
France$16 
China$10 
Switzerland$9