Income Taxes (Tables)

12 Months Ended

Dec. 31, 2025

Income before Income Tax Expense from U.S. and Foreign Operations

Income before income tax expense was as follows (in millions):


	Year Ended December 31,
	2025		2024		2023
U.S. operations	$	899	$	2,685	$	9,335
Foreign operations	2,106		1,013		2,433
Income before income tax expense	$	3,005	$	3,698	$	11,768

Reconciliation of Income Tax Expense Related to Continuing Operations to Income Tax Expense at Statutory Rate

Statutory income tax rates applicable to the countries in which we operate during each of the years ended December 31, 2025, 2024, and 2023 were as follows:


	Statutory Income Tax Rates
U.S.	21	%
Canada	15	%
U.K. (a)	25	%
Ireland	13	%
Mexico	30	%
Peru	30	%

________________________

(a)Statutory income tax rate was increased to 25 percent from 19 percent effective April 1, 2023.

The following is a reconciliation of income tax expense computed by applying statutory income tax rates to actual income tax expense (dollars in millions):


	Year Ended December 31,
	2025				2024				2023
	Amount		Percent		Amount		Percent		Amount		Percent
U.S. federal statutory income tax rate	$	631	21.0	%	$	777	21.0	%	$	2,471	21.0	%
Domestic federal:
Tax credits
Foreign tax credits	(61)		(2.0)	%	(46)		(1.2)	%	(149)		(1.3)	%
Biofuels tax credits (a)	(4)		(0.1)	%	(248)		(6.7)	%	—		—	%
Other	(1)		—	%	(1)		—	%	(1)		—	%
Nontaxable and nondeductible items
Nontaxable production tax credits (b)	(66)		(2.2)	%	—		—	%	—		—	%
Nontaxable blender’s tax credits (c)	—		—	%	(127)		(3.4)	%	(125)		(1.1)	%
Tax on biofuels tax credits	1		—	%	52		1.4	%	—		—	%
Other (d)	13		0.4	%	14		0.4	%	34		0.3	%
Cross-border tax laws	4		0.1	%	7		0.2	%	27		0.2	%
Changes in valuation allowances	63		2.1	%	49		1.3	%	149		1.3	%
Other reconciling items
Tax effects of income associated with noncontrolling interests	25		0.8	%	(50)		(1.3)	%	(84)		(0.7)	%
Other	(3)		(0.1)	%	(43)		(1.2)	%	34		0.3	%
Domestic state and local income taxes, net of federal effect (e)	22		0.7	%	19		0.5	%	122		1.0	%
Foreign tax effects:
Canada
Provincial and local income taxes	90		3.0	%	101		2.7	%	161		1.4	%
Statutory income tax rate differential	(47)		(1.5)	%	(52)		(1.4)	%	(84)		(0.7)	%
Withholding taxes	41		1.4	%	59		1.6	%	45		0.4	%
Other	—		—	%	(2)		(0.1)	%	21		0.2	%
Mexico
Changes in valuation allowances	(61)		(2.0)	%	57		1.5	%	—		—	%
Statutory income tax rate differential	42		1.4	%	(26)		(0.7)	%	15		0.1	%
Other	1		—	%	(4)		(0.1)	%	35		0.3	%
U.K.
Statutory income tax rate differential	33		1.1	%	14		0.4	%	19		0.2	%
Other	1		—	%	1		—	%	(13)		(0.1)	%
Other foreign	8		0.3	%	(4)		(0.1)	%	(7)		(0.1)	%
Worldwide changes in unrecognized tax benefits	27		0.9	%	145		3.9	%	(51)		(0.4)	%
Income tax expense	$	759	25.3	%	$	692	18.7	%	$	2,619	22.3	%

________________________

(a)As permitted under Section 40(b) of the Code, producers of second-generation biofuels that are registered with the Internal Revenue Service (IRS) were eligible for an income tax credit of up to $1.01 per gallon of qualified biofuel that was produced and sold in the U.S. through December 31, 2024. We recorded a gross tax benefit in December 2024 related to these tax credits for the cellulosic ethanol produced by our Ethanol segment from 2020 through 2024, excluding the effects of unrecognized tax benefits, which are presented separately.

