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Income Taxes (Notes) | 12 Months Ended
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Dec. 31, 2019
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The principal components of EOG's total net deferred income tax liabilities at December 31, 2019 and 2018 were as follows (in thousands):
| 2019 |  | 2018 |
Deferred Income Tax Assets (Liabilities) |  |  |  |  |  |
Foreign Oil and Gas Exploration and Development Costs Deducted for Tax Under Book Depreciation, Depletion and Amortization | $ | 5,825 |  |  | $ | 4,359 |  |
Foreign Net Operating Loss | 66,675 |  |  | 55,175 |  |
Foreign Valuation Allowances | (70,455 | ) |  | (58,932 | ) |
Foreign Other | 318 |  |  | 175 |  |
Total Net Deferred Income Tax Assets | $ | 2,363 |  |  | $ | 777 |  |
Deferred Income Tax (Assets) Liabilities |  |  |  |  |  |
Oil and Gas Exploration and Development Costs Deducted for Tax Over Book Depreciation, Depletion and Amortization | $ | 5,277,550 |  |  | $ | 4,583,517 |  | (1)
Commodity Hedging Contracts | (4,699 | ) |  | 4,883 |  |
Deferred Compensation Plans | (47,650 | ) |  | (39,086 | ) |
Accrued Expenses and Liabilities | (8,502 | ) |  | (19,097 | ) |
Equity Awards | (108,324 | ) |  | (93,977 | ) |
Alternative Minimum Tax Credit Carryforward | (31,904 | ) |  | — |  |
Undistributed Foreign Earnings | 15,746 |  |  | 22,945 |  |
Other | (46,116 | ) |  | (45,787 | ) |
Total Net Deferred Income Tax Liabilities | $ | 5,046,101 |  |  | $ | 4,413,398 |  |
Total Net Deferred Income Tax Liabilities | $ | 5,043,738 |  |  | $ | 4,412,621 |  |
(1) | The 2018 presentation has been changed to conform with current year presentation.
The components of Income Before Income Taxes for the years indicated below were as follows (in thousands):
| 2019 |  | 2018 |  | 2017
United States | $ | 3,466,578 |  |  | $ | 4,084,156 |  |  | $ | 621,610 |
Foreign | 78,689 |  |  | 156,842 |  |  | 39,572 |
Total | $ | 3,545,267 |  |  | $ | 4,240,998 |  |  | $ | 661,182 |
The principal components of EOG's Income Tax Provision (Benefit) for the years indicated below were as follows (in thousands):
| 2019 |  | 2018 |  | 2017
Current: |  |  |  |  |
Federal | $ | (152,258 | ) |  | $ | (303,853 | ) |  | $ | 33,058 |
State | 10,819 |  |  | 17,048 |  |  | (2,502 | )
Foreign | 81,426 |  |  | 65,615 |  |  | 35,323 |
Total | (60,013 | ) |  | (221,190 | ) |  | 65,879 |
Deferred: |  |  |  |  |  |  |  |
Federal | 626,901 |  |  | 862,075 |  |  | (1,504,288 | )
State | 32,541 |  |  | 43,293 |  |  | 26,942 |
Foreign | (27,784 | ) |  | (11,212 | ) |  | 3,474 |
Total | 631,658 |  |  | 894,156 |  |  | (1,473,872 | )
Other Non-Current: (1) |  |  |  |  |
Federal | 245,125 |  |  | 148,992 |  |  | (513,404 | )
Foreign | (6,413 | ) |  | — |  |  | — |
Total | 238,712 |  |  | 148,992 |  |  | (513,404 | )
Income Tax Provision (Benefit) | $ | 810,357 |  |  | $ | 821,958 |  |  | $ | (1,921,397 | )
(1) | Includes changes in certain amounts that are expected to be paid or received beyond the next twelve months. The primary components are refundable alternative minimum tax (AMT) credits and the 2017 repatriation tax. See the following statutory-to-effective tax rate reconciliation for additional details.
