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INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2025

Income before income taxes consisted of the following (in millions):


Year Ended December 31,	2025		2024		1	2023		1
United States	$	5,678	$	2,499		$	1,991
International	10,320		10,587			10,961
Total	$	15,998	$	13,086		$	12,952

1The Company reclassified income before income taxes related to its Puerto Rico operations in 2024 and 2023 from United States to International to align with the jurisdictional disaggregation requirements of ASU 2023‑09.

Schedule of income tax expense (benefit)

Income taxes consisted of the following (in millions):


	United States		State and Local		International		Total
2025
Current	$	86	$	178	$	2,080	$	2,344
Deferred	220		123		174		517
2024
Current	$	324	$	143	$	1,981	$	2,448
Deferred	(254)		(134)		377		(11)
2023
Current	$	83	$	129	$	2,039	$	2,251
Deferred	(135)		(78)		211		(2)

Schedule of net income tax payments

Net income tax payments after the prospective adoption of ASU 2023-09, as described in Note 1, consisted of the following (in millions):


Year Ended December 31,	2025
United States — federal1	$	1,291
United States — state and local	127
International:
Brazil	238
India	265
Mexico	280
Other foreign	672
Total income taxes paid, net of refunds	$	2,873

1The Company’s U.S. federal payments were reduced by foreign tax credits, general business credits and prior year overpayments. These general business credits include tax credits related to the Company’s investments in limited partnerships constructing, owning and operating alternative energy generation facilities in 2025.

Reconciliation of the statutory U.S. federal tax rate and effective tax rates

The following table reconciles the income tax provision with the amount calculated using the 21.0% U.S. federal statutory rate applied to pretax income, reflecting the adoption of ASU 2023-09 (amounts in millions):


	Year Ended December 31, 2025
	Amount		Percent
Statutory U.S. federal tax rate	$	3,360	21.0	%
State and local income taxes — net of federal benefit1	203		1.3
Foreign tax effects:
Ireland
Tax rate differential	(172)		(1.1)
Other	192		1.2
Puerto Rico
Tax rate differential2	(253)		(1.6)

Other	30		0.2
Other jurisdictions	320		2.0
Effect of cross-border tax laws:


U.S. tax on foreign branches2	167		1.1
Subpart F	(315)		(2.0)
Other	(92)		(0.6)
Tax credits	(176)		(1.1)


Change in unrecognized tax benefits	(204)		(1.3)


Other:
Equity income or loss	(222)		(1.4)
Other	23		0.2
Effective tax rate	$	2,861	17.9	%

1State taxes in California, Florida and Minnesota comprised greater than 50% of the tax effect in this category.

2This tax rate differential is offset in the U.S. tax on foreign branches line item, which reflects the full U.S. income tax expense of the same amount on income earned in Puerto Rico. The U.S. tax on foreign branches line item also includes impacts for other U.S. branches.

The following table provides the disclosures required before adopting ASU 2023-09 and reconciles our effective tax rate with the U.S. federal tax rate:


Year Ended December 31,	2024			2023
Statutory U.S. federal tax rate	21.0	%		21.0	%
State and local income taxes — net of federal benefit	1.1			1.1
Earnings in jurisdictions taxed at rates different from the statutory U.S. federal tax rate	1.0		1	(0.3)
Equity income or loss	(2.6)			(2.1)


Excess tax benefits on stock-based compensation	(0.5)			(0.3)
Other — net	(1.4)			(2.0)		2
Effective tax rate	18.6	%		17.4	%

1Includes net tax expense of $161 million (or a 1.2% impact on our effective tax rate) related to agreed-upon tax issues with certain foreign jurisdictions.

2Includes a net tax benefit of $118 million (or a 0.9% impact on our effective tax rate) related to domestic provision to return adjustments, as well as for various discrete tax items. Also includes a tax benefit of $88 million (or a 0.7% impact on our effective tax rate) associated with the change in the Company’s indefinite reinvestment assertion for our Philippines and Bangladesh bottling operations.

As of December 31, 2025, we have not recorded incremental income taxes for additional outside basis differences in our investments in foreign subsidiaries, as these amounts continue to be indefinitely reinvested in foreign operations.

Schedule of Unrecognized Tax Benefits Roll Forward

A reconciliation of the changes in the gross amount of unrecognized tax benefits is as follows (in millions):


Year Ended December 31,	2025		2024		2023
Balance of unrecognized tax benefits at beginning of year	$	880	$	929	$	926
Increase related to prior period tax positions	19		33		2
Decrease related to prior period tax positions	(46)		(52)		(25)
Increase related to current period tax positions	31		30		32

Decrease related to settlements with taxing authorities	—		(57)		—
Decrease due to lapse of the applicable statute of limitations	(13)		—		(2)

Effect of foreign currency translation	(14)		(3)		(4)
Balance of unrecognized tax benefits at end of year	$	857	$	880	$	929

Deferred tax assets and liabilities

The tax effects of temporary differences and carryforwards that give rise to deferred tax assets and liabilities consisted of the following (in millions):


December 31,	2025		2024
Deferred tax assets:
Property, plant and equipment	$	28	$	23
Goodwill and intangible assets	2,204		1,133
Equity method investments (including net foreign currency translation adjustments)	293		503
Derivative financial instruments	403		332
Other liabilities	1,020		2,650
Benefit plans	428		483
Net operating loss, and other carryforwards	534		874
Other	604		325
Gross deferred tax assets	5,514		6,323
Valuation allowances	(388)		(485)
Total deferred tax assets	$	5,126	$	5,838
Deferred tax liabilities:
Property, plant and equipment	$	(869)	$	(777)
Goodwill and intangible assets	(1,571)		(1,750)
Equity method investments (including net foreign currency translation adjustments)	(1,649)		(1,649)
Derivative financial instruments	(459)		(877)
Other liabilities	(228)		(443)
Benefit plans	(454)		(441)
Other1	(1,096)		(1,051)
Total deferred tax liabilities	$	(6,326)	$	(6,988)
Net deferred tax assets (liabilities)	$	(1,200)	$	(1,150)

1Includes deferred tax associated with timing differences related to the IRS Tax Litigation Deposit. Refer to Note 12.

Summary of Valuation Allowance

An analysis of our deferred tax asset valuation allowances is as follows (in millions):


Year Ended December 31,	2025		2024		2023
Balance at beginning of year	$	485	$	396	$	424

Additions	42		141		28
Deductions	(139)		(52)		(56)
Balance at end of year	$	388	$	485	$	396