v3.25.4
Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Schedule of earnings before income tax expense
Earnings Before Income Tax Expense
years ended December 31 (in millions)202520242023
Domestic$(3,540)$(7,743)$(3,475)
Foreign10,137 11,459 9,725 
Total earnings before income tax expense$6,597 $3,716 $6,250 
Schedule of income tax expense
Income Tax Expense
years ended December 31 (in millions)202520242023
Current
Domestic$1,230 $(331)$3,272 
Foreign1,626 1,210 994 
Total current taxes$2,856 $879 $4,266 
Deferred
Domestic$(61)$(1,303)$(2,324)
Foreign(431)(146)(565)
Total deferred taxes$(492)$(1,449)$(2,889)
Total income tax expense (benefit)$2,364 $(570)$1,377 
Summary of effective tax rate reconciliation
Effective Tax Rate Reconciliation
ASU 2023-09 was adopted on a prospective basis for the year ended December 31, 2025, accordingly the following table has been included which reconciles the U.S. federal statutory tax rate and expense to the effective tax rate:
year ended December 31 (dollars in millions, except for percentages)2025
Statutory tax rate$1,385 21.0 %
Foreign tax effects
Puerto Rico
Tax rate differential1,426 21.6 
Impact from industrial development income(2,989)(45.3)
Other (23)(0.3)
Bermuda
Tax rate differential104 1.6 
Valuation allowances286 4.3 
Other(14)(0.2)
Ireland
Tax rate differential(115)(1.7)
Net operating loss utilization101 1.5 
Other(7)(0.1)
Malta
Tax rate differential(118)(1.8)
Deduction on equity(128)(1.9)
Non-deductible items241 3.7 
Other35 0.5 
All other, net94 1.4 
Effect of cross-border tax laws
Global intangible low-taxed income, net of foreign tax credit (FTC)1,114 16.9 
U.S. tax impact of branch accounting, net of FTC(149)(2.3)
Other99 1.5 
Tax credits(142)(2.2)
Unrecognized tax benefits654 9.9 
Change in valuation allowances(94)(1.4)
Non-taxable and non-deductible acquisition costs649 9.8 
All other, net(45)(0.7)
Effective tax rate$2,364 35.8 %
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:
years ended December 31 20242023
Statutory tax rate21.0 %21.0 %
Effect of foreign operations7.6 8.0 
U.S. tax credits(5.4)(3.1)
Stock-based compensation (1.2)(1.0)
Non-deductible expenses1.1 0.7 
Tax law changes and related structuring(0.3)(3.8)
Tax audits, settlements and reserves(51.4)(1.1)
Acquisition costs13.4 0.2 
All other, net(0.1)1.1 
Effective tax rate(15.3)%22.0 %
Schedule of deferred tax assets and liabilities
Deferred Tax Assets and Liabilities
as of December 31 (in millions)20252024
Deferred tax assets
Compensation and employee benefits$74 $215 
Accruals and reserves1,133 1,253 
Chargebacks and rebates1,482 1,354 
Net operating losses and other carryforwards16,022 15,815 
Other2,504 2,222 
Total deferred tax assets21,215 20,859 
Valuation allowances(15,018)(14,823)
Total net deferred tax assets6,197 6,036 
Deferred tax liabilities
Excess of book basis over tax basis of intangible assets(1,530)(1,969)
Excess of book basis over tax basis in investments(322)(302)
Other(630)(718)
Total deferred tax liabilities(2,482)(2,989)
Net deferred tax assets $3,715 $3,047 
Schedule of Unrecognized Tax Benefits Roll Forward
Unrecognized Tax Benefits
years ended December 31 (in millions)202520242023
Beginning balance$4,401 $5,762 $5,670 
Increase due to current year tax positions337 173 129 
Increase due to prior year tax positions20 454 109 
Decrease due to prior year tax positions(18)(1,741)(21)
Settlements(222)(284)(86)
Increase due to acquisitions12 82 — 
Lapse of statutes of limitations(25)(45)(39)
Ending balance$4,505 $4,401 $5,762 
Schedule of Cash Flow, Supplemental Disclosures
ASU 2023-09 was adopted on a prospective basis for the year ended December 31, 2025, accordingly the following table has been included which discloses the amount of income taxes paid (net of refunds) disaggregated by jurisdiction:
year ended December 31 (in millions)2025
Domestic$2,185 
Foreign
Ireland431 
Puerto Rico297 
Other713 
Total foreign1,441 
Income taxes paid$3,626