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Income Taxes | 12 Months Ended
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Dec. 31, 2025
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Income tax expense (benefit) attributable to continuing operations for the years ended December 31, 2025, 2024 and 2023, consists of the following (in millions):
| 2025 |  | 2024 |  | 2023
Current provision (benefit): |  |  |  |  |
Federal | $ | 138 |  |  | $ | 357 |  |  | $ | 235 |
State | 41 |  |  | 103 |  |  | 96 |
Foreign | 141 |  |  | 109 |  |  | 96 |
Total current provision | $ | 320 |  |  | $ | 569 |  |  | $ | 427 |
Deferred provision (benefit): |  |  |  |  |
Federal | $ | (23) |  |  | $ | (183) |  |  | $ | (193) |
State | 8 |  |  | (41) |  |  | (73) |
Foreign | (40) |  |  | 17 |  |  | (4) |
Total deferred provision | (55) |  |  | (207) |  |  | (270) |
Total provision for income taxes | $ | 265 |  |  | $ | 362 |  |  | $ | 157 |
The provision for income taxes is based on pre-tax income from continuing operations, which is as follows for the years ended December 31, 2025, 2024 and 2023 (in millions):
| 2025 |  | 2024 |  | 2023
United States | $ | 864 |  |  | $ | 920 |  |  | $ | 330 |
Foreign | 312 |  |  | 377 |  |  | 332 |
Total | $ | 1,176 |  |  | $ | 1,297 |  |  | $ | 662 |
Total income tax expense (benefit) attributable to continuing and discontinued operations for the years ended December 31, 2025, 2024 and 2023, is allocated as follows (in millions):
| 2025 |  | 2024 |  | 2023
Tax expense (benefit) per statements of earnings (loss) | $ | 265 |  |  | $ | 362 |  |  | $ | 157 |
Tax expense (benefit) on income from discontinued operations | — |  |  | (1,062) |  |  | (301) |
Change in fair value of net investment hedges | (168) |  |  | 91 |  |  | (176) |
Foreign currency translation adjustments | — |  |  | — |  |  | 40 |
Share of equity method investment | 49 |  |  | (11) |  |  | — |
Other components of other comprehensive earnings (loss) | (28) |  |  | 8 |  |  | 20 |
Total income tax expense (benefit) allocated to other comprehensive earnings | (147) |  |  | 88 |  |  | (116) |
Total income tax expense (benefit) | $ | 118 |  |  | $ | (612) |  |  | $ | (260) |
A reconciliation of the federal statutory income tax rate to the Company's effective income tax rate for the years ended December 31, 2025, 2024 and 2023, after the adoption of ASU 2023-09, is as follows:
|  | 2025 |  | 2024 |  | 2023
|  | Amount |  | Percent |  | Amount |  | Percent |  | Amount |  | Percent
U.S. Federal statutory tax rate |  | $ | 247 |  |  | 21.0 | % |  | $ | 272 |  |  | 21.0 | % |  | $ | 139 |  |  | 21.0 | %
State and local income taxes, net of federal income tax effect (a) |  | 39 |  |  | 3.3 |  |  | 48 |  |  | 3.7 |  |  | 28 |  |  | 4.2 |
Foreign tax effects |  |  |  |  |  |  |  |  |  |  |  |
India |  |  |  |  |  |  |  |  |  |  |  |
Withholding tax |  | 12 |  |  | 1.0 |  |  | 24 |  |  | 1.8 |  |  | 16 |  |  | 2.4 |
Other |  | 4 |  |  | 0.3 |  |  | 4 |  |  | 0.3 |  |  | 1 |  |  | 0.2 |
Hong Kong |  |  |  |  |  |  |  |  |  |  |  |
Nontaxable interest |  | — |  |  | — |  |  | (10) |  |  | (0.8) |  |  | (10) |  |  | (1.5) |
Other |  | — |  |  | — |  |  | (3) |  |  | (0.2) |  |  | (3) |  |  | (0.4) |
Bermuda |  |  |  |  |  |  |  |  |  |  |  |
Statutory rate difference between Bermuda and U.S. |  | (13) |  |  | (1.1) |  |  | — |  |  | — |  |  | — |  |  | — |
Other foreign jurisdictions |  | 26 |  |  | 2.2 |  |  | 38 |  |  | 2.9 |  |  | 22 |  |  | 3.3 |
Effect of cross-border tax laws |  |  |  |  |  |  |  |  |  |  |  |
Global intangible low-taxed income |  | 18 |  |  | 1.5 |  |  | 14 |  |  | 1.1 |  |  | 7 |  |  | 1.1 |
Foreign-derived intangible income |  | (28) |  |  | (2.4) |  |  | (30) |  |  | (2.3) |  |  | (30) |  |  | (4.5) |
Other |  | 14 |  |  | 1.2 |  |  | 4 |  |  | 0.3 |  |  | — |  |  | — |
Tax credits |  |  |  |  |  |  |  |  |  |  |  |
Research and development credits |  | (15) |  |  | (1.2) |  |  | (15) |  |  | (1.2) |  |  | (12) |  |  | (1.8) |
Foreign tax credits |  | (39) |  |  | (3.3) |  |  | — |  |  | — |  |  | — |  |  | — |
Other |  | — |  |  | — |  |  | — |  |  | — |  |  | (7) |  |  | (1.1) |
Changes in valuation allowances |  | 6 |  |  | 0.5 |  |  | — |  |  | — |  |  | — |  |  | — |
Nontaxable or nondeductible items |  |  |  |  |  |  |  |  |  |  |  |
Tax loss (benefit) from stock-based compensation |  | 17 |  |  | 1.4 |  |  | 15 |  |  | 1.2 |  |  | 16 |  |  | 2.4 |
Other |  | 1 |  |  | 0.1 |  |  | 1 |  |  | 0.1 |  |  | 1 |  |  | 0.2 |
Changes in unrecognized tax benefits |  | 10 |  |  | 0.9 |  |  | (3) |  |  | (0.2) |  |  | (1) |  |  | (0.2) |
Other adjustments |  |  |  |  |  |  |  |  |  |  |  |
