Income taxes

12 Months Ended

Dec. 31, 2025

Income Tax Disclosure [Abstract]

Income taxes

14. Income taxes

The summary of the Income before income tax expense for the years ended December 31 was:

in $ millions	2025	2024	2023
Income
U.S.	2,761	3,069	2,729
Non-U.S.	2,044	1,645	1,285
Total income	4,805	4,714	4,014

The summary of the Income tax expense for the years ended December 31 was:

in $ millions	2025	2024	2023
Current tax:
U.S. - Federal	383	466	632
U.S. - State	71	84	67
Non-U.S.	420	355	290
Total current tax expense	874	905	989
Deferred tax:
U.S. - Federal	230	187	(28)
U.S. - State	25	(5)	(12)
Non-U.S.	(88)	(2)	(24)
Total deferred tax expense (benefit)	167	180	(64)
Total income tax expense	1,041	1,085	925

Due to the percentage of global operations subject to tax in the United States, the Company uses the U.S. Federal statutory tax rate in the reconciliation of the effective income tax rate. The reconciliation of the applicable U.S. Federal income tax rate to the effective income tax rate was:

	2025			2024			2023
	$m	%		$m	%		$m	%
U.S. Federal Statutory Tax rate	1,009	21.0	%	990	21.0	%	843	21	%
State and Local Income Taxes, Net of Federal Income Tax Effect (i)	71	1.5	%	47	1.0	%	38	1.0	%
Effects of changes in tax laws or rates enacted in current period	3	0.1	%	–	–	%	–	–	%
Effect of Cross-Border Tax Laws	–	–	%	–	–	%	–	–	%
Foreign Tax Effects:
Ireland
Foreign tax rate differential	(62)	(1.3)	%	(30)	(0.6)	%	(26)	(0.7)	%
Nondeductible items	50	1.0	%	67	1.4	%	48	1.2	%
Other	13	0.3	%	(9)	(0.2)	%	(10)	(0.3)	%
Malta
Tax credits	(234)	(4.9)	%	(281)	(6.0)	%	(259)	(6.5)	%
Changes in valuation allowances	149	3.1	%	174	3.7	%	166	4.1	%
Other	41	0.9	%	52	1.1	%	39	1.0	%
Philippines
Nondeductible impairment of goodwill	–	–	%	–	–	%	74	1.8	%
Other	12	0.3	%	5	0.1	%	(8)	(0.2)	%
Poland	2	–	%	21	0.5	%	3	0.1	%
Other foreign jurisdictions	(27)	(0.6)	%	(12)	(0.3)	%	(11)	(0.3)	%
Tax Credits	(12)	(0.3)	%	(15)	(0.3)	%	(19)	(0.5)	%
Changes in Valuation Allowances	–	–	%	–	–	%	–	–	%
Non-taxable or Nondeductible items	(13)	(0.3)	%	16	0.3	%	(40)	(1.0)	%
Changes in Unrecognized Tax Benefits	39	0.8	%	60	1.3	%	87	2.2	%
Effective income tax rate	1,041	22	%	1,085	23	%	925	23	%

(i)     State taxes in Florida, Michigan, Texas, New Jersey, California, Connecticut, Utah and Oregon made up the majority (greater than 50%) of the tax effect in this category.

The significant components of the deferred tax assets and liabilities as of December 31 were:

in $ millions	2025	2024
Deferred tax assets:
Company retirement benefit plans	–	2
Revaluation of derivative financial instruments to fair value	5	4
Tax losses, credits and interest deduction carryforwards	1,507	1,149
Share-based compensation	40	39
Accrued expenses	345	454
Lease liabilities	423	286
Other	8	–
Total deferred tax assets	2,328	1,934
Less: valuation allowances	(1,336)	(1,059)
Total deferred tax assets after valuation allowances	992	875
Deferred tax liabilities:
Company retirement benefit plans	22	–
Investment in subsidiaries	162	146
Depreciation, depletion and amortization	3,772	3,419
Leased right-of-use assets	401	278
Rolled-over capital gains	26	21
Other	–	15
Total deferred tax liabilities	4,383	3,879
Total net deferred tax liabilities	3,391	3,004

