v3.25.4
Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Schedule of Components of Income Tax Expense
Pre-tax book income by geography is as follows (in millions):

Year Ended December 31,
202520242023
United States
$1,356 $838 $1,139 
Canada
45 131 232 
Total pre-tax book income
$1,401 $969 $1,371 

Components of income tax expense are as follows (in millions):
Year Ended December 31,
202520242023
Current income tax expense/(benefit):
State income tax$2 $2 $2 
Canadian federal and provincial income and withholding taxes
(1)80 68 
Total current income tax expense$1 $82 $70 
Deferred income tax expense/(benefit):
Canadian federal and provincial income and withholding taxes
$14 $5 $(9)
Total deferred income tax expense/(benefit)$14 $5 $(9)
Total income tax expense
$15 $87 $61 
Schedule of Differences Between Tax Expense based on the Statutory Federal Income Tax Rate and the Effective Income Tax Expense
The difference between income tax expense based on the statutory federal income tax rate and our effective income tax expense is summarized as follows (in millions, except percentages):

Year Ended December 31,
202520242023
Amount
Percent
Amount
Percent
Amount
Percent
U.S. federal statutory tax rate
$294 21.00 %$204 21.00 %$288 21.00 %
State and local income taxes (1)
2 0.14 %2 0.21 %2 0.15 %
Foreign tax effects:
Canada
Foreign rate differential
(3)(0.19)%(8)(0.81)%(14)(1.01)%
Provincial taxes
5 0.35 %13 1.35 %20 1.51 %
Foreign withholding taxes
3 0.21 %52 5.39 %— — %
Other
(2)(0.13)%— — %4 0.29 %
Nontaxable or nondeductible items:
Nontaxable income - U.S. partnership income
(284)(20.33)%(176)(18.17)%(239)(17.45)%
Effective tax rate
$15 1.06 %$87 8.95 %$61 4.48 %
(1)The state and local income tax category of the rate reconciliation is primarily comprised of income taxes in Texas, which represents more than 50 percent of the state and local tax effect.
Schedule of Cash Flow, Supplemental Disclosures
Cash taxes paid were as follows (in millions):
Year Ended December 31,
202520242023
State income tax:
Texas
$1 $2 2 
Total state income tax paid1 2 2 
Canadian federal and provincial income and withholding taxes
97 267 67 
Total cash tax paid
$98 $269 $69 
Schedule of Deferred Tax Assets and Liabilities
Deferred tax assets and liabilities are aggregated by the applicable tax paying entity and jurisdiction and result from the following (in millions):

December 31,
20252024
Deferred tax assets:
Derivative instruments$— $6 
Lease liabilities10 8 
Other7 8 
Total deferred tax assets17 22 
Deferred tax liabilities:
Property and equipment in excess of tax values(204)(185)
Lease assets(9)(10)
Other(1)(1)
Total deferred tax liabilities(214)(196)
Net deferred tax liabilities$(197)$(174)
Balance sheet classification of deferred tax assets/(liabilities):
Other long-term liabilities and deferred credits$(197)$(174)
$(197)$(174)