Income Taxes (Tables)

12 Months Ended

Dec. 31, 2025

Income Tax Disclosure [Abstract]

Reconciliation of the U.S. federal statutory rate to effective rate

Reconciliation of the U.S. federal statutory tax rate to effective tax rate:

(Millions of dollars)	2025
Taxes computed at U.S. statutory rates	$	154	21.0	%
Foreign tax effects:
Brazil
Statutory tax rate difference between Brazil and United States	8		1.1	%
Other	8		1.1	%
United Kingdom
Changes in valuation allowances	23		3.1	%
Luxembourg
Changes in valuation allowances	(19)		(2.6)	%
Other foreign jurisdictions	42		5.7	%
Effect of cross-border tax laws
Branch taxation	(13)		(1.7)	%
Foreign tax credits (withholding taxes)	(20)		(2.8)	%
Other cross-border	6		0.8	%
Other adjustments	4		0.6	%
Provision for income taxes and effective rate	$	193	26.3	%

Reconciliation of the U.S. federal statutory tax rate to effective tax rate:

(Millions of dollars)	2024				2023
Taxes computed at U.S. statutory rates	$	112	21.0	%	$	160	21.0	%
(Decreases) increases in taxes resulting from:
State income tax, net of federal tax(1)	1		0.2	%	5		0.5	%
Non-U.S. subsidiaries taxed at other than the U.S. rate	(14)		(2.6)	%	21		2.8	%
Valuation allowances	1		0.2	%	(14)		(1.8)	%
Tax law change for currency translation	(224)		(42.0)	%	—		—	%
Tax loss on divestiture of a non-U.S. subsidiary	48		9.0	%	—		—	%
Dividend withholding tax & indefinite reinvestment change	2		0.4	%	30		4.0	%
Foreign currency translation taxed at non-U.S. subsidiaries	8		1.5	%	(10)		(1.3)	%
Provision for income taxes	$	(66)	(12.4)	%	$	192	25.2	%

(1) Excludes amount included in Tax law change for currency translation line item.

Components of the Provision for income taxes

The components of the Provision for income taxes for the years ended December 31, were as follows: 

(Millions of dollars)
Current income tax provision:	2025		2024		2023
U.S. Federal	$	(20)	$	117	$	36
Non-U.S.	143		109		150
U.S. State	(2)		2		3
	121		228		189
Deferred income tax provision (benefit):
U.S. Federal	72		(283)		33
Non-U.S.	(2)		9		(31)
U.S. State	2		(20)		1
	72		(294)		3
Total Provision for income taxes	$	193	$	(66)	$	192

Components of Profit before income taxes

The components of Profit before income taxes for the years ended December 31, were as follows: 

(Millions of dollars)	2025		2024		2023
U.S.	$	376	$	173	$	384
Non-U.S.	358		360		376
Total	$	734	$	533	$	760

Schedule of income taxes paid

In accordance with the guidance in ASU 2023-09, net income tax and related interest paid in 2025 to the following jurisdictions were as follows:

(Millions of dollars)
U.S. Federal	$	104
U.S. State	1
Non-U.S.(1)
Australia	42
Brazil	26
Canada	22
Other	41
Net income tax and related interest paid	$	236

(1) Includes federal, state and local jurisdictions within each country.

Deferred income tax assets and liabilities

The amounts of deferred income taxes at December 31, included in the following lines in our Consolidated Statements of Financial Position were: 

(Millions of dollars)	2025		2024
Assets:
Other assets	$	133	$	114
Liabilities:
Other liabilities	(402)		(330)
Deferred income taxes, net	$	(269)	$	(216)

Our consolidated deferred income taxes consisted of the following components as of December 31: 

(Millions of dollars)
Deferred income tax assets:	2025		2024
Allowance for credit losses	$	80	$	77
Tax carryforwards	136		122
Revenue timing differences	19		19
	235		218
Deferred income tax liabilities:
Capital assets, including lease basis differences	(438)		(367)
Undistributed profits of non-U.S. subsidiaries	(11)		(15)
	(449)		(382)
Valuation allowance for deferred income tax assets	(57)		(51)
Other, net	2		(1)
Deferred income taxes, net	$	(269)	$	(216)

Schedule of unrecognized tax benefits

A reconciliation of the beginning and ending amounts of gross unrecognized income tax benefits for uncertain income tax positions, including positions impacting only the timing of income tax benefits was as follows: 

(Millions of dollars)	2025		2024		2023
Reconciliation of unrecognized income tax benefits(1):
Balance at beginning of year	$	134	$	119	$	127
Additions for income tax positions related to current year	—		15		—
Additions for income tax positions related to prior year	4		—		—
Reductions for income tax positions related to prior year	—		—		(2)
Reductions for income tax positions related to settlements	—		—		(6)
Balance at end of year	$	138	$	134	$	119
Amount that, if recognized, would impact the effective tax rate	$	138	$	134	$	119

(1) Foreign currency translation amounts are included within each line as applicable.