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Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The provision for (benefit from) income taxes consists of the following:
Year Ended December 31,
202520242023
Current:
Federal$— $14 $— 
State15 11 45 
Foreign75 70 43 
Current income tax provision90 95 88 
Deferred:
Federal37 (644)77 
State(32)(211)47 
Foreign(29)(50)67 
Deferred income tax provision (benefit)(24)(905)191 
Provision for (benefit from) income taxes$66 $(810)$279 

Income (loss) before income taxes is comprised of the following:
Year Ended December 31,
202520242023
United States (U.S.)$(1,082)$(2,642)$1,418 
Foreign153 15 496 
Income (loss) before income taxes
$(929)$(2,627)$1,914 
Deferred income tax assets, net is comprised of the following:
As of December 31,
20252024
Deferred income tax assets:
Net tax loss carryforwards $1,853 $983 
Long-term operating lease liabilities840 807 
Tax credits119 405 
Deferred interest expense85 358 
Accrued liabilities and deferred revenue202 157 
Depreciation and amortization30 24 
Provision for doubtful accounts14 19 
Other26 28 
Valuation allowance (a)
(127)(83)
Deferred income tax assets3,042 2,698 
Deferred income tax liabilities:
Operating lease right-of-use assets826 793 
Depreciation and amortization62 74 
Prepaid expenses36 32 
Other13 13 
Deferred income tax liabilities937 912 
Deferred income tax assets, net$2,105 $1,786 
__________
(a)     The valuation allowance as of December 31, 2025 relates to tax loss carryforwards and certain deferred tax assets of $123 million and $4 million, respectively. The valuation allowance as of December 31, 2024 relates to tax loss carryforwards and certain deferred tax assets of $80 million and $3 million, respectively. The valuation allowances will be reduced when and if we determine it is more likely than not that the related deferred income tax assets will be realized.

Deferred income tax liabilities under vehicle programs is comprised of the following:

As of December 31,
20252024
Deferred income tax assets:
Depreciation and amortization$73 $73 
Other10 20 
Deferred income tax assets83 93 
Deferred income tax liabilities:
Depreciation and amortization2,749 2,513 
Other11 22 
Deferred income tax liabilities2,760 2,535 
Deferred income tax liabilities under vehicle programs, net$2,677 $2,442 
As of December 31, 2025, we had U.S. federal net operating loss carryforwards of approximately $6.7 billion. The net operating loss carryforwards have an indefinite utilization period pursuant to the Tax Act. Such net operating loss carryforwards are primarily related to accelerated depreciation of our U.S. vehicles. Currently, we do not record valuation allowances on the majority of our U.S. federal tax loss carryforwards as there are adequate deferred tax liabilities that could be realized within the carryforward period. As of December 31, 2025, we had foreign net operating loss carryforwards of approximately $1.3 billion, the majority of which has an indefinite utilization period.
As of December 31, 2025, we had indefinitely reinvested certain undistributed earnings of foreign subsidiaries for which we have not recognized deferred taxes. Estimating the amount of potential tax is not practicable because of the complexity and variety of assumptions necessary to compute the tax.
The reconciliation between the provision for (benefit from) income taxes at the U.S. federal statutory tax rate and our provision for (benefit from) income taxes and effective tax rate is as follows:
Year Ended December 31,
2025
Amount%
Provision for (benefit from) income taxes at U.S. federal statutory tax rate$(195)21.0 %
State and local income taxes, net of federal tax (a)
(13)1.4 
Foreign tax effects18 (2.0)
Tax credits (b)
263 (28.3)
Effect of cross-border tax laws(12)1.3 
Nontaxable or nondeductible items9 (1.0)
Changes in valuation allowances(1)0.1 
Changes in unrecognized tax benefits(5)0.6 
Other adjustments2 (0.2)
Provision for (benefit from) income taxes and effective tax rate$66 (7.1)%
__________
(a)Primarily California, Florida, Michigan and New York.
(b)For the year ended December 31, 2025, certain previously recognized federal tax credits were reversed, with a corresponding restoration of the related asset basis. In addition, we are monetizing a portion of our available tax credits. See Note 2 – Summary of Significant Accounting Policies – Variable Interest Entities (“VIE”) and Non-Controlling Interests for more information related to the Interpace Ventures transaction.

