v3.25.4
INCOME TAXES
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
INCOME TAXES .    INCOME TAXES
The following is a summary of the Company's income tax expense (benefit).
The income before provision for taxes consists of the following:
FOR THE YEARS ENDED DECEMBER 31,
(MILLIONS)
202520242023
United States$171 $671 $828 
Canada429 503 599 
Other2,325 1,372 1,127 
$2,925 $2,546 $2,554 
The provision (benefit) for taxes consists of the following:
FOR THE YEARS ENDED DECEMBER 31,
(MILLIONS)
202520242023
Current
United States$126 $89 $147 
Canada34 (92)65 
Other216 167 113 
Total provision for current tax376 164 325 
Deferred
United States34 60 57 
Canada72 208 31 
Other45 6 4 
Total provision for deferred tax151 274 92 
Provision for income tax
United States160 149 204 
Canada106 116 96 
Other261 173 117 
Total Provision for income tax$527 $438 $417 
The Company's effective income tax rate is different from the Company's federal statutory income tax rate due to the following differences set out below:
FOR THE YEAR ENDED DECEMBER 31,
(MILLIONS)
2025
$%
Income before provision for taxes$2,925 
Federal statutory income tax rate439 15 %
(Reduction) increase in rate resulting from:
United States
International operations subject to different tax rates60 2 %
Stock compensation(43)(1)%
Changes in valuation allowance197 7 %
Other(15)— %
Canada
Provincial tax56 2 %
Other5 — %
United Kingdom42 1 %
Other jurisdictions8 — %
Incentive distributions(78)(3)%
Taxable income attributable to non-controlling interests(59)(2)%
Portion of gains subject to different tax rates(85)(3)%
Effective income tax rate$527 18 %
FOR THE YEARS ENDED DECEMBER 31,
(MILLIONS)
20242023
Combined statutory income tax rate27 %27 %
(Reduction) increase in rate resulting from:
Incentive distributions(3)%(3)%
International operations subject to different tax rates(2)%(4)%
Taxable income attributable to non-controlling interests(1)%(1)%
Portion of gains subject to different tax rates(2)%(2)%
Other(2)%(1)%
Effective income tax rate17 %16 %
A summary of the tax effects of the temporary differences is as follows:
AS AT DECEMBER 31,
(MILLIONS)
202520242023
Assets
Losses (United States)$445 $552 $720 
Losses (Other)6 6 6 
Investment basis differences/net unrealized gains and losses318 28 (83)
Deferred income tax assets before valuation allowance$769 $586 $643 
Valuation allowance(197)— — 
Deferred income tax assets$572 $586 $643 
Liabilities
Investment basis differences/net unrealized gains and losses169 46 40 
Deferred income tax liabilities$169 $46 $40 
Management evaluates the realizability of deferred tax assets by considering, among other factors, projections of future taxable income, beginning with historical results and incorporating assumptions regarding the amount and character of future taxable income. These assumptions require judgment and are consistent with the Company's operating plans and estimates used to manage the business.
As at December 31, 2025, a valuation allowance of $197 million has been recorded against deferred tax assets related to net operating loss carryforwards in the U.S. that are not more likely than not to be utilized. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased.
As at December 31, 2025, the Company has net operating loss carryforwards in the U.S. of approximately $2.1 billion (2024 – $2.6 billion) that expire after 2026.
As at December 31, 2025, the Company has accumulated undistributed earnings generated by certain foreign subsidiaries, which it intends to indefinitely reinvest and have not recorded any deferred taxes with respect to outside tax basis difference on these subsidiaries.
As at December 31, 2025, the Company did not have any material unrecognized tax benefits related to uncertain tax positions.
The Company files its tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by U.S. and other local tax authorities. As of December 31, 2025, certain of the Company’s U.S. and non-U.S. income tax returns for 2018 through 2023 are open to or are under examination.