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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2025

Schedule of Components of Income Tax Expense (Benefit)

The following table presents the components of income tax expense (benefit) for the periods indicated:


	Years Ended December 31,
(In millions)	2025		2024		2023
Current:
Federal	$	375	$	108	$	160
State	96		68		79
Non-U.S.	404		387		317
Total current expense	875		563		556
Deferred:
Federal	(133)		77		(77)
State	(1)		2		(63)
Non-U.S.	45		66		(44)
Total deferred expense (benefit)	(89)		145		(184)
Total income tax expense (benefit)	$	786	$	708	$	372

Schedule of Effective Income Tax Rate Reconciliation

The following table presents a reconciliation of the U.S. federal statutory tax rate to our effective income tax rate for the year ended December 31, 2025 (after adoption of ASU 2023-09):


	Years Ended December 31,
(Dollars in millions)	2025
U.S. federal income tax rate	$	783	21.0	%
Changes from statutory rate:
State and local income taxes, net of federal income tax effect(1)	81		2.2
Foreign tax effects	45		1.2

Effects of cross-border tax laws(2)	7		0.2




Tax Credits(3)	(68)		(1.8)




Nontaxable or nondeductible items	(27)		(0.8)


Changes in unrecognized tax benefits	(35)		(0.9)
Effective tax rate	$	786	21.1	%

(1) State taxes in Massachusetts, New York State and New York City made up the majority (greater than 50%) of the tax effect in this category.

(2) Effects of cross-border tax laws includes the period expense for global intangible low-taxed income.

(3) Business tax credits include research, low-income housing, production and investment tax credits.

The following table presents a reconciliation of the U.S. statutory income tax rate to our effective tax rate based on income before income tax expense for the periods indicated:


	Years Ended December 31,
	2024		2023
U.S. federal income tax rate	21.0	%	21.0	%
Changes from statutory rate:
State taxes, net of federal benefit	1.8		2.4
Tax-exempt income	(1.0)		(1.5)
Business tax credits(1)	(2.0)		(3.6)
Foreign tax differential	1.0		(0.6)

Foreign tax credit (benefits)/ limitations(2)	0.6		(2.0)




Change in Valuation Allowance	(0.5)		(0.2)
Other, net	(0.1)		0.6
Effective tax rate	20.8	%	16.1	%

(1) Business tax credits include research, low-income housing, production and investment tax credits.

(2) Foreign tax credit (benefits)/limitations includes the period expense for global intangible low-taxed income.

Schedule of Deferred Tax Assets and Liabilities

The following table presents significant components of our gross deferred tax assets and gross deferred tax liabilities as of the dates indicated:


	December 31,
(In millions)	2025		2024
Deferred tax assets:
Other amortizable assets	$	176	$	189
Tax credit carryforwards	656		577
Lease obligations	248		214
Deferred compensation	229		111
Restructuring charges and other reserves	166		227
NOL and other carryforwards	154		147
Pension plan	13		21
Foreign currency translation	24		63
Unrealized losses on investment securities, net	52		184
Total deferred tax assets	1,718		1,733
Valuation allowance for deferred tax assets	(198)		(172)
Deferred tax assets, net of valuation allowance	$	1,520	$	1,561
Deferred tax liabilities:
Fixed and intangible assets	$	654	$	634
Investment basis differences	45		47
Right-of-use assets	240		198
Other	33		40
Total deferred tax liabilities	$	972	$	919

Summary of Valuation Allowance

The table below summarizes the deferred tax assets, carryforwards and related valuation allowances recognized as of December 31, 2025:


(In millions)	Deferred Tax Asset		Valuation Allowance		Expiration
Other amortizable assets	$	176	$	(69)	None
Tax credits	656		—		2042-2045
NOLs - Non-U.S.	130		(110)		2026-2042, None
NOLs - U.S.	21		(17)		2026-2041, None
Other carryforwards	2		(2)		None

Schedule of Unrecognized Tax Benefits

The following table presents activity related to unrecognized tax benefits as of the dates indicated:


	December 31,
(In millions)	2025		2024		2023
Beginning balance	$	237	$	237	$	285
Decrease related to agreements with tax authorities	(2)		(22)		(32)
Increase related to tax positions taken during current year	48		36		39
Increase/(Decrease) related to tax positions taken during prior years	23		11		(34)
Decreases related to a lapse of the applicable statute of limitations	(58)		(25)		(21)
Ending balance	$	248	$	237	$	237

Summary of Income Taxes Paid

The table below summarizes income taxes paid for the year ended December 31, 2025 (after adoption of ASU 2023-09):


(In millions)	Year Ended December 31, 2025

U.S. Federal	$	78
U.S. State:

New York State	28
Other	33
Total U.S. State	61
Foreign:
United Kingdom	110
Canada	54
Luxembourg	46
Ireland	36
India	34
Italy	31



Other	144
Total Foreign	455
Total income taxes paid	$	594