Taxes |
9 Months Ended |
|---|---|
Sep. 30, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Taxes | Note 3. Taxes The Company is subject to taxation in the U.S. and many foreign jurisdictions. The Company's tax positions, including its intercompany transfer pricing policies, are reasonable and consistent with accepted methodologies. The Company is subject to review by taxing authorities for tax years 2005 and thereafter, and those reviews could result in additional tax, interest and penalties. For example, the Indian tax authority (ITA) has claimed that additional income tax applies to transactions between the Company and its Indian subsidiary, and that additional service tax applies to ocean and air imports and exports. The Company maintains that the ITA’s positions are without merit. The Company has successfully defended its positions in India's courts, including a favorable ruling from the Supreme Court of India during the second quarter that dismissed a significant portion of the ITA's claims. If the remaining matters are resolved unfavorably, the Company could recognize additional significant tax expense, including interest and penalties. The Company records liabilities for uncertain tax positions when, despite having supportable positions in its tax return, it concludes that those positions may not be sustained upon examination by tax authorities. To make that judgment, the Company assesses whether the position is more likely than not to be upheld if challenged, including through any related appeals or litigation, based on the technical strength of the position and advice from qualified legal and tax advisors. The Company’s consolidated effective income tax rate was 23.1% and 24.4% for the three and nine months ended September 30, 2026, respectively, compared with 25.2% and 26.6% in the same periods of 2025. The lower effective income tax rates resulted primarily from a greater U.S. tax benefit related to licensing income earned from foreign markets, higher U.S. research and development tax credits and lower state taxes. These benefits were partially offset by $12 million of additional tax expense, for the three and nine months ended September 30, 2026, related primarily to uncertainty surrounding such U.S. research and development tax credits and state tax positions. The Company’s consolidated effective income tax rate for the three and nine months ended September 30, 2026 is higher than the U.S. federal statutory income tax rate of 21% primarily because of taxes on the Company’s international operations, including taxes withheld on certain cross-border payments, higher income tax rates in certain foreign countries, and state taxes. These additional taxes were partially offset by U.S. tax benefits related to licensing income earned from foreign markets, foreign tax credits and U.S. research and development tax credits. |