Cheniere Energy, Inc.LNG
Cheniere Energy, Inc. Income Taxes Disclosure
INCOME TAXES
We received an aggregate of $92 million in income tax refunds, net of payments, during the year December 31, 2024 and we made an aggregate of $117 million in income tax payments, net of refunds, during the year ended December 31, 2023.
The jurisdictional components of income before income taxes and non-controlling interests on our Consolidated Statements of Operations are as follows (in millions):
| Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| U.S. federal | $ | 7,239 | $ | 4,696 | $ | 11,176 | ||||||||||||||
| International | 1,043 | 607 | 3,402 | |||||||||||||||||
| Total income before income taxes and non-controlling interests | $ | 8,282 | $ | 5,303 | $ | 14,578 | ||||||||||||||
Income tax provision included in our reported net income consisted of the following (in millions):
| Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Current: | ||||||||||||||||||||
| U.S. federal | $ | (383) | $ | 471 | $ | 130 | ||||||||||||||
| State | 1 | 2 | 1 | |||||||||||||||||
| Foreign | 11 | 8 | (1) | |||||||||||||||||
| Total current | (371) | 481 | 130 | |||||||||||||||||
| Deferred: | ||||||||||||||||||||
| U.S. federal | 1,846 | 319 | 2,377 | |||||||||||||||||
| State | 12 | 9 | 15 | |||||||||||||||||
| Foreign | 1 | 2 | (3) | |||||||||||||||||
| Total deferred | 1,859 | 330 | 2,389 | |||||||||||||||||
| Total income tax provision | $ | 1,488 | $ | 811 | $ | 2,519 | ||||||||||||||
The table below provides the updated requirements of ASU No. 2023-09 for 2025. See Note 2—Summary of Significant Accounting Policies for additional details on the adoption of ASU No. 2023-09.
Our income tax rates do not bear a customary relationship to statutory income tax rates. A reconciliation of the U.S. federal statutory income tax rate of 21% to our effective income tax rate for the year ended December 31, 2025 is as follows:
| Year Ended December 31, 2025 | ||||||||||||||
| Amount (in millions) | Percent (2) | |||||||||||||
| U.S. federal statutory tax rate | $ | 1,739 | 21.0 | % | ||||||||||
| State and local income taxes, net of federal income tax effect (1) | 11 | 0.1 | ||||||||||||
| Foreign tax effects | ||||||||||||||
| United Kingdom | ||||||||||||||
| Cheniere Marketing income not taxable in the U.K. under transfer pricing principles | (249) | (3.0) | ||||||||||||
| Other | 40 | 0.5 | ||||||||||||
| Other foreign jurisdictions | 2 | — | ||||||||||||
| Effects of cross-border tax laws | (2) | — | ||||||||||||
| Tax credits | (4) | (0.1) | ||||||||||||
| Changes in valuation allowance | 54 | 0.7 | ||||||||||||
| Nontaxable or nondeductible items | ||||||||||||||
| CQP income not taxable to Cheniere | (313) | (3.8) | ||||||||||||
| Other | 9 | 0.1 | ||||||||||||
| Changes in unrecognized tax benefits | 3 | — | ||||||||||||
| Other adjustments | ||||||||||||||
| Cheniere Marketing income taxable in the U.S. under transfer pricing principles | 209 | 2.5 | ||||||||||||
| Other | (11) | — | ||||||||||||
| Effective tax rate as reported | $ | 1,488 | 18.0 | % | ||||||||||
(1)State taxes in Louisiana and Texas contributed to the majority of the tax effect in this category.
(2)The percentages in the table may not recalculate exactly due to rounding as the percentages are calculated based on whole numbers, not the rounded numbers presented.
As previously disclosed for the years ended December 31, 2024 and 2023, prior to the adoption of ASU 2023-09, a reconciliation of the U.S. federal statutory income tax rate of 21% to our effective income tax rate was as follows:
| Year Ended December 31, | ||||||||||||||
| 2024 | 2023 | |||||||||||||
| U.S. federal statutory tax rate | 21.0 | % | 21.0 | % | ||||||||||
| Income not taxable to Cheniere | (5.0) | (3.1) | ||||||||||||
| Foreign-derived intangible income deduction | (1.0) | (0.7) | ||||||||||||
| Changes in valuation allowance | (0.7) | — | ||||||||||||
| Other | 1.0 | 0.1 | ||||||||||||
| Effective tax rate as reported | 15.3 | % | 17.3 | % | ||||||||||
Significant components of our deferred tax assets and liabilities are as follows (in millions):
| December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Deferred tax assets | ||||||||||||||
Net operating loss (“NOL”) carryforwards | ||||||||||||||
| U.S. federal | $ | 245 | $ | 313 | ||||||||||
| State | 119 | 119 | ||||||||||||
| Tax Credits | ||||||||||||||
| CAMT carryforward | — | 383 | ||||||||||||
| Other tax credits | 50 | 40 | ||||||||||||
| Operating lease liabilities | 566 | 562 | ||||||||||||
| Other | 447 | 306 | ||||||||||||
| Less: valuation allowance (1) | (170) | (110) | ||||||||||||
| Total deferred tax assets | 1,257 | 1,613 | ||||||||||||
| Deferred tax liabilities | ||||||||||||||
| Investment in partnerships | (375) | (305) | ||||||||||||
| Property, plant and equipment | (3,277) | (2,459) | ||||||||||||
| Operating lease assets | (553) | (548) | ||||||||||||
| Derivative instruments | (696) | (108) | ||||||||||||
| Other | (42) | (30) | ||||||||||||
| Total deferred tax liabilities | (4,943) | (3,450) | ||||||||||||
| Net deferred tax liabilities | $ | (3,686) | $ | (1,837) | ||||||||||
(1)Valuation allowance primarily relates to a valuation allowance recorded on U.S. federal capital loss carryforwards and state NOL carryforwards and increased by $60 million during the year ended December 31, 2025 primarily due to a capital loss carryforward generated in the current year that we do not expect to realize before expiration. The valuation allowance decreased by $37 million during the year ended December 31, 2024 and increased by $4 million during the year ended December 31, 2023.