Return to provision |  | (17) |  |  | (1.4) |  |  | — |  |  | — |  |  | (14) |  |  | (2.1) |
Changes in capital losses |  | (15) |  |  | (1.3) |  |  | — |  |  | — |  |  | — |  |  | — |
Other |  | (2) |  |  | (0.2) |  |  | 3 |  |  | 0.2 |  |  | 4 |  |  | 0.6 |
Effective income tax rate |  | $ | 265 |  |  | 22.5 | % |  | $ | 362 |  |  | 27.9 | % |  | $ | 157 |  |  | 23.8 | %
(a)The jurisdictions that make up the majority (greater than 50%) of the tax effect in this category include New York City, New Jersey, California, and Florida for 2025; Florida, New York, California, Illinois, and New York City for 2024; and Florida, California, New York, Illinois, and New York City for 2023. The significant components of deferred income tax assets and liabilities as of December 31, 2025 and 2024, consist of the following (in millions):
| 2025 |  | 2024
Deferred income tax assets: |  |  |
Net operating loss carryforwards | $ | 490 |  |  | $ | 364 |
Capital loss carryforwards | 136 |  |  | 220 |
Employee benefit accruals | 97 |  |  | 115 |
Equity method investment | 363 |  |  | — |
Other deferred tax assets | 292 |  |  | 170 |
Total gross deferred income tax assets | 1,378 |  |  | 869 |
Less valuation allowance | (914) |  |  | (505) |
Total deferred income tax assets | 464 |  |  | 364 |
Deferred income tax liabilities: |  |  |
Equity method investment | (498) |  |  | (15) |
Amortization of goodwill and intangible assets | (695) |  |  | (707) |
Deferred contract costs | (298) |  |  | (259) |
Other deferred tax liabilities | (161) |  |  | (232) |
Total deferred income tax liabilities | (1,652) |  |  | (1,213) |
Net deferred income tax liability | $ | (1,188) |  |  | $ | (849) |
Deferred income taxes are classified in the consolidated balance sheets as of December 31, 2025 and 2024, as follows (in millions):
| 2025 |  | 2024
Noncurrent deferred income tax assets (included in Other noncurrent assets) | $ | 27 |  |  | $ | 14 |
Noncurrent deferred income tax liabilities | (1,215) |  |  | (863) |
Net deferred income tax liability | $ | (1,188) |  |  | $ | (849) |
We believe that based on our historical pattern of taxable income, projections of future income, tax planning strategies as necessary and other relevant evidence, the Company will produce sufficient income in the future to realize its deferred income tax assets (net of valuation allowance). A valuation allowance is established for any portion of a deferred income tax asset for which we believe it is more likely than not that the Company will not be able to realize the benefits of all or a portion of that deferred income tax asset. We also receive periodic assessments from taxing authorities challenging our positions; these assessments must be taken into consideration in determining our tax accruals. Resolving these assessments, which may or may not result in additional taxes due, may require an extended period of time. Adjustments to the valuation allowance will be made if there is a change in our assessment of the amount of deferred income tax asset that is realizable. As of December 31, 2025 and 2024, the Company had net income taxes receivable of $325 million and a net income taxes payable of $236 million, respectively. As of December 31, 2025, $325 million of income tax receivable was included in Other receivables in the consolidated balance sheet. As of December 31, 2024, $279 million of income tax payable was included in Accounts payable, accrued and other liabilities and $43 million of income tax receivable was included in Other receivables in the consolidated balance sheet. As of December 31, 2025 and 2024, the Company had federal, state and foreign NOL carryforwards that resulted in deferred tax assets of $490 million and $364 million, respectively. Of these amounts, $143 million and $70 million, respectively, relate to federal and state NOL carryforwards. Most federal and state NOL carryforwards expire between 2026 and 2043, while a small number do not expire. The Company recorded valuation allowances of $55 million and $47 million as of December 31, 2025 and 2024, respectively, related to deferred tax assets arising from federal and state NOL carryforwards. Foreign NOL carryforwards resulted in deferred tax assets of $347 million and $294 million as of December 31, 2025 and 2024, respectively, and the Company maintained a valuation allowance against substantially all deferred tax assets arising from foreign NOL carryforwards as of both reporting dates. As of December 31, 2024, as a result of the 2024 Worldpay Sale, the Company recorded a deferred tax asset of $220 million related to the U.S. capital loss recognized in the