(b)As permitted under Section 45Z of the Code, a clean fuel production credit was available through December 31, 2025 for qualifying sales of low-carbon transportation fuels that were produced in the U.S. This credit was extended through December 31, 2029, with specific qualifications under the OBBB, as defined and described beginning on page 123.

(c)As permitted under Section 6426 of the Code, blenders of certain renewable fuels were eligible for a refundable tax credit of $1.00 per gallon of qualified fuel mixtures produced and either sold or used as fuel through December 31, 2024.

(d)Tax effects of share-based payment awards are included in this category.

(e)State and local income taxes in California and Texas composed the majority of the tax effect in this category.

Components of Income Tax Expense

Components of income tax expense were as follows (in millions):


	Year Ended December 31,
	2025		2024		2023
Current tax expense:
U.S. federal	$	574	$	464	$	1,804
U.S. state and local	52		37		157
Foreign	330		278		555
Total current tax expense	956		779		2,516
Deferred tax expense (benefit):
U.S. federal	(364)		(99)		25
U.S. state and local	(11)		(13)		(12)
Foreign	178		25		90
Total deferred tax expense (benefit)	(197)		(87)		103
Total income tax expense:
U.S. federal	210		365		1,829
U.S. state and local	41		24		145
Foreign	508		303		645
Total income tax expense	$	759	$	692	$	2,619

Schedule of Income Taxes Paid

Income taxes paid, net of any refunds, to U.S. and foreign taxing authorities were as follows (in millions):


	Year Ended December 31,
	2025		2024		2023
U.S. federal (a)	$	287	$	664	$	1,985
U.S. state and local	16		37		173
Foreign:
Canada
Federal	173		66		683
Quebec	78		34		385
U.K.	128		—		199
Other	17		42		69
Total foreign	396		142		1,336
Income taxes paid, net	$	699	$	843	$	3,494

________________________

(a)In 2025, the U.S. federal income taxes paid are shown net of the utilization of foreign tax credits and clean fuel production credits.

Deferred Income Tax Assets and Liabilities

The tax effects of significant temporary differences representing deferred income tax assets and liabilities were as follows (in millions):


	December 31,
	2025		2024
Deferred income tax assets:
Tax credit carryforwards	$	924	$	858
Net operating losses (NOLs)	632		689
Inventories	159		197



Finance lease obligations	633		607
Operating lease liabilities	210		212
Other	226		195
Total deferred income tax assets	2,784		2,758
Valuation allowance	(1,507)		(1,484)
Net deferred income tax assets	1,277		1,274
Deferred income tax liabilities:
Property, plant, and equipment	4,871		5,131
Deferred turnaround costs	428		450
Operating lease ROU assets	199		211

Investments	437		417
Other	488		332
Total deferred income tax liabilities	6,423		6,541
Net deferred income tax liabilities	$	5,146	$	5,267

Income Tax Credit and Loss Carryforwards

We had the following income tax credit and loss carryforwards as of December 31, 2025 (in millions):


	Amount		Expiration
U.S. state income tax credits (gross amount)	$	84	2026 through 2040
U.S. state income tax credits (gross amount)	3		Unlimited
U.S. foreign tax credits	855		2027 through 2035
U.S. state income tax NOLs (gross amount)	12,289		2026 through 2040

Reconciliation of the Changes in Unrecognized Tax Benefits

The following is a reconciliation of the changes in unrecognized tax benefits, excluding related interest and penalties (in millions):


	Year Ended December 31,
	2025		2024		2023
Balance as of beginning of year	$	316	$	186	$	284
Additions for tax positions related to the current year	4		52		18
Additions for tax positions related to prior years	13		106		4
Reductions for tax positions related to prior years	(12)		(19)		(73)
Reductions for tax positions related to the lapse of applicable statute of limitations	(6)		(7)		(9)
Settlements	—		(2)		(38)

Balance as of end of year	$	315	$	316	$	186