v3.25.4

INCOME TAXES (Tables) | 12 Months Ended
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Dec. 31, 2025
Income Tax Disclosure [Abstract] |
Schedule of Income Tax Expense (Benefit) | Earnings before income taxes and the provision for income taxes are presented in the following table.
| Year Ended December 31,
(in millions) | 2025 |  | 2024 |  | 2023
Earnings (loss) before income taxes: |  |  |  |  |
U.S. 1 | $ | (177) |  |  | $ | (303) |  |  | $ | (316) |
Non-U.S. | 701 |  |  | 842 |  |  | 1,307 |
Total | $ | 524 |  |  | $ | 539 |  |  | $ | 991 |
Provision for income taxes: |  |  |  |  |
Current: |  |  |  |  |
Federal 2 | $ | (1) |  |  | $ | (18) |  |  | $ | (1) |
State | (3) |  |  | 1 |  |  | 8 |
Foreign 2 | 326 |  |  | 284 |  |  | 342 |
Total current expense | 322 |  |  | 267 |  |  | 349 |
Deferred: |  |  |  |  |
Federal | (76) |  |  | (198) |  |  | (85) |
State | (7) |  |  | (5) |  |  | — |
Foreign | (50) |  |  | 47 |  |  | 25 |
Total deferred benefit | (133) |  |  | (156) |  |  | (60) |
Total provision for income taxes | $ | 189 |  |  | $ | 111 |  |  | $ | 289 |
__________________________ 1 In 2023, the U.S. loss before income taxes included the realized and unrealized loss on debt and equity securities of $174 million that was primarily related to the Company’s investment in Wolfspeed convertible debt securities that was sold during the year. 2 In accordance with ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”, which requires withholding tax expense to be reflected in the jurisdiction in which the tax is imposed, the Company reclassified $45 million and $43 million of withholding tax expense for 2024 and 2023, respectively, from U.S. current tax expense to foreign current tax expense.
Schedule of Effective Income Tax Rate Reconciliation | The reconciliation of the tax provision at the U.S. federal statutory rate to income tax expense is presented in the following table.
| Year Ended December 31, |
(in millions) | 2025 |  | 2024 |  | 2023 |
U.S. federal statutory tax rate | $ | 110 |  |  | 21.0 | % |  | $ | 114 |  |  | 21.0 | % |  | $ | 209 |  |  | 21.0 | % |
State and local income taxes 1 | (10) |  |  | (1.9) |  |  | — |  |  | — |  |  | 6 |  |  | 0.6 |  |
Enactment of new tax laws | — |  |  | — |  |  | (9) |  |  | (1.7) |  |  | — |  |  | — |  |
Effect of cross-border tax laws |  |  |  |  |  |  |  |  |  |  |  |
Foreign-derived intangible income | — |  |  | — |  |  | (11) |  |  | (2.0) |  |  | (23) |  |  | (2.3) |  |
Global intangible low-taxed income | 36 |  |  | 6.9 |  |  | 24 |  |  | 4.5 |  |  | 19 |  |  | 1.9 |  |
Net tax on remittance of foreign earnings | 1 |  |  | 0.2 |  |  | (17) |  |  | (3.2) |  |  | (10) |  |  | (1.0) |  |
Other | 14 |  |  | 2.7 |  |  | 1 |  |  | 0.2 |  |  | 11 |  |  | 1.1 |  |
Tax credits |  |  |  |  |  |  |  |  |  |  |  |
Foreign tax credits | (48) |  |  | (9.2) |  |  | (47) |  |  | (8.7) |  |  | (40) |  |  | (4.0) |  |
Research and development credit | (10) |  |  | (1.9) |  |  | (26) |  |  | (4.8) |  |  | (34) |  |  | (3.4) |  |
Changes in valuation allowances | (6) |  |  | (1.1) |  |  | 32 |  |  | 5.9 |  |  | 39 |  |  | 3.9 |  |
Nontaxable or nondeductible items |  |  |  |  |  |  |  |  |  |  |  |
Intercompany transaction gain | (6) |  |  | (1.1) |  |  | (15) |  |  | (2.8) |  |  | (61) |  |  | (6.1) |  |