The net deferred tax assets and liabilities that are included in the Consolidated Balance Sheets as of December 31 were:

in $ millions	2025	2024
Deferred income taxes, noncurrent assets	(120)	(101)
Deferred income taxes, noncurrent liabilities	3,511	3,105
Total net deferred tax liabilities	3,391	3,004

As of December 31, 2025, the Company had gross loss carryforwards of $1,485 million related to foreign operations and $57 million of federal gross loss carryforwards and $42 million of state net operating loss carryforwards. $893 million of certain foreign, federal and state loss carryforwards have various expiration dates ranging from 2026 to 2050; $690 million do not expire based on current tax legislation. The Company had gross interest deduction carryforwards of $3,188 million related to foreign operations and $188 million of federal gross interest deduction carryforwards. $88 million of certain interest carryforwards have various expiration dates ranging from 2026 to 2045, $3,287 million do not expire based on current tax legislation.

The summary of the change in valuation allowance as of December 31 was:

in $ millions	2025	2024	2023
Balance as of January 1	1,059	914	737
Acquisitions	(6)	12	–
Provision for income taxes	162	188	151
Foreign currency and other	121	(55)	26
Balance as of December 31	1,336	1,059	914

The Company maintains a valuation allowance on net operating losses and other deferred tax assets if, based on the weight of available evidence, it is more likely than not that some portion, or all, of a deferred tax asset will not be realized. As of December 31, 2025, and December 31, 2024, the Company has a valuation allowance on net deferred tax assets of $1,336 million and $1,059 million, respectively. For the year ended December 31, 2025, the valuation allowance increased due to an increase in interest deduction carryforwards.

A deferred tax liability has been recognized in respect of any undistributed earnings in which the Company is not permanently reinvested. The Company has $17.8 billion of undistributed earnings that are considered permanently reinvested as of December 31, 2025, for which no deferred tax liabilities have been recognized. It is not practicable to estimate the amount of tax that would be paid if there was a distribution of these earnings. Participation exemptions and tax credits are available in the majority of jurisdictions in which the Company operates.

The reconciliation of the changes in the unrecognized tax benefits as of December 31 was:

in $ millions	2025	2024	2023
Balance as of January 1	634	665	576
Increases related to prior periods	9	–	9
Decreases related to prior periods	(54)	(50)	(12)
Increases related to current period	179	99	148
Decreases related to settlements with taxing authorities and lapse of statute of limitations	(66)	(65)	(68)
Foreign currency and other	37	(15)	12
Balance as of December 31	739	634	665

The Company files income tax returns in Ireland, the United States, the United Kingdom, Germany, Canada, and other various foreign jurisdictions and is subject to ongoing examination by tax authorities throughout the world. In general, the Company is no longer subject to significant income tax examinations by tax authorities in the jurisdictions noted for years before 2017. The Company believes that its income tax reserves are adequately maintained taking into consideration both the technical merits of its tax return positions and ongoing developments in its income tax audits. However, the final determination of the Company's tax return positions, if audited, is uncertain and therefore there is a possibility that the outcomes of such events could cause the Company’s estimate to change in the future. No single position is expected to generate a significant increase or decrease to the liability for unrecognized tax benefits within 12 months of the reporting date. As of December 31, 2025, and December 31, 2024, the unrecognized tax benefits that, if recognized, would impact the effective tax rate were $727 million and $589 million, respectively.

The Company’s policy is to accrue interest and penalties related to potential underpayment of income taxes within the provision for income taxes. As of December 31, 2025, and December 31, 2024, the Company had accrued interest of $101 million and $101 million, respectively. As of December 31, 2025, December 31, 2024, and December 31, 2023, the interest and penalties included in Income tax expense was $8 million, $20 million, and $14 million, respectively.

Income tax paid net of (refunds) received, consisted of the following:

in $ millions	2025	2024	2023
Federal	366	553	539
State	95	100	121
Ireland	104	90	88
Poland	70	42	35
Canada	33	79	4
Other jurisdictions	163	96	172
Total taxes paid	831	960	959