v3.25.4

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2025
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The compone nts of the provision for income taxes on continuing operations were as follows:
| Year Ended December 31,
Millions of dollars | 2025 | 2024 | 2023
Current income taxes: |  |  |
Federal | $(3) | $10 | $(21)
Foreign | (448) | (571) | (472)
State | (5) | (9) | (12)
Total current income taxes | (456) | (570) | (505)
Deferred income taxes: |  |  |
Federal | (66) | (167) | (123)
Foreign | 10 | 31 | (59)
State | 33 | (12) | (14)
Total deferred income taxes | (23) | (148) | (196)
Income tax provision | $(479) | $(718) | $(701)
The United States and foreign components of income from continuing operations before income taxes were as follows:
| Year Ended December 31,
Millions of dollars | 2025 | 2024 | 2023
United States | $762 | $1,695 | $1,666
Foreign | 1,009 | 1,539 | 1,697
Total income from continuing operations before income taxes | $1,771 | $3,234 | $3,363
Reconciliations between the actual provision for income taxes on continuing operations and that computed by applying the United States statutory rate to income from continuing operations before income taxes were as follows:
| Year Ended December 31,
Millions of dollars | 2025
U.S. Federal Statutory Tax Rate | $372 | 21.0%
State and Local Income Tax, Net of Federal Income Tax Effect (a) | (24) | (1.4)
Foreign Tax Effects |  |
Argentina |  |
Intercompany Withholding Tax | 33 | 1.9
Other | 15 | 0.8
Brazil | 27 | 1.5
Cayman Islands |  |
Statutory Tax Rate Difference Between Cayman Islands and United States | 29 | 1.6
Mexico |  |
Foreign Exchange / Inflation Adjustment | (26) | (1.5)
Other | 28 | 1.6
Norway | 23 | 1.3
Saudi Arabia |  |
Intercompany Withholding Tax | 32 | 1.8
Other | (3) | (0.2)
Singapore |  |
Statutory Tax Rate Difference Between Singapore and United States | (35) | (2.0)
Other | 25 | 1.4
United Arab Emirates | (19) | (1.1)
Other Foreign Jurisdictions | 125 | 7.0
Domestic Federal Reconciling Items |  |
Effect of Cross-Border Tax Laws |  |
Foreign Derived Intangible Income Deduction | (135) | (7.6)
Global Intangible Low-Taxed Income | 23 | 1.3
Other | 10 | 0.6
Tax Credits |  |
Foreign Tax Credit | (146) | (8.2)
Research & Development Credit | (50) | (2.8)
Changes in Valuation Allowances | 176 | 9.9
Nontaxable or Nondeductible items | 32 | 1.8
Other Adjustments | (5) | (0.1)
Changes in Unrecognized Tax Benefits | (28) | (1.6)
Effective Tax Rate | $479 | 27.0%
(a) | During the year ended December 31, 2025, state and local income taxes in Texas comprise the majority (greater than 50 percent) of the state and local income taxes, net of federal effect category.
Year Ended December 31, |
| 2024 | 2023
United States statutory rate | 21.0% | 21.0%
Valuation allowance against tax assets | (2.1) | 0.8
Impact of foreign income taxed at different rates | 4.7 | 0.2
State income taxes | 0.6 | 0.7
Impact of impairments and other charges | 0.6 | 0.6
Adjustments of prior year taxes | (2.5) | (1.3)
Other items, net | (0.1) | (1.2)
Total effective tax rate on continuing operations | 22.2% | 20.8%
During the year ended December 31, 2025, we recorded a total income tax provision of $479 million on pre-tax income of $1.8 billion, resulting in an effective tax rate of 27.0%. The effective tax rate for 2025 was primarily impacted by our geographic mix of earnings, tax adjustments related to the reassessment of prior year tax accruals, and changes of valuation allowance on some of our deferred tax assets, and discrete tax benefit from the Foreign-Derived Intangible Income (FDII) deduction attributable to a royalty prepayment. During the year ended December 31, 2024, we recorded a total income tax provision of $718 million on pre-tax income of $3.2 billion, resulting in an effective tax rate of 22.2%. The effective tax rate for 2024 was primarily impacted by our geographic mix of earnings, tax adjustments related to the reassessment of prior year tax accruals, and valuation allowances on some of our deferred tax assets. During the year ended December 31, 2023, we recorded a total income tax provision of $701 million on pre-tax income of $3.4 billion, resulting in an effective tax rate of 20.8%. The effective tax rate for 2023 was primarily impacted by our geographic mix of earnings, tax adjustments related to the reassessment of prior year tax accruals, and valuation allowances on some of our deferred tax assets. The primary components of our deferred tax assets and liabilities were as follows:
| December 31,
Millions of dollars | 2025 | 2024
Gross deferred tax assets: |  |
Foreign tax credit carryforwards | $790 | $950
Intangible assets | 679 | 727
Operating and capital loss carryforwards | 629 | 581
Royalty prepayment | 239 | —
Accrued liabilities | 233 | 227
Employee compensation and benefits | 157 | 170
Research and development tax credit carryforwards | 86 | 85
Other | 813 | 639
Total gross deferred tax assets | 3,626 | 3,379
Gross deferred tax liabilities: |  |
Depreciation and amortization | 197 | 164
Operating lease right-of-use assets | 133 | 144
Other | 63 | 50
Total gross deferred tax liabilities | 393 | 358
Valuation allowances | 943 | 718
Net deferred income tax asset | $2,290 | $2,303
At December 31, 2025, we had $635 million of domestic and foreign tax-effected operating and capital loss carryforwards, with approximately $6 million estimated to be utilized against our unrecognized tax benefits. In addition, we had approximately $819 million of foreign tax credit carryforwards which are offset by $29 million of foreign branch deferred activity and unrecognized tax benefits reflected in the table above. The ultimate realization of these deferred tax assets depends on our ability to generate sufficient taxable income in the appropriate taxing jurisdiction. Our def erred tax assets from operating and capital losses, foreign tax credits, and research and development credits will expire as follows:
Millions of dollars | U.S. Net Operating Loss | Foreign Operating and Capital Loss | Foreign Tax Credits | Research and Development Credit | Total Deferred Tax Assets
