Income Taxes |
6 Months Ended |
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Jun. 30, 2025 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | INCOME TAXES
We recorded an income tax provision of $426 million and $547 million during the three and six months ended June 30, 2025, respectively, and an income tax provision of $210 million and $319 million for the same periods of 2024, respectively, which was calculated using the annual effective tax rate method.
Our effective tax rate was 18.3% and 17.6% during the three and six months ended June 30, 2025, respectively, as compared to 15.3% and 13.8% for the same periods of 2024, respectively. Our effective tax rate increased between the comparable periods primarily due to: (1) decreased ratio of pre-tax income attributable to CQP, which is partially not taxable to us, (2) increased tax expense due to a valuation allowance on a capital loss carryover generated on the sale of all of our equity interests in an equity method investment during the three months ended March 31, 2025 and (3) a reduced Foreign Derived Intangible Income (“FDII”) deduction. The effective tax rate for the comparable three and six month periods was lower than the statutory rate of 21.0% primarily due to CQP’s income that is partially not taxable to us.
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law with significant changes to the Internal Revenue Code that are expected to impact us, including, among other provisions, 100% bonus depreciation on qualifying assets acquired after January 19, 2025 and changes to the FDII deduction rules, renamed to the Foreign Derived Deduction Eligible Income (“FDDEI”) under the OBBBA. The 100% bonus depreciation under the OBBBA is expected to reduce our income tax payable retroactively from the effective date, which will be adjusted in our Consolidated Financial Statements in the third quarter of 2025, the period of enactment. Under law in effect prior to the OBBBA, the effective rate on FDII was scheduled to increase as a result of a decrease in the FDII deduction to 21.875% for tax years beginning after December 31, 2025. Effective for tax years beginning after December 31, 2025, the OBBBA sets the FDDEI deduction at 33.34%, and also eliminates for purposes of FDDEI, the qualified business asset investment provisions and the requirement to apportion certain expenses to foreign derived income. We are continuing to evaluate the provisions of the OBBBA and the potential effects on our financial position, results of operations and cash flows.
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