Other | 14 |  |  | 2.7 |  |  | 9 |  |  | 1.7 |  |  | 5 |  |  | 0.5 |  |
Other adjustments |  |  |  |  |  |  |  |  |  |  |  |
Realization of basis differences | (40) |  |  | (7.6) |  |  | (13) |  |  | (2.4) |  |  | 1 |  |  | 0.1 |  |
Other | 2 |  |  | 0.4 |  |  | 13 |  |  | 2.4 |  |  | (6) |  |  | (0.6) |  |
Foreign tax effects |  |  |  |  |  |  |  |  |  |  |  |
China |  |  |  |  |  |  |  |  |  |  |  |
Effect of rates different than statutory | 21 |  |  | 4.0 |  |  | 4 |  |  | 0.7 |  |  | 18 |  |  | 1.8 |  |
Withholding tax | 37 |  |  | 7.1 |  |  | 33 |  |  | 6.1 |  |  | 52 |  |  | 5.2 |  |
Net tax on remittance of foreign earnings | (6) |  |  | (1.1) |  |  | (6) |  |  | (1.1) |  |  | (21) |  |  | (2.1) |  |
Impairment of goodwill | — |  |  | — |  |  | 94 |  |  | 17.5 |  |  | (1) |  |  | (0.1) |  |
Tax holiday | (39) |  |  | (7.4) |  |  | (45) |  |  | (8.4) |  |  | (35) |  |  | (3.5) |  |
Enhanced research and development deduction | (24) |  |  | (4.6) |  |  | (29) |  |  | (5.4) |  |  | (35) |  |  | (3.5) |  |
Changes in valuation allowances | 18 |  |  | 3.4 |  |  | — |  |  | — |  |  | — |  |  | — |  |
Other | (7) |  |  | (1.3) |  |  | 8 |  |  | 1.5 |  |  | (6) |  |  | (0.6) |  |
Germany |  |  |  |  |  |  |  |  |  |  |  |
Effect of rates different than statutory | 28 |  |  | 5.3 |  |  | (7) |  |  | (1.3) |  |  | 1 |  |  | 0.1 |  |
Impairment of goodwill | 61 |  |  | 11.4 |  |  | 32 |  |  | 6.1 |  |  | — |  |  | — |  |
State and local income taxes | (5) |  |  | (1.0) |  |  | 14 |  |  | 2.6 |  |  | 2 |  |  | 0.2 |  |
Other | 27 |  |  | 5.2 |  |  | (16) |  |  | (3.0) |  |  | 20 |  |  | 2.0 |  |
Italy |  |  |  |  |  |  |  |  |  |  |  |
Changes in valuation allowances | (2) |  |  | (0.4) |  |  | 14 |  |  | 2.6 |  |  | — |  |  | — |  |
Other | 7 |  |  | 1.3 |  |  | 6 |  |  | 1.1 |  |  | 7 |  |  | 0.7 |  |
Korea |  |  |  |  |  |  |  |  |  |  |  |
Withholding tax | 13 |  |  | 2.5 |  |  | 14 |  |  | 2.6 |  |  | 13 |  |  | 1.3 |  |
Impairment of goodwill | — |  |  | — |  |  | 18 |  |  | 3.3 |  |  | — |  |  | — |  |
Other | 8 |  |  | 1.5 |  |  | (6) |  |  | (1.1) |  |  | 6 |  |  | 0.6 |  |
Mexico |  |  |  |  |  |  |  |  |  |  |  |
Intercompany transaction gain | — |  |  | — |  |  | — |  |  | — |  |  | (16) |  |  | (1.6) |  |
Other | 15 |  |  | 2.9 |  |  | (5) |  |  | (0.9) |  |  | 19 |  |  | 1.9 |  |
France |  |  |  |  |  |  |  |  |  |  |  |
Changes in valuation allowances | 1 |  |  | 0.2 |  |  | (2) |  |  | (0.4) |  |  | 96 |  |  | 9.7 |  |
Other | 1 |  |  | 0.2 |  |  | — |  |  | — |  |  | (6) |  |  | (0.6) |  |
Luxembourg |  |  |  |  |  |  |  |  |  |  |  |
Changes in valuation allowances | — |  |  | — |  |  | — |  |  | — |  |  | 37 |  |  | 3.7 |  |
Other | (3) |  |  | (0.6) |  |  | 3 |  |  | 0.6 |  |  | (3) |  |  | (0.3) |  |
Other foreign jurisdictions | 1 |  |  | 0.2 |  |  | 31 |  |  | 5.8 |  |  | 31 |  |  | 3.1 |  |
Changes in unrecognized tax benefits | (20) |  |  | (3.8) |  |  | (99) |  |  | (18.4) |  |  | (6) |  |  | (0.6) |  |
Income tax expense | $ | 189 |  |  | 36.1 | % |  | $ | 111 |  |  | 20.6 | % |  | $ | 289 |  |  | 29.1 | % |
__________________________ 1 State taxes in Mississippi (2025), Illinois and Kentucky (2024 & 2023) comprise the majority (greater than 50%) of the tax effect in that category.
