v3.26.3
Income Taxes
 9 Months Ended
Sep. 30, 2026
Income Tax Disclosure [Abstract]  
Income Taxes
Note 5. Income Taxes
Three Months Ended
September 30,
Nine Months Ended
September 30,
2026202520262025
(Dollars in millions)
Tax expense$22 $25 $70 $63 
Effective tax rate18.5 %24.5 %19.3 %21.8 %

The effective tax rates for the three months ended September 30, 2026 and 2025 were 18.5% and 24.5%, respectively. The effective tax rates for the nine months ended September 30, 2026 and 2025 were 19.3% and 21.8%, respectively.

The change in the effective tax rate for the three and nine months ended September 30, 2026 compared to the prior period is primarily related to a decrease in U.S. taxes on international operations during 2026, the global mix of earnings from year-to-year, a one-time benefit related to the revaluation of deferred tax assets in China during 2025, and deductions related to employee share-based compensation during 2026.

The effective tax rate for the three months ended September 30, 2026 was lower than the U.S. federal statutory rate of 21% primarily because of the global mix of earnings, benefits related to research and development expenses, the resolution of income tax audits and the release of audit reserves.

The effective tax rate for the nine months ended September 30, 2026 was lower than the U.S. federal statutory rate of 21% primarily because of the global mix of earnings, benefits related to research and development expenses, deductions related to employee share-based compensation, the resolution of income tax audits and the release of audit reserves.