2026-2030 | $5 | $69 | $430 | $— | $504
2031-2035 | 6 | 24 | 353 | — | 383
2036-2045 | 13 | 68 | 36 | 85 | 202
Non-Expiring | 13 | 437 | — | — | 450
| $37 | $598 | $819 | $85 | $1,539
We have not recorded incremental U.S. income taxes or foreign withholding taxes on the undistributed earnings of foreign subsidiaries subsequent to December 31, 2017. Under ASC 740, income taxes are generally not provided on such undistributed earnings to the extent they are either not expected to be subject to tax upon repatriation or are considered to be indefinitely reinvested. For the year ended December 31, 2025, the “One Big Beautiful Bill Act,” was introduced which included federal tax law revisions that affected the Company’s ability to utilize Foreign Tax Credits (FTC). Companies were required to recognize the effects of changes in tax laws in the period in which the new legislation is enacted. As a result, the Company reassessed the realizability of its FTC carryforwards and recorded an additional valuation allowance of $125 million against its FTC deferred tax assets. The following table presents a rollforward of our unrecognized tax benefits and associated interest and penalties.
Millions of dollars | Unrecognized Tax Benefits |  | Interest and Penalties
Balance at January 1, 2023 | $311 |  | $64
Change in prior year tax positions | (38) |  | (10)
Change in current year tax positions | 8 |  | 1
Cash settlements with taxing authorities | (4) |  | (3)
Lapse of statute of limitations | (9) |  | (3)
Balance at December 31, 2023 | $268 | (a) | $49
Change in prior year tax positions | (68) |  | —
Change in current year tax positions | 10 |  | 1
Cash settlements with taxing authorities | (1) |  | (1)
Lapse of statute of limitations | (13) |  | (4)
Balance at December 31, 2024 | $196 | (a) | $45
Change in prior year tax positions | 40 |  | 3
Change in current year tax positions | 15 |  | 2
Cash settlements with taxing authorities | (11) |  | —
Lapse of statute of limitations | (70) |  | (8)
Balance at December 31, 2025 | $170 | (a)(b) | $42
(a) | Includes $36 million as of December 31, 2025, $40 million as of December 31, 2024, and $43 million as of December 31, 2023 in foreign unrecognized tax benefits that would give rise to a United States tax credit. As of December 31, 2025, December 31, 2024, and December 31, 2023, a net $119 million, $137 million and $192 million after a net operating loss carryforward offset, respectively, of unrecognized tax benefits would positively impact the effective tax rate and be recognized as additional tax benefits in our statement of operations if resolved in our favor.
(b) | Includes $24 million as of December 31, 2025 that we believe could be resolved within the next 12 months.
Income taxes paid (net of refunds received) were as follows:
| Year Ended December 31,
Million of dollars | 2025
US Federal | $27
US State and Local | 9
Foreign |
Mexico | 112
Saudi Arabia | 76
Other | 415
Foreign Subtotal | 603
Total | $639
Our tax returns are subject to review by the taxing authorities in the jurisdictions where we file tax returns. In most cases we are no longer subject to examination by tax authorities for years before 2014. The only significant operating jurisdiction that has tax filings under review or subject to examination by the tax authorities is the United States. The United States federal income tax filings for tax years 2016 through 2024 are currently under review or remain open for review by the IRS. As of December 31, 2025, the primary unresolved issue for the IRS audit for 2016 relates to the classification of the $3.5 billion ordinary deduction that we claimed for the termination fee we paid to Baker Hughes in the second quarter of 2016 for which we received a NOPA from the IRS on September 28, 2023. We regularly assess the likelihood of adverse outcomes resulting from tax examinations to determine the adequacy of our tax reserves, and we believe our income tax reserves are appropriately provided for all open tax years. We do not expect a final resolution of this issue in the next 12 months. Based on the information currently available, we do not anticipate a significant increase or decrease to our tax contingencies within the next 12 months.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income tax. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 942 -SubTopic 740 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477617/942-740-50-1 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org/1943274/2147480738/235-10-S50-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 944 -SubTopic 740 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478822/944-740-50-1 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12 Reference 5: http://www.xbrl.org/2003/role/exampleRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 231 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482663/740-10-55-231 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12C -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12C Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12B -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12B Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org/1943274/2147477891/740-270-50-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB Topic 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479360/740-10-S99-1 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org/1943274/2147480990/946-20-50-13 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480678/235-10-S99-1 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/740/tableOfContent Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-14 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-21 Reference 15: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-17 Reference 16: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479360/740-10-S99-2 Reference 17: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482603/740-30-50-2 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration