v3.25.4
INCOME TAXES (Tables)
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Schedule of Income Tax Expense (Benefit)
Earnings before income taxes and the provision for income taxes are presented in the following table.
Year Ended December 31,
(in millions)202520242023
Earnings (loss) before income taxes:
U.S.1
$(177)$(303)$(316)
Non-U.S.701 842 1,307 
Total$524 $539 $991 
Provision for income taxes:   
Current:   
Federal2
$(1)$(18)$(1)
State(3)1 8 
Foreign2
326 284 342 
Total current expense322 267 349 
Deferred:
Federal(76)(198)(85)
State(7)(5)— 
Foreign(50)47 25 
Total deferred benefit(133)(156)(60)
Total provision for income taxes$189 $111 $289 
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1 In 2023, the U.S. loss before income taxes included the realized and unrealized loss on debt and equity securities of $174 million that was primarily related to the Company’s investment in Wolfspeed convertible debt securities that was sold during the year.
2 In accordance with ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”, which requires withholding tax expense to be reflected in the jurisdiction in which the tax is imposed, the Company reclassified $45 million and $43 million of withholding tax expense for 2024 and 2023, respectively, from U.S. current tax expense to foreign current tax expense.
Schedule of Effective Income Tax Rate Reconciliation
The reconciliation of the tax provision at the U.S. federal statutory rate to income tax expense is presented in the following table.
Year Ended December 31,
(in millions)202520242023
U.S. federal statutory tax rate$110 21.0 %$114 21.0 %$209 21.0 %
State and local income taxes1
(10)(1.9)— — 6 0.6 
Enactment of new tax laws— — (9)(1.7)— — 
Effect of cross-border tax laws
Foreign-derived intangible income— — (11)(2.0)(23)(2.3)
Global intangible low-taxed income36 6.9 24 4.5 19 1.9 
Net tax on remittance of foreign earnings 1 0.2 (17)(3.2)(10)(1.0)
Other14 2.7 1 0.2 11 1.1 
Tax credits
Foreign tax credits(48)(9.2)(47)(8.7)(40)(4.0)
Research and development credit(10)(1.9)(26)(4.8)(34)(3.4)
Changes in valuation allowances(6)(1.1)32 5.9 39 3.9 
Nontaxable or nondeductible items
Intercompany transaction gain(6)(1.1)(15)(2.8)(61)(6.1)
Other14 2.7 9 1.7 5 0.5 
Other adjustments
Realization of basis differences(40)(7.6)(13)(2.4)1 0.1 
Other2 0.4 13 2.4 (6)(0.6)
Foreign tax effects
China
Effect of rates different than statutory21 4.0 4 0.7 18 1.8 
Withholding tax37 7.1 33 6.1 52 5.2 
Net tax on remittance of foreign earnings(6)(1.1)(6)(1.1)(21)(2.1)
Impairment of goodwill— — 94 17.5 (1)(0.1)
Tax holiday (39)(7.4)(45)(8.4)(35)(3.5)
Enhanced research and development deduction(24)(4.6)(29)(5.4)(35)(3.5)
Changes in valuation allowances18 3.4 — — — — 
Other(7)(1.3)8 1.5 (6)(0.6)
Germany
Effect of rates different than statutory28 5.3 (7)(1.3)1 0.1 
Impairment of goodwill61 11.4 32 6.1 — — 
State and local income taxes(5)(1.0)14 2.6 2 0.2 
Other27 5.2 (16)(3.0)20 2.0 
Italy
Changes in valuation allowances(2)(0.4)14 2.6 — — 
Other7 1.3 6 1.1 7 0.7 
Korea
Withholding tax13 2.5 14 2.6 13 1.3 
Impairment of goodwill— — 18 3.3 — — 
Other8 1.5 (6)(1.1)6 0.6 
Mexico
Intercompany transaction gain— — — — (16)(1.6)
Other15 2.9 (5)(0.9)19 1.9 
France
Changes in valuation allowances1 0.2 (2)(0.4)96 9.7 
Other1 0.2 — — (6)(0.6)
Luxembourg
Changes in valuation allowances— — — — 37 3.7 
Other(3)(0.6)3 0.6 (3)(0.3)
Other foreign jurisdictions1 0.2 31 5.8 31 3.1 
Changes in unrecognized tax benefits(20)(3.8)(99)(18.4)(6)(0.6)
Income tax expense$189 36.1 %$111 20.6 %$289 29.1 %
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1 State taxes in Mississippi (2025), Illinois and Kentucky (2024 & 2023) comprise the majority (greater than 50%) of the tax effect in that category.
