EOG RESOURCES INCEOG

EOG RESOURCES INC Income Taxes Disclosure

10-KFiled Feb 24, 20265 min read
Income Taxes
The components of EOG's Net Deferred Income Tax Liabilities at December 31, 2025 and 2024 were as follows (in millions):
 20252024
Deferred Income Tax Assets (Liabilities)  
Foreign Oil and Gas Exploration and Development Costs Deducted for Tax Over Book Depreciation, Depletion and Amortization
$(54)$(56)
Foreign Asset Retirement Obligations108 89 
Foreign Accrued Expenses and Liabilities10 10 
Foreign Net Operating Losses
130 127 
Foreign Valuation Allowances(155)(131)
Total Net Deferred Income Tax Assets$39 $39 
Deferred Income Tax (Assets) Liabilities  
Oil and Gas Exploration and Development Costs Deducted for Tax Over Book Depreciation, Depletion and Amortization
$7,055 $6,040 
Deferred Compensation Plans(73)(65)
Equity Awards(68)(65)
Other(60)(44)
Total Net Deferred Income Tax Liabilities$6,854 $5,866 
Net Deferred Income Tax Liabilities
$6,815 $5,827 

The components of EOG's Income Before Income Taxes for the years indicated below were as follows (in millions):
 202520242023
United States$6,366 $8,157 $9,576 
Foreign(4)61 113 
Income Before Income Taxes
$6,362 $8,218 $9,689 

The components of EOG's Income Tax Provision for the years indicated below were as follows (in millions):
 202520242023
Current:
Federal$988 $1,244 $1,334 
State43 102 76 
Foreign8 2 5 
Total1,039 1,348 1,415 
Deferred:   
Federal341 425 628 
State3 40 55 
Foreign(1)2 — 
Total343 467 683 
Other Non-Current:
Foreign— — (3)
Total
— — (3)
Income Tax Provision$1,382 $1,815 $2,095 
The differences between taxes computed at the United States federal statutory tax rate and EOG's Effective Income Tax Rate for the years indicated below were as follows (in millions, except percentages):

202520242023
Amount
Percent
Amount
Percent
Amount
Percent
Statutory Federal Income Tax Rate
$1,336 21 %$1,726 21 %$2,035 21 %
State and Local Income Taxes, Net of Federal Benefit (1)
37 1 %112 1 %104 1 %
Foreign Tax Effects
7 0 %(9)0 %(17)0 %
Effects of Cross-Border Tax Laws
16 0 %21 0 %9 0 %
Tax Credits
(23)0 %(12)0 %— 0 %
Changes in Valuation Allowances
5 0 %1 0 %— 0 %
Nontaxable or Nondeductible Items
12 0 %6 0 %9 0 %
Changes in Unrecognized Tax Benefits
— 0 %— 0 %(4)0 %
Other Adjustments
(8)0 %(30)0 %(41)0 %
Effective Income Tax Rate
$1,382 22 %$1,815 22 %$2,095 22 %
(1)    New Mexico made up the majority (greater than 50%) of the state tax effect for the years ended December 31, 2025 and December 31, 2024. Texas made up the majority (greater than 50%) of the state tax effect for the year ended December 31, 2023.

The components of EOG’s Total Income Taxes Paid (Net of Refunds) for the years indicated below were as follows (in millions):
 202520242023
Federal (1)
$1,758 $701 $1,110 
State
Texas (2)
— 45 69 
Other
105 28 45 
Foreign
6 5 5 
Total Income Taxes Paid (Net of Refunds)
$1,869 $779 $1,229 
(1)    The year ended December 31, 2025 includes cash payments related to the purchase of tax credits and certain postponed 2024 tax year payments related to tax relief for severe weather events which occurred in 2024. The year ended December 31, 2024 includes cash payments related to the purchase of tax credits.
(2)    The amount of income taxes paid during the year does not meet the 5% disaggregation threshold for the year ended December 31, 2025.

Deferred tax assets are recorded for future deductible amounts and certain other tax benefits, such as tax net operating losses (NOLs) and tax credit carryforwards, provided that management assesses the utilization of such assets to be "more likely than not." Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. On the basis of this evaluation, EOG has recorded valuation allowances for the portion of certain deferred tax assets that management does not believe are more likely than not to be realized.
The components of the change in EOG's Valuation Allowances for deferred income tax assets for the years indicated below were as follows (in millions):
 202520242023
Beginning Balance$201 $216 $207 
Increase (1)
30 15 8 
Decrease (2)
(17)— — 
Other (3)
5 (30)1 
Ending Balance
$219 $201 $216 
(1)    Increase in valuation allowance related to the generation of tax NOLs and other deferred tax assets.
(2)    Decrease in valuation allowance associated with adjustments to certain deferred tax assets and their related allowances.
(3)    Represents dispositions, revisions and/or foreign exchange rate variances and the effect of statutory income tax rate changes.

As of December 31, 2025, EOG has NOL carryforwards of approximately $400 million (federal), $1.8 billion (state) and $454 million (foreign). The federal NOL, as well as certain state and foreign NOLs, have indefinite carryforward periods. All other state NOLs expire between 2026 and 2040 and the other foreign NOLs can be carried forward, some up to 20 years. The ability to utilize these NOLs, in any jurisdiction, depends on sufficient future taxable income and whether there are any statutory limitations. Certain limitations related to ownership changes, among others, may apply to the federal and state NOLs acquired from Encino in 2025. As described previously, these NOLs and other less significant tax benefits have been evaluated for the likelihood of utilization, and valuation allowances have been established for the portion of these deferred income tax assets that do not meet the “more likely than not” threshold.

In 2025, EOG purchased approximately $440 million of energy-related tax credits from a third-party seller(s) which were used to reduce tax year 2025 estimated tax payments. The cash payments made to the third-party seller(s) are included in income taxes, net of refunds received, disclosed in Note 10.

As of December 31, 2025, EOG does not have any unrecognized tax benefits. Consequently, no interest or penalties have been recognized in the Consolidated Statement of Income and Comprehensive Income. When applicable, EOG's accounting policy is to record interest and penalties to the income tax provision. EOG and its subsidiaries file income tax returns and are subject to tax audits in the United States and various state, local and foreign jurisdictions. Generally, EOG's earliest open tax year in its principal jurisdiction, the United States, is 2022.

EOG's foreign subsidiaries' undistributed earnings are not considered to be permanently reinvested outside of the United States and when appropriate, deferred income taxes have been accrued on any such outside basis differences. Additionally, EOG's foreign earnings may be subject to the United States federal "Global Intangible Low-Taxed Income" (GILTI) inclusion. EOG records any GILTI tax as a period expense.

On July 4, 2025, the One Big Beautiful Bill Act was signed into law, which primarily made permanent (generally with amendments) certain tax provisions of the 2017 Tax Cuts and Jobs Act. Included, among others, were changes to business tax provisions such as permanently restoring 100% bonus depreciation and full domestic research expensing. While the legislation reduced EOG's 2025 cash tax payments, it did not have a material impact on EOG's earnings.
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Historical Timeline

Fiscal YearFiled
2025Feb 24, 2026Showing above
2024Feb 27, 2025
2023Feb 22, 2024
2022Feb 23, 2023
2021Feb 24, 2022
2020Feb 25, 2021
2019Feb 27, 2020
2018Feb 26, 2019
2017Feb 27, 2018
2016Feb 27, 2017
2015Feb 25, 2016

About Income Taxes Disclosures

The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.

Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.

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