NOL and tax credit carryforwards
As of December 31, 2025, we had U.S. federal and state NOL carryforwards of approximately $1.2 billion and $2.2 billion, respectively. All of our NOLs have an indefinite carryforward period.
As of December 31, 2025, our other tax credits expire between 2028 and 2035.
Our NOL and tax credit carryforwards are not subject to, nor impacted by, any prior tax ownership change. We continue to monitor public trading activity in our shares to identify potential tax ownership changes that could impact our timing and ability to utilize such attributes.
Tax Law Changes
On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law with significant changes to the Internal Revenue Code that impact us, including, among other provisions, reinstating 100% accelerated tax bonus depreciation on qualifying assets acquired after January 19, 2025 and modifying the export-promoting Foreign Derived Intangible Income (“FDII”) deduction rules, renamed to the Foreign Derived Deduction Eligible Income (“FDDEI”) under the OBBBA beginning in 2026.
The legislation did not have a material impact on our income tax expense for the year ended December 31, 2025, and it did not materially change our effective income tax rate for 2025. However, the 100% bonus depreciation provision under the OBBBA deferred our tax liability, ultimately reducing our 2025 income taxes payable to a nominal amount, primarily due to the accelerated tax deduction on qualifying Corpus Christi Stage 3 Project assets.
On September 30, 2025, the Internal Revenue Service issued Notice 2025-49, which includes, among other provisions, revised interim rules for calculating CAMT adjusted financial statement income, including rules allowing us to utilize and benefit from our existing net operating loss carryovers for both CAMT and regular tax in the same period. As a result, our cash tax obligations have been deferred, and we received a refund of $380 million of previously paid CAMT in December 2025.
Unrecognized Tax Benefits
As of December 31, 2025, 2024 and 2023, there were $63 million, $65 million and $66 million, respectively, of unrecognized tax benefits that, if recognized, would affect our effective tax rate in future periods. Interest and penalties related to income tax matters are recognized as part of income tax provision. Interest and penalties recognized as part of income tax provision was $6 million, $6 million and $4 million for the years ended December 31, 2025, 2024 and 2023, respectively, and cumulative accrued interest was $15 million and $10 million as of December 31, 2025 and 2024, respectively.
We are subject to tax in the U.S. and various state and foreign jurisdictions, and we are subject to periodic audits and reviews by taxing authorities. Federal tax returns for the years after 2017, United Kingdom tax returns for the years after 2020, Louisiana tax returns for the years after 2021 and Texas tax returns for the years after 2020 remain open for examination. Tax authorities may have the ability to review and adjust carryover attributes that were generated prior to these periods if utilized in an open tax year.
A reconciliation of the beginning and ending amounts of our unrecognized tax benefits is as follows (in millions):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Balance at beginning of the year | $ | 72 | $ | 73 | $ | 74 | |||||||||||
| Statute of limitations expiration | (3) | — | — | ||||||||||||||
| Reductions for tax positions of prior years | — | (1) | (1) | ||||||||||||||
| Balance at end of the year | $ | 69 | $ | 72 | $ | 73 | |||||||||||
The following is a supplemental schedule of cash paid for income taxes, net of refunds, for the year ended December 31, 2025 (in millions):
| Year Ended December 31, | |||||
| 2025 | |||||
| U.S. federal | $ | 47 | |||
| State and local | 2 | ||||
| Foreign | |||||
| United Kingdom | (18) | ||||
| Other | 1 | ||||
| Total Foreign | (17) | ||||
| Total income taxes paid, net of refunds received | $ | 32 | |||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 20, 2025 | |
| 2023 | Feb 22, 2024 | |
| 2022 | Feb 23, 2023 | |
| 2021 | Feb 24, 2022 | |
| 2020 | Feb 24, 2021 | |
| 2019 | Feb 25, 2020 | |
| 2018 | Feb 26, 2019 | |
| 2017 | Feb 21, 2018 | |
| 2016 | Feb 24, 2017 | |
| 2015 | Feb 19, 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.