Schedule of Unrecognized Tax Benefits Roll Forward | A roll forward of the Company’s total gross unrecognized tax benefits is presented below:
(in millions) | 2025 |  | 2024 |  | 2023
Balance, January 1 | $ | 95 |  |  | $ | 161 |  |  | $ | 172 |
Additions based on tax positions related to current year | 7 |  |  | 9 |  |  | 15 |
Reductions for closure of tax audits and settlements | (1) |  |  | — |  |  | (5) |
Reductions for tax positions of prior years | (37) |  |  | (1) |  |  | (11) |
Reductions for lapse in statute of limitations | — |  |  | (67) |  |  | (10) |
Translation adjustment | 9 |  |  | (7) |  |  | — |
Balance, December 31 | $ | 73 |  |  | $ | 95 |  |  | $ | 161 |
Schedule of Tax Jurisdiction | The Company is no longer subject to income tax examinations by tax authorities in its major tax jurisdictions as follows:
Tax jurisdiction |  | Years no longer subject to audit |  | Tax jurisdiction |  | Years no longer subject to audit
U.S. Federal |  | 2021 and prior |  | Luxembourg |  | 2020 and prior
China |  | 2019 and prior |  | Mexico |  | 2019 and prior
France |  | 2021 and prior |  | Poland |  | 2019 and prior
Germany |  | 2018 and prior |  | South Korea |  | 2019 and prior
Hungary |  | 2019 and prior |  | United Kingdom |  | 2021 and prior
Japan |  | 2023 and prior |  |  |  |
Schedule of Deferred Tax Assets (Liabilities) | The components of deferred tax assets and liabilities consist of the following:
| December 31,
(in millions) | 2025 |  | 2024
Deferred tax assets: |  |  |
Net operating loss and capital loss carryforwards | $ | 320 |  |  | $ | 305 |
Research and development capitalization | 332 |  |  | 291 |
Employee compensation | 77 |  |  | 45 |
Other comprehensive loss | 28 |  |  | — |
Warranty | 33 |  |  | 30 |
Tax credits | 106 |  |  | 67 |
Other | 86 |  |  | 116 |
Total deferred tax assets | $ | 982 |  |  | $ | 854 |
Valuation allowance | (360) |  |  | (325) |
Net deferred tax asset | $ | 622 |  |  | $ | 529 |
Deferred tax liabilities: |  |  |
Goodwill and intangible assets | (88) |  |  | (100) |
Unremitted foreign earnings | (88) |  |  | (95) |
Fixed assets | (55) |  |  | (107) |
Other comprehensive gain | — |  |  | (35) |
Total deferred tax liabilities | $ | (231) |  |  | $ | (337) |
Net deferred taxes | $ | 391 |  |  | $ | 192 |
Schedule of Income Tax Geographical Information | Cash paid for income taxes, net of refunds is presented in the following table:
| Year Ended December 31,
(in millions) | 2025 |  | 2024 |  | 2023
U.S. state | $ | 1 |  |  | $ | 10 |  |  | $ | 7 |
U.S. federal | — |  |  | 50 |  |  | 47 |
Total foreign | 371 |  |  | 346 |  |  | 308 |
China | 105 |  |  | 96 |  |  | 91 |
Korea | 42 |  |  | 47 |  |  | 41 |
Poland | 35 |  |  | 20 |  |  | 30 |
Spain | 33 |  |  | 32 |  |  | 30 |
Mexico | 31 |  |  | 46 |  |  | 20 |