transaction, offset by a valuation allowance of $130 million. As of December 31, 2025, the Company maintained a deferred tax asset of $136 million related to the U.S. capital loss, fully offset by a valuation allowance of $136 million. The $84 million decrease in this deferred tax asset is primarily attributable to the carryback of the loss against available capital gains. As of December 31, 2024, as a result of the 2024 Worldpay Sale, the Company recognized a $15 million deferred tax liability for the difference between the tax basis of the Worldpay equity method investment and the corresponding financial statement carrying value. During 2025, as a result of the 2026 Worldpay Minority Interest Sale, the Company remeasured the existing deferred tax liability to account for the change in our intent to hold the investment for the long term, as well as our best estimate of the ordinary versus capital characterization of the expected proceeds. In accordance with the provisions of ASC 740, the net deferred tax liability recognized in connection with our Worldpay equity method investment reflects the difference between the tax basis of the investment and the corresponding financial statement carrying value. As of December 31, 2025, the Company maintained a $498 million deferred tax liability and a $363 million deferred tax asset, fully offset by a valuation allowance, related to the equity method investment in Worldpay. As discussed in Note 1, the 2026 Worldpay Minority Interest Sale was completed on January 9, 2026, and the tax due will be based on the excess of sales proceeds over the tax basis and a number of other factors, including the valuation of assets held in Worldpay, how the form of the transaction was effectuated and the final purchase price allocation. The continued assessment of these factors and their potential impact on the ordinary versus capital characterization of the expected proceeds could result in a material change to the realizability of the deferred tax assets for U.S. capital loss carryforwards and the final tax computed on the sale. The Company participates in the IRS' Compliance Assurance Process ("CAP"), which is a real-time continuous audit. The IRS has completed its review for years through 2021. Currently, we believe the ultimate resolution of the IRS examinations will not result in a material adverse effect to the Company's financial position or results of operations. Tax years that remain subject to examination by major foreign and state tax jurisdictions are 2017 and forward. As of December 31, 2025 and 2024, the Company had gross unrecognized tax benefits of $60 million and $49 million of which $51 million and $41 million, respectively, would favorably impact our income tax rate in the event that the unrecognized tax benefits are recognized. The following table reconciles the gross amounts of unrecognized tax benefits at the beginning and end of the period (in millions):
| Gross Amount
Unrecognized tax benefits as of December 31, 2023 | $ | 41 |
Decreases due to lapse of the applicable statute of limitations | (6) |
Increases due to settlements | 4 |
Increases as a result of tax positions taken in the prior period | 4 |
Increases as a result of tax positions taken in the current period | 6 |
Unrecognized tax benefit as of December 31, 2024 | 49 |
Decreases due to lapse of the applicable statute of limitations | (1) |
Decreases due to settlements | (2) |
Decreases as a result of tax positions taken in prior period | (13) |
Increases as a result of tax positions taken in the current period | 27 |
Unrecognized tax benefit as of December 31, 2025 | $ | 60 |
The total amount of interest expense recognized in the consolidated statements of earnings (loss) for unpaid taxes is $2 million, $3 million and $2 million for the years ended December 31, 2025, 2024 and 2023, respectively. The total amount of interest and penalties included in the consolidated balance sheets is $12 million and $10 million as of December 31, 2025 and 2024, respectively. Interest and penalties are recorded as a component of income tax expense in the consolidated statements of earnings (loss). The following table summarizes the cash payments for income taxes for the period ended December 31, 2025, 2024, and 2023 as follows (in millions):
|  | 2025 |  | 2024 |  | 2023
Federal |  | $ | 395 |  |  | $ | 288 |  |  | $ | 159 |
State |  | 60 |  |  | 90 |  |  | 85 |
Foreign |  |  |  |  |  |
United Kingdom |  | 44 |  |  | 35 |  |  | 52 |
Other foreign jurisdictions |  | 129 |  |  | 75 |  |  | 106 |
Total |  | $ | 628 |  |  | $ | 488 |  |  | $ | 402 |

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