Annual report [Section 13 and 15(d), not S-K Item 405]

Income Taxes Income Taxes (Tables)

v3.25.4
Income Taxes Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Schedule of Components of Income Tax Expense (Benefit)
The income tax provision consists of the following:
Year Ended December 31,
2025 2024 2023
Current
Federal $ 73  $ 43  $ 72 
State 17  12  14 
Foreign 37  20  40 
127  75  126 
Deferred
Federal (43) 4  (6)
State (12) 2  (4)
Foreign (2) (2) (7)
(57) 4  (17)
Provision for income taxes $ 70  $ 79  $ 109 
Schedule of Income before Income Tax, Domestic and Foreign
Pretax income for domestic and foreign operations consisted of the following:
Year Ended December 31,
2025 2024 2023
Domestic $ 172  $ 264  $ 332 
Foreign 91  104  66 
Pretax income $ 263  $ 368  $ 398 
Schedule of Deferred Tax Assets and Liabilities
Deferred income tax assets and liabilities are comprised of the following:
As of December 31,
2025 2024
Deferred income tax assets:
Accrued liabilities and deferred revenues $ 91  $ 85 
Tax credits (a)
9  8 
Other comprehensive income and other 23  16 
Provision for doubtful accounts 30  9 
Net operating loss carryforward (b)
25  20 
Valuation allowance (c)
(21) (19)
Deferred income tax assets 157  119 
Deferred income tax liabilities:
Depreciation and amortization 386  404 
Other comprehensive income and other 27  34 
Deferred income tax liabilities 413  438 
Net deferred income tax liabilities $ 256  $ 319 
Reported in:
Other non-current assets $ 15  $ 13 
Deferred income taxes 271  332 
Net deferred income tax liabilities $ 256  $ 319 
_____________________
(a)    The Company had $8 million and $7 million of foreign tax credits as of December 31, 2025 and 2024, respectively. The foreign tax credits expire no later than 2035.
(b)    As of December 31, 2025, the Company’s net operating loss carryforwards primarily relate to state and foreign net operating losses, which are due to expire at various dates, but no later than 2045.
(c)    The valuation allowance of $21 million as of December 31, 2025 relates to net operating loss carryforwards, certain deferred tax assets and foreign tax credits of $10 million, $3 million and $8 million, respectively. The valuation allowance of $19 million as of December 31, 2024 relates to net operating loss carryforwards, certain deferred tax assets and foreign tax credits of $9 million, $3 million and $7 million, respectively. The valuation allowance will be reduced when and if the Company determines it is more likely than not that the related deferred income tax assets will be realized.
Schedule of Effective Income Tax Rate Reconciliation
Category 2025 2025 Percent
U.S. federal statutory tax rate $ 55  21.0  %
State and local income taxes, net of federal income tax effect (a)
3  1.1  %
Foreign tax effects
Singapore - foreign tax credits (4) (1.5) %
Singapore - other (3) (1.1) %
China - withholding tax 3  1.1  %
Other foreign jurisdictions 18  6.8  %
Effect of changes in tax laws or rates enacted in the current period —  —  %
Effect of cross-border tax laws
Foreign-derived intangible income (5) (1.9) %
Global intangible income 7  2.7  %
Other 2  0.8  %
Tax credits
Foreign tax credits (14) (5.3) %
Other (1) (0.4) %
Changes in valuation allowances 1  0.4  %
Nontaxable or nondeductible items
Executive compensation 5  1.9  %
Other (1) (0.4) %
Changes in unrecognized tax benefits 3  1.1  %
Other adjustments 1  0.3  %
Effective tax rate $ 70  26.6  %
_____________________
(a)    State taxes in California, Illinois, New Jersey and New York make up greater than 50% of the tax effects of this category.
As previously disclosed for the years ended December 31, 2024 and 2023, prior to the adoption of ASU 2023-09, the effective income tax rate differs from the statutory federal income tax rate as follows:
2024 2023
Federal statutory rate 21.0  % 21.0  %
State and local income taxes, net of federal tax benefits 3.0  2.5 
Taxes on foreign operations at rates different than U.S. federal statutory rates 0.8  2.6 
Taxes on foreign income, net of tax credits 0.2  0.3 
Nondeductible executive compensation 1.7  1.2 
Foreign-derived intangible income (1.1) (0.8)
Valuation allowances —  0.1 
Puerto Rico tax credits (3.7) — 
Other (0.4) 0.5 
21.5  % 27.4  %
Schedule of Unrecognized Tax Benefits
The following table summarizes the activity related to the Company’s unrecognized tax benefits as of December 31:
2025 2024 2023
Beginning balance $ 11  $ 11  $ 8 
Increases related to tax positions taken during a prior period 1  —  7 
Increases related to tax positions taken during the current period 2  2  2 
Decreases related to settlements with taxing authorities (6) —  (2)
Decreases as a result of a lapse of the applicable statute of limitations —  (2) (4)
Ending balance $ 8  $ 11  $ 11