Schedule of Unrecognized Tax Benefits Roll Forward
A roll forward of the Company’s total gross unrecognized tax benefits is presented below:
(in millions)202520242023
Balance, January 1$95 $161 $172 
Additions based on tax positions related to current year7 9 15 
Reductions for closure of tax audits and settlements(1)— (5)
Reductions for tax positions of prior years(37)(1)(11)
Reductions for lapse in statute of limitations— (67)(10)
Translation adjustment9 (7)— 
Balance, December 31$73 $95 $161 
Schedule of Tax Jurisdiction The Company is no longer subject to income tax examinations by tax authorities in its major tax jurisdictions as follows:
Tax jurisdictionYears no longer subject to auditTax jurisdictionYears no longer subject to audit
U.S. Federal2021 and priorLuxembourg2020 and prior
China2019 and priorMexico2019 and prior
France2021 and priorPoland2019 and prior
Germany2018 and priorSouth Korea2019 and prior
Hungary2019 and priorUnited Kingdom2021 and prior
Japan2023 and prior
Schedule of Deferred Tax Assets (Liabilities)
The components of deferred tax assets and liabilities consist of the following:
December 31,
(in millions)20252024
Deferred tax assets:
Net operating loss and capital loss carryforwards$320 $305 
Research and development capitalization332 291 
Employee compensation77 45 
Other comprehensive loss28 — 
Warranty33 30 
Tax credits106 67 
Other86 116 
Total deferred tax assets$982 $854 
Valuation allowance(360)(325)
Net deferred tax asset$622 $529 
Deferred tax liabilities:  
Goodwill and intangible assets(88)(100)
Unremitted foreign earnings(88)(95)
Fixed assets(55)(107)
Other comprehensive gain— (35)
Total deferred tax liabilities$(231)$(337)
Net deferred taxes$391 $192 
Schedule of Income Tax Geographical Information
Cash paid for income taxes, net of refunds is presented in the following table:
Year Ended December 31,
(in millions)
202520242023
 U.S. state $1 $10 $7 
 U.S. federal — 50 47 
Total foreign371 346 308 
 China 105 96 91 
 Korea 42 47 41 
 Poland 35 20 30 
 Spain 33 32 30 
 Mexico 31 46 20 
 Germany 23 6 23 
 India 23 18 15 
 Other foreign79 81 58 
 Total $372 $406 $362 
Year Ended December 31,
(in millions)202520242023
OPERATING ACTIVITIES OF CONTINUING OPERATIONS
Net earnings$335 $399 $695 
Net loss from discontinued operations— (29)(7)
Net earnings from continuing operations335 428 702 
Adjustments to reconcile net earnings from continuing operations to net cash provided by operating activities from continuing operations:
Depreciation and tooling amortization653 604 515 
Intangible asset amortization66 69 67 
Restructuring expense, net of cash paid36 6 66 
Stock-based compensation expense66 62 58 
Loss on sales of assets9 — — 
Loss (gain) on sales of businesses2 6 (5)
Gain on debt extinguishment— (10)(28)
Asset impairments624 646 29 
Impairment of investment16 — — 
Costs to exit charging business 32 — — 
Change in accounting method— (29)— 
Unrealized and realized (gain) loss on equity and debt securities(3)1 174 
Deferred income tax benefit(133)(156)(44)
Other non-cash adjustments3 8 (25)
Adjustments to reconcile net earnings from continuing operations to net cash provided by operating activities from continuing operations1,371 1,207 807 
Retirement plan contributions(24)(45)(19)
Changes in assets and liabilities, excluding effects of acquisitions, divestitures and foreign currency translation adjustments:
Receivables2 143 (482)
Inventories105 31 (72)
Prepayments and other current assets32 (18)(3)
Accounts payable and accrued expenses(207)(292)375 
Prepaid taxes and income taxes payable(17)(40)(20)
Other assets and liabilities51 (32)109 
Net cash provided by operating activities from continuing operations$1,648 $1,382 $1,397 
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the year for:
Interest$133 $121 $126 
Income taxes, net of refunds$372 $406 $362 
Non-cash investing transactions:
Period end accounts payable related to property, plant and equipment purchases$116 $111 $148