XML 38 R27.htm IDEA: XBRL DOCUMENT v3.23.3
Income Taxes
 9 Months Ended
Sep. 30, 2023
Income Tax Disclosure [Abstract]  
Income Taxes
Note 20—Income Taxes
Our effective tax rate for the three-month periods ended September 30, 2023 and 2022 was 31.8 percent and 39.2 percent, respectively. The change in the effective tax rate for the three-month period ending September 30, 2023 is primarily due to the release of tax reserves and the recognition of a Malaysia tax benefit, described below, and a shift in our mix of income among our tax jurisdictions.

Our effective tax rate for the nine-month periods ended September 30, 2023 and 2022 was 33.9 percent and 32.9 percent, respectively. The change in our effective tax rate for the nine-month period ended September 30, 2023 is primarily due to a smaller release of tax reserves in 2023 compared to 2022, partly offset by the recognition of a Malaysia tax benefit, described below, and a shift in our mix of income among our tax jurisdictions.

During the third quarter of 2023, we received legislative approval in the Malaysia Block J to claim certain deepwater tax incentives. As a result, we recorded an income tax benefit of $52 million.

During the third quarter of 2023, the Canada Revenue Agency closed the 2018 audit of one of our Canadian subsidiaries. As a result, we recognized a Canadian tax benefit of $92 million relating to our disposition of certain Canadian assets that was previously offset by a full reserve.

In the first quarter of 2022, the IRS closed the 2017 audit of our U.S. federal income tax return. As a result, we recognized federal and state tax benefits totaling $515 million relating to the recovery of outside tax basis previously offset by a full reserve.

The Company has ongoing income tax audits in a number of jurisdictions. The government agents in charge of these audits regularly request additional time to complete audits, which we generally grant, and conversely occasionally close audits unpredictably. Within the next twelve months, we may have audit periods close that could significantly impact our total unrecognized tax benefits. The amount of such change is not estimable but could be significant when compared with our total unrecognized tax benefits.

In October 2023, the statute of limitations expired with respect to a foreign subsidiary that will result in the recognition of a $203 million tax benefit in the fourth quarter related to the reversal of a tax reserve.