The reconciliation between the U.S. federal statutory tax rate and our effective tax rate for the years ended December 31, 2024 and 2023 previously disclosed in our Consolidated Financial Statements prior to the adoption of ASU 2023-09, “Improvements to Income Tax Disclosures,” is as follows:

Year Ended December 31,
20242023
U.S. federal statutory tax rate21.0 %21.0 %
Adjustments to reconcile to our effective tax rate:
State and local income taxes, net of federal tax benefits6.0 4.0 
Changes in valuation allowances0.2 — 
Statutory rate differences between foreign and U.S.(0.9)2.8 
Tax credits3.6 (11.7)
Stock-based compensation0.1 (1.1)
Other nontaxable or nondeductible items(0.2)0.7 
Other adjustments1.0 (1.1)
Effective tax rate30.8 %14.6 %
The Organisation for Economic Cooperation and Development (“OECD”) published a proposal for the establishment of a global minimum tax rate of 15% (the “Pillar Two rule”), effective as of fiscal 2024. On January 5, 2026, the OECD released a comprehensive Side-by-Side package with respect to Pillar Two. This new guidance introduces new safe harbors and simplifications for U.S. and other multinational companies which would limit or prevent other countries from imposing tax on the U.S. profits of American companies. We are closely monitoring developments of the Pillar Two rule as the OECD continues to refine its technical guidance and member states implement tax laws and regulations based on Pillar Two proposals. Pillar Two did not have a material impact on our Consolidated Financial Statements for the year ended December 31, 2025.

In July 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted, making permanent key provisions of the Tax Cuts and Jobs Act, including full expensing on qualified property, and modifications to the business interest expense limitation. As a result of this enactment, our deferred tax balances as December 31, 2025 reflect the new law, resulting in the deferral a significant portion of current federal tax over future periods. As our income tax provision includes both current and deferred components, the overall net impact to our Consolidated Statements of Operations is not significant. We are continuing to monitor additional provisions of the OBBBA that become effective through 2027 for potential future impact.

The following is a reconciliation of the gross amount of our unrecognized tax benefits:
202520242023
Balance as of January 1$58 $63 $53 
Additions for tax positions related to current year3 4 5 
Additions for tax positions related to prior years— — 5 
Reductions for tax positions related to prior years(3)(2)— 
Settlements(15)— — 
Statute of limitations(6)(4)(2)
Currency translation adjustments3 (3)2 
Balance as of December 31$40 $58 $63 
We are subject to taxation in the U.S. and various foreign jurisdictions. As of December 31, 2025, the 2007 through 2024 tax years generally remain subject to examination by the federal tax authorities. The 2012 through 2024 tax years generally remain subject to examination by various state and local tax authorities. In significant foreign jurisdictions, the 2017 through 2024 tax years generally remain subject to examination by their respective tax authorities.
Substantially all of the gross amount of unrecognized tax benefits as of December 31, 2025, 2024 and 2023, if recognized, would affect our provision for (benefit from) income taxes. As of December 31, 2025, our unrecognized tax benefits were offset by tax loss carryforwards and other deferred tax assets in the amount of $29 million.

The following table presents our unrecognized tax benefits:
As of December 31,
20252024
Unrecognized tax benefits in current income taxes payable (a)
$— $17 
Unrecognized tax benefits in non-current income taxes payable14 17 
Accrued interest payable on potential tax liabilities (b)
1 47 
__________
(a)Pursuant to the agreements governing the disposition of certain subsidiaries in 2006, we were entitled to indemnification for certain predisposition tax contingencies. As of December 31, 2024, liabilities for unrecognized tax benefits associated with these tax contingencies were included in current income taxes payable within accounts payable and other current liabilities on our Consolidated Balance Sheets.
(b)We recognize potential interest expense related to unrecognized tax benefits within interest expense related to corporate debt, net on the accompanying Consolidated Statements of Operations. Penalties incurred during the years ended December 31, 2025, 2024 and 2023, were not significant and were recognized in the provision for (benefit from) income taxes.
Income tax payments, net of refunds is comprised of the following:
Year Ended December 31,
2025
Federal$14 
State and local
California17 
Illinois(8)
Other state and local2 
Foreign
Australia68 
Canada6 
New Zealand6 
Other foreign16 
Income tax payments, net of refunds$121