v3.25.4
Tax Matters - Deferred Taxes (Details) - USD ($)
$ in Millions
Dec. 31, 2025
Dec. 31, 2024
Deferred Tax Assets    
Prepaid/deferred items [1] $ 3,516 $ 3,288
Accrued/deferred royalties [1] 1,051 1,306
Inventories [1] 864 992
Intangible assets [1],[2] 1,821 1,435
Property, plant and equipment [1] 249 265
Employee benefits [1] 842 1,002
Restructurings and other charges [1] 388 462
Legal and product liability reserves [1] 428 378
Research and development [1] 7,235 7,635
Net operating loss/tax credit carryforwards [1],[3] 1,763 2,028
State and local tax adjustments [1] 134 161
Investments [1],[4] 234 73
All other [1] 23 87
Subtotal - Deferred tax assets [1] 18,547 19,112
Valuation allowances [1] (1,546) (1,638)
Total deferred taxes - Deferred tax assets [1] 17,001 17,474
Deferred Tax Liabilities    
Prepaid/deferred items [1] (635) (847)
Inventories [1] (372) (702)
Intangible assets [1],[2] (8,810) (9,066)
Property, plant and equipment [1] (1,771) (1,751)
Employee benefits [1] (255) (274)
Unremitted earnings [1] (76) (69)
Investments [1],[4] (36) (248)
All other [1] (12) (66)
Deferred tax liabilities, gross [1] (11,968) (13,023)
Net deferred tax asset [1],[5],[6] $ 5,033 $ 4,451
[1] The deferred tax assets and liabilities associated with GILTI (NCTI) are included in the relevant categories. See Note 1Q.
[2] The decrease in net deferred tax liabilities in 2025 is primarily due to the amortization of intangible assets and certain impairment charges, partially offset by the acquisition of intangible assets related to Metsera. See Note 2A.
[3] The amounts in 2025 and 2024 are reduced for unrecognized tax benefits of $636 million and $575 million, respectively, where we have net operating loss carryforwards, similar tax losses, and/or tax credit carryforwards that are available, under the tax law of the applicable jurisdiction, to settle any additional income taxes that would result from the disallowance of a tax position.
[4] The increase in net deferred tax assets in 2025 is primarily due to the sale of our remaining investment in Haleon. See Note 2C.
[5] Excludes indefinite- and definite-lived deferred tax assets for certain non-U.S. tax losses and interest carryforwards and U.S. state general business credits, totaling $9.9 billion and $11.3 billion for 2025 and 2024 respectively, given that management has determined based on applicable accounting rules that it is remote that these tax attributes will be utilized. In 2025, the elimination of certain legal entities resulted in the loss of attributes.
[6] In 2025, Noncurrent deferred tax assets and other noncurrent tax assets ($7.4 billion), and Noncurrent deferred tax liabilities ($2.4 billion). In 2024, Noncurrent deferred tax assets and other noncurrent tax assets ($6.6 billion), and Noncurrent deferred tax liabilities ($2.1 billion).