Germany | 23 |  |  | 6 |  |  | 23 |
India | 23 |  |  | 18 |  |  | 15 |
Other foreign | 79 |  |  | 81 |  |  | 58 |
Total | $ | 372 |  |  | $ | 406 |  |  | $ | 362 |
| Year Ended December 31,
(in millions) | 2025 |  | 2024 |  | 2023
OPERATING ACTIVITIES OF CONTINUING OPERATIONS |  |  |  |  |
Net earnings | $ | 335 |  |  | $ | 399 |  |  | $ | 695 |
Net loss from discontinued operations | — |  |  | (29) |  |  | (7) |
Net earnings from continuing operations | 335 |  |  | 428 |  |  | 702 |
Adjustments to reconcile net earnings from continuing operations to net cash provided by operating activities from continuing operations: |  |  |  |  |
Depreciation and tooling amortization | 653 |  |  | 604 |  |  | 515 |
Intangible asset amortization | 66 |  |  | 69 |  |  | 67 |
Restructuring expense, net of cash paid | 36 |  |  | 6 |  |  | 66 |
Stock-based compensation expense | 66 |  |  | 62 |  |  | 58 |
Loss on sales of assets | 9 |  |  | — |  |  | — |
Loss (gain) on sales of businesses | 2 |  |  | 6 |  |  | (5) |
Gain on debt extinguishment | — |  |  | (10) |  |  | (28) |
Asset impairments | 624 |  |  | 646 |  |  | 29 |
Impairment of investment | 16 |  |  | — |  |  | — |
Costs to exit charging business | 32 |  |  | — |  |  | — |
Change in accounting method | — |  |  | (29) |  |  | — |
Unrealized and realized (gain) loss on equity and debt securities | (3) |  |  | 1 |  |  | 174 |
Deferred income tax benefit | (133) |  |  | (156) |  |  | (44) |
Other non-cash adjustments | 3 |  |  | 8 |  |  | (25) |
Adjustments to reconcile net earnings from continuing operations to net cash provided by operating activities from continuing operations | 1,371 |  |  | 1,207 |  |  | 807 |
Retirement plan contributions | (24) |  |  | (45) |  |  | (19) |
Changes in assets and liabilities, excluding effects of acquisitions, divestitures and foreign currency translation adjustments: |  |  |  |  |
Receivables | 2 |  |  | 143 |  |  | (482) |
Inventories | 105 |  |  | 31 |  |  | (72) |
Prepayments and other current assets | 32 |  |  | (18) |  |  | (3) |
Accounts payable and accrued expenses | (207) |  |  | (292) |  |  | 375 |
Prepaid taxes and income taxes payable | (17) |  |  | (40) |  |  | (20) |
Other assets and liabilities | 51 |  |  | (32) |  |  | 109 |
Net cash provided by operating activities from continuing operations | $ | 1,648 |  |  | $ | 1,382 |  |  | $ | 1,397 |
SUPPLEMENTAL CASH FLOW INFORMATION |  |  |  |  |
Cash paid during the year for: |  |  |  |  |
Interest | $ | 133 |  |  | $ | 121 |  |  | $ | 126 |
Income taxes, net of refunds | $ | 372 |  |  | $ | 406 |  |  | $ | 362 |
Non-cash investing transactions: |  |  |  |  |
Period end accounts payable related to property, plant and equipment purchases | $ | 116 |  |  | $ | 111 |  |  | $ | 148 |

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