The differences between taxes computed at the U.S. federal statutory tax rate and EOG's effective rate for the years indicated below were as follows:
| 2019 |  | 2018 |  | 2017 |
Statutory Federal Income Tax Rate | 21.00 | % |  | 21.00 | % |  | 35.00 | % |
State Income Tax, Net of Federal Benefit | 0.97 |  |  | 1.12 |  |  | 3.38 |  |
Income Tax Provision Related to Foreign Operations | 0.87 |  |  | 0.51 |  |  | (0.30 | ) |
Income Tax Provision Related to United Kingdom Operations | — |  |  | — |  |  | 1.78 |  |
Income Tax Provision Related to Canadian Operations | — |  |  | — |  |  | 2.30 |  |
TCJA (1) | — |  |  | (2.60 | ) | (2) | (328.10 | ) | (3)
Share-Based Compensation | 0.02 |  |  | (0.47 | ) |  | (4.63 | ) |
Other | — |  |  | (0.18 | ) |  | (0.03 | ) |
Effective Income Tax Rate | 22.86 | % |  | 19.38 | % |  | (290.60 | )% |
(1) | The enactment of the Tax Cuts and Jobs Act (TCJA) by the United States in 2017 made numerous changes to federal tax law. Several changes which had a significant impact on EOG include the corporate income tax rate reduction from 35% to 21%, the imposition of a one-time repatriation tax on undistributed foreign earnings and the repeal of the corporate AMT regime (AMT credit carryforwards became refundable over the following four years and were initially subject to a federal sequestration charge). In 2017, EOG revalued its federal deferred income tax assets and liabilities resulting in an earnings benefit of over $2 billion and a substantial reduction of the 2017 effective tax rate. The TCJA measurement-period adjustments were recorded in 2018.
(2) | Includes impact of utilizing certain tax net operating losses (NOLs) ((1.2)%), the reversal of sequestration ((1.0)%) and other tax reform impacts ((0.4)%).
(3) | Includes impact of the federal rate reduction ((327.8)%), federal repatriation tax ((6.6)%), sequestration ((6.4)%) and other tax reform impacts ((0.1)%).
The net effective tax rate of 23% in 2019 was higher than the prior year rate of 19% primarily due to the absence of tax benefits from certain tax reform measurement-period adjustments. Deferred tax assets are recorded for certain tax benefits, including tax 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 foreign and state deferred tax assets that management does not believe are more likely than not to be realized. The principal components of EOG's rollforward of valuation allowances for deferred income tax assets for the years indicated below were as follows (in thousands):
| 2019 |  | 2018 |  | 2017
Beginning Balance | $ | 167,142 |  |  | $ | 466,421 |  |  | $ | 383,221 |
Increase (1) | 30,673 |  |  | 23,062 |  |  | 67,333 |
Decrease (2) | (75 | ) |  | (26,219 | ) |  | (13,687 | )
Other (3) | 3,091 |  |  | (296,122 | ) |  | 29,554 |
Ending Balance | $ | 200,831 |  |  | $ | 167,142 |  |  | $ | 466,421 |
(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 allowance.
(3) | Represents dispositions, revisions and/or foreign exchange rate variances and the effect of statutory income tax rate changes. The United Kingdom operations were sold in the fourth quarter of 2018.
As of December 31, 2019, EOG had state income tax NOLs of approximately $2.1 billion, which, if unused, expire between 2020 and 2038. EOG also has Canadian NOLs of $225 million, some of which can be carried forward up to 20 years. As described above, 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. The total balance of unrecognized tax benefits for all jurisdictions at December 31, 2019, was $39 million, resulting from the tax treatment of research and experimental expenditures related to certain innovations in EOG's horizontal drilling and completion projects and tax treatment of certain compensation deductions, of which $25 million may potentially have an earnings impact. EOG records interest and penalties related to unrecognized tax benefits to its income tax provision. Cumulatively, $4 million of interest has been recognized in the Consolidated Statements of Income and Comprehensive Income. EOG does not anticipate that the amount of the unrecognized tax benefits will change materially during the next twelve months. EOG and its subsidiaries file income tax returns and are subject to tax audits in the U.S. and various state, local and foreign jurisdictions. EOG's earliest open tax years in its principal jurisdictions are as follows: U.S. federal (2016), Canada (2015), Trinidad (2013) and China (2009). EOG's foreign subsidiaries' undistributed earnings are not considered to be permanently reinvested outside of the U.S. Accordingly, EOG may be required to accrue certain U.S. federal, state, and foreign deferred income taxes on these undistributed earnings as well as on any other outside basis differences related to its investments in these subsidiaries. As of December 31, 2019, EOG has cumulatively recorded $16 million of deferred foreign income taxes for withholdings on its undistributed foreign earnings. Additionally, for tax years beginning in 2018 and later, EOG's foreign earnings may be subject to the U.S. federal "global intangible low-taxed income" (GILTI) inclusion. EOG records any GILTI tax as a period expense.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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