v3.25.4

INCOME TAXES (Tables) | 12 Months Ended
--- | ---
Dec. 31, 2025
Income Tax Disclosure [Abstract] |
Schedule of Components of (Losses) Earnings Before Income Taxes | The components of our earnings before income taxes for the last three fiscal years consisted of:
(in millions) | 2025 |  | 2024 |  | 2023
U.S. | $ | 2,021 |  |  | $ | 1,717 |  |  | $ | 2,113 |
Non-U.S. | 1,373 |  |  | 1,434 |  |  | 1,265 |
| $ | 3,394 |  |  | $ | 3,151 |  |  | $ | 3,378 |
Schedule of Provision (Benefit) for Income Taxes | Our (provision) benefit for income taxes for the last three fiscal years consisted of:
(in millions) | 2025 |  | 2024 |  | 2023
Current | -U.S. Federal | $ | (409) |  |  | $ | (447) |  |  | $ | (431) |
| -U.S. State | (70) |  |  | (124) |  |  | (158) |
| -Non-U.S. | (252) |  |  | (282) |  |  | (249) |
|  | (731) |  |  | (853) |  |  | (838) |
Deferred | -U.S. Federal | 8 |  |  | 125 |  |  | 94 |
| -U.S. State | 4 |  |  | 19 |  |  | 16 |
| -Non-U.S. | (74) |  |  | (67) |  |  | 433 |
|  | (62) |  |  | 77 |  |  | 543 |
|  | $ | (793) |  |  | $ | (776) |  |  | $ | (295) |
Schedule of Unrecognized Tax Benefits Reconciliation | The following table reconciles our unrecognized tax benefit balance for each year from the beginning of 2023 to the end of 2025:
(in millions) | Amount
Unrecognized tax benefit at beginning of 2023 | $ | 255 |
Change attributable to tax positions taken in prior years | (90) |
Change attributable to tax positions taken during the current period | 16 |
Decrease attributable to settlements with taxing authorities | (9) |
Unrecognized tax benefit at year-end 2023 | 172 |
Change attributable to tax positions taken in prior years | (4) |
Change attributable to tax positions taken during the current period | 17 |
Decrease attributable to settlements with taxing authorities | (2) |
Unrecognized tax benefit at year-end 2024 | 183 |
Change attributable to tax positions taken in prior years | 1 |
Change attributable to tax positions taken during the current period | 16 |
Decrease attributable to lapse of statute of limitations | (106) |
Unrecognized tax benefit at year-end 2025 | $ | 94 |
Schedule of Deferred Tax Assets and Liabilities | The following table presents the tax effect of each type of temporary difference and carry-forward that gave rise to significant portions of our deferred tax assets and liabilities as of year-end 2025 and year-end 2024:
(in millions) | At Year-End 2025 |  | At Year-End 2024
Deferred Tax Assets |  |  |
Employee benefits | $ | 289 |  |  | $ | 302 |
Net operating loss carry-forwards | 982 |  |  | 1,046 |
Accrued expenses and other reserves | 134 |  |  | 153 |
Tax credits | 64 |  |  | 62 |
Loyalty Program | 343 |  |  | 313 |
Deferred income | 114 |  |  | 114 |
Lease liabilities | 255 |  |  | 239 |
Interest limitation | 106 |  |  | 123 |
Property and equipment | 29 |  |  | 15 |
Other | 47 |  |  | 36 |
Deferred tax assets | 2,363 |  |  | 2,403 |
Valuation allowance | (1,011) |  |  | (1,070) |
Deferred tax assets after valuation allowance | 1,352 |  |  | 1,333 |
Deferred Tax Liabilities |  |  |
Intangibles | (584) |  |  | (477) |
Right-of-use assets | (245) |  |  | (223) |
Other | (32) |  |  | (64) |
Deferred tax liabilities | (861) |  |  | (764) |
Net deferred taxes | $ | 491 |  |  | $ | 569 |
Schedule of Reconciliation of the U.S. Statutory Tax Rate to Effective Income Tax Rate | The following table reconciles the U.S. statutory tax rate to our effective income tax rate for the year ended December 31, 2025, as required by ASU 2023-09 (see “New Accounting Standards Adopted” caption in Note 2 for more information):
| 2025
($ in millions) | Amount |  | Percent
U.S. statutory tax rate | $ | 713 |  |  | 21.0 | %
Federal |  |  |
Effect of cross-border tax laws |  |  |
Foreign Tax Credits | (41) |  |  | (1.2) |
Other | 17 |  |  | 0.5 |
Other | (24) |  |  | (0.7) |
State and local income tax, net of federal tax benefit (1) | 95 |  |  | 2.8 |
Non-U.S. tax effects |  |  |
Canada |  |  |
Effect of cross-border tax laws | 37 |  |  | 1.1 |
Luxembourg |  |  |
Changes in valuation allowance | (56) |  |  | (1.6) |
Nontaxable or nondeductible items | 76 |  |  | 2.2 |
Other Non-U.S. jurisdictions | 105 |  |  | 3.1 |
Changes in unrecognized tax benefits | (129) |  |  | (3.8) |
Effective rate | $ | 793 |  |  | 23.4 | %
(1) State and local taxes in California, Maryland, and New York make up the majority (greater than 50%) of the tax in this category. The following table reconciles the U.S. statutory tax rate to our effective income tax rate for the years ended December 31, 2024 and 2023, prior to the adoption of ASU 2023-09:
| 2024 |  | 2023
U.S. statutory tax rate | 21.0 | % |  | 21.0 | %
U.S. state income taxes, net of U.S. federal tax benefit | 2.4 |  |  | 2.8 |
Non-U.S. income | 1.6 |  |  | 0.3 |
Change in valuation allowance | (0.9) |  |  | (5.8) |
Change in uncertain tax positions | 0.4 |  |  | (2.3) |
Excess tax benefits related to equity awards | (1.0) |  |  | (0.8) |
U.S. tax on foreign earnings | 1.0 |  |  | 1.1 |
Intellectual property restructuring | 0.0 |  |  | (7.9) |
Other, net | 0.1 |  |  | 0.3 |
Effective rate | 24.6 | % |  | 8.7 | %
Schedule of Income Taxes Paid (Net of Refunds Received) | The following table presents income taxes paid (net of refunds received) for the year ended December 31, 2025, as required by ASU 2023-09:
(in millions) | 2025
U.S. Federal | $ | 496 |
U.S. State | 156 |
Non-U.S. |
Switzerland | 126 |
Other jurisdictions | 292 |
Total cash paid | $ | 1,070 |

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