v3.26.3
Income Taxes
 9 Months Ended
Sep. 26, 2026
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The provision for income taxes in the accompanying statements of income differs from the provision calculated by applying the statutory federal income tax rate to income before provision for income taxes due to the following:
Nine months ended
(Dollars in millions)September 26, 2026September 27, 2025
U.S. federal statutory tax rate$1,207 21.0 %$1,082 21.0 %
State and local income taxes, net of federal income tax effect72 1.3 %31 0.6 %
Foreign tax effects(955)(16.6)%(145)(2.8)%
Effect of changes in tax laws or rates enacted in the current period— 0.0 %9 0.2 %
Effect of cross-border tax laws592 10.3 %16 0.3 %
Tax credits(140)(2.4)%(180)(3.5)%
Changes in valuation allowances— 0.0 %(138)(2.7)%
Nontaxable or nondeductible items5 0.1 %5 0.1 %
Changes in unrecognized tax benefits38 0.7 %(30)(0.6)%
Other adjustments(228)(4.0)%(258)(5.0)%
Effective tax rate$590 10.3 %$394 7.6 %
During the first quarter of 2026, the company recorded a deferred tax benefit of $175 million resulting from the recognition of tax attributes related to domestication transactions. During the second quarter of 2026, the company recorded a deferred tax benefit of $148 million in jurisdictions where the deferred tax assets are now expected to be realized due to forecasted income. During the third quarter of 2026, the company recorded a deferred tax benefit of $161 million resulting from the recognition of tax attributes related to a domestication transaction. The company also recorded a $171 million tax expense related to the tax gain associated with the sale of the microbiology division that was completed during the quarter.
During the first quarter of 2025, the company recorded a deferred tax benefit of $125 million resulting from the recognition of a tax attribute related to a domestication transaction. During the second quarter of 2025, the company recorded a deferred tax benefit of $153 million related to capital losses generated as part of intra-entity transactions and a $93 million benefit in jurisdictions where the deferred tax assets are now expected to be realized due to forecasted income. During the third quarter of 2025, the company recorded $86 million of tax benefits resulting from tax return reassessments.
The company has operations and a taxable presence in approximately 70 countries outside the U.S. The company's effective income tax rate differs from the U.S. federal statutory rate each year due to certain operations that are subject to tax incentives, state and local taxes, and foreign taxes that are different than the U.S. federal statutory rate.
Unrecognized Tax Benefits
As of September 26, 2026, the company had $0.41 billion of unrecognized tax benefits substantially all of which, if recognized, would reduce the effective tax rate. A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:
(In millions)2026
Balance at beginning of year
$419 
Additions due to acquisitions
8 
Additions for tax positions of current year
10 
Additions for tax positions of prior years
21 
Settlements
(46)
Balance at end of period
$413