Annual report [Section 13 and 15(d), not S-K Item 405]

INCOME TAXES (Tables)

v3.25.4
INCOME TAXES (Tables)
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Schedule of Income (Loss) From Continuing Operations Before Income Taxes, Domestic and Foreign
Income (loss) from continuing operations before income taxes includes the following components:
Year Ended December 31,
(In millions) 2025 2024 2023
United States $ (1,546) $ (901) $ 582 
Foreign (458) (49) (3)
Total $ (2,004) $ (950) $ 579 
Components of the Income Tax Provision (Benefit) on Continuing Operations
The components of the income tax expense (benefit) from continuing operations consist of the following:
Year Ended December 31,
(In millions) 2025 2024 2023
Current provision:
United States federal $ (70) $ (38) $ 4 
United States state & local (5) (6) 25 
Foreign —  3  4 
(75) (41) 33 
Deferred provision (benefit):
United States federal (324) (153) 94 
United States state & local (58) (33) 7 
  Foreign (124) (9) 10 
Total income tax expense (benefit) from continuing operations $ (581) $ (236) $ 144 
The components of income taxes for other than continuing operations consisted of the following:
(In millions) 2025 2024 2023
Other comprehensive income (loss):
Pension and OPEB $ 51  $ 55  $ 10 
Derivative instruments (11) (37) 47 
Foreign currency translation (4) —  — 
Total $ 36  $ 18  $ 57 
Reconciliation of Income Tax Attributable to Continuing Operations Computed at Statutory Rate
Reconciliation of our income tax attributable to continuing operations computed at the U.S. federal statutory rate as required by the newly adopted ASU No. 2023-09 for the year ended December 31, 2025 is as follows:
(In millions) 2025
Tax at U.S. statutory rate $ (421) 21  %
Increase (decrease) due to:
State and local income taxes, net of federal income tax1
(50) 3  %
Foreign tax effects
Canada
Statutory rate difference (19) 1  %
Tax credits (7) —  %
Change in valuation allowance (3) —  %
Other adjustments (1) —  %
Other foreign jurisdictions
 1  —  %
Non-taxable or nondeductible items
Depletion (1) —  %
Changes in unrecognized tax benefits (70) 3  %
Other adjustments
Provision to return (10) 1  %
Noncontrolling interest (10) 1  %
Other 10  (1) %
Provision for income tax expense (benefit) and effective income tax rate including discrete items
 $ (581) 29  %
1State taxes in Illinois, Indiana and Michigan made up the majority (greater than 50 percent) of the tax effect in this category.
Reconciliation of our income tax attributable to continuing operations computed at the U.S. federal statutory rate before the adoption of ASU No. 2023-09 for the years ended December 31, 2024 and December 31, 2023 is as follows:
(In millions) 2024 2023
Tax at U.S. statutory rate $ (199) 21  % $ 122  21  %
Increase (decrease) due to:
Percentage depletion in excess of cost depletion (20) 2  (32) (5)
Valuation allowance —  —  14  2 
Unrecognized tax benefits 7  —  7  1 
State taxes, net (30) 3  27  5 
Federal & state provision to return (4) —  (20) (3)
Income not subject to tax (10) 1  (11) (2)
Goodwill impairment —  —  26  4 
Other items, net 20  (2) 11  2 
Provision for income tax expense (benefit) and effective income tax rate including discrete items $ (236) 25  % $ 144  25  %
NOL and interest limitation carryforwards are as follows:
(In millions) 2025 2024
Gross domestic (including states) NOL carryforwards1
$ 4,827  $ 3,549 
Gross foreign NOL carryforwards2
1,673  1,507 
Gross U.S. interest expense limitation carryforward 789  92 
Gross Canadian interest expense limitation carryforward 141  — 
1If unused, Federal and state NOL carryforwards begin to expire in 2034 and 2026, respectively.
2If unused, foreign NOL carryforwards begin to expire in 2035.
Components of Cash Payments in Excess of Refunds Received
A reconciliation of capital additions to cash paid for capital expenditures is as follows:
Year Ended December 31,
(In millions) 2025 2024 2023
Capital additions $ 680  $ 817  $ 785 
Less:
Non-cash accruals (41) (47) (13)
Equipment financed with seller 73  72  59 
Right-of-use assets - finance leases 87  97  93 
Cash paid for capital expenditures including deposits $ 561  $ 695  $ 646 
Additionally, included within Other investing activities on the Statements of Consolidated Cash Flows are grant reimbursements related to governmental funded capital projects. For the years ended December 31, 2025, 2024 and 2023, grant reimbursements were $12 million, $8 million and $13 million, respectively.
Cash payments (receipts) for interest and income taxes are as follows:
Year Ended December 31,
(In millions) 2025 2024 2023
Income taxes paid $ 7  $ 17  $ 94 
Income tax refunds (23) (47) (205)
Interest paid on debt obligations net of capitalized interest1
459  255  256 
1 Capitalized interest was $15 million, $15 million and $12 million for the years ended December 31, 2025, 2024 and 2023, respectively.
The components of cash payments in excess of refunds received (refunds in excess of payments made) by jurisdiction are as follows:
Year Ended December 31,
(In millions) 2025 2024 2023
U.S. Federal
 $ — 
State
Illinois (6)
Michigan (3)
Alabama (2)
Ohio (1)
State total (12)
Foreign
Canada (5)
Other 1 
Foreign total (4)
Total refunds in excess of payments made $ (16)
Total refunds in excess of payments made (prior to ASU 2023-09) $ (30) $ (111)
Significant Components of Deferred Tax Assets and Liabilities
Significant components of our deferred tax assets and liabilities are as follows:
(In millions) 2025 2024
Deferred tax assets:
Operating loss and other carryforwards $ 778  $ 589 
Pension and OPEB liabilities 154  129 
Environmental 77  69 
Product inventories 62  53 
State and local 93  36 
Employee-based compensation 71  71 
Interest limitation 201  19 
Lease liabilities 154  87 
Other liabilities 107  69 
Total deferred tax assets before valuation allowance 1,697  1,122 
Deferred tax asset valuation allowance (394) (388)
Net deferred tax assets 1,303  734 
Deferred tax liabilities:
Investment in ventures (179) (181)
Lease assets (125) (88)
Property, plant and equipment and mineral rights (1,015) (811)
Intangible assets (243) (441)
Other assets (53) (59)
Total deferred tax liabilities (1,615) (1,580)
Net deferred tax liabilities $ (312) $ (846)
Summary of Changes in the Valuation Allowance
The changes in the valuation allowance are presented below:
(In millions) 2025 2024 2023
Balance at beginning of year $ 388  $ 396  $ 390 
Change in valuation allowance:
Income tax (benefit) expense 6  (8) 6 
Balance at end of year $ 394  $ 388  $ 396 
Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
(In millions) 2025 2024 2023
Unrecognized tax benefits balance as of January 1 $ 121  $ 76  $ 58 
Increases for tax positions in current year 35  46  18 
Decrease due to tax positions in prior year (2) (1) — 
Lapses in statutes of limitations (57) —  — 
Unrecognized tax benefits balance as of December 31 $ 97  $ 121  $ 76