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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2012
Income Tax Disclosure [Abstract] |
Income (loss) from continuing operations before income tax expense (benefit) from domestic and international operations | Income (loss) from continuing operations before income tax expense from U.S. and international operations was as follows (in millions):
| Year Ended December 31,
| 2012 |  | 2011 |  | 2010
U.S. operations | $ | 4,015 |  |  | $ | 3,190 |  |  | $ | 1,436 |
International operations | (309 | ) |  | 132 |  |  | 62 |
Income from continuing operations before income tax expense | $ | 3,706 |  |  | $ | 3,322 |  |  | $ | 1,498 |
Reconciliation of income tax expense (benefit) related to income (loss) from continuing operations before income tax expense (benefit) | The following is a reconciliation of income tax expense related to continuing operations to income taxes computed by applying the U.S. statutory federal income tax rate (35 percent for all years presented) to income from continuing operations before income tax expense (in millions):
| Year Ended December 31,
| 2012 |  | 2011 |  | 2010
Federal income tax expense at the U.S. statutory rate | $ | 1,297 |  |  | $ | 1,163 |  |  | $ | 524 |
U.S. state income tax expense (benefit), net of U.S. federal income tax effect | 64 |  |  | 29 |  |  | (21 | )
U.S. manufacturing deduction | (33 | ) |  | (28 | ) |  | 5 |
International operations | 266 |  |  | 46 |  |  | 27 |
Permanent differences | 20 |  |  | 8 |  |  | 8 |
Change in tax law | — |  |  | — |  |  | 16 |
Other, net | 12 |  |  | 8 |  |  | 16 |
Income tax expense | $ | 1,626 |  |  | $ | 1,226 |  |  | $ | 575 |
Components of income tax expense (benefit) related to continuing operations | Components of income tax expense related to continuing operations were as follows (in millions):
| Year Ended December 31,
| 2012 |  | 2011 |  | 2010
Current: |  |  |  |  |
U.S. federal | $ | 515 |  |  | $ | 562 |  |  | $ | (75 | )
U.S. state | 22 |  |  | 13 |  |  | (13 | )
International | 126 |  |  | 186 |  |  | 22 |
Total current | 663 |  |  | 761 |  |  | (66 | )
Deferred: |  |  |  |  |
U.S. federal | 854 |  |  | 527 |  |  | 634 |
U.S. state | 77 |  |  | 32 |  |  | (19 | )
International | 32 |  |  | (94 | ) |  | 26 |
Total deferred | 963 |  |  | 465 |  |  | 641 |
Income tax expense | $ | 1,626 |  |  | $ | 1,226 |  |  | $ | 575 |
Deferred income tax assets and liabilities | The tax effects of significant temporary differences representing deferred income tax assets and liabilities were as follows (in millions):
| December 31,
| 2012 |  | 2011
Deferred income tax assets: |  |  |
Tax credit carryforwards | $ | 61 |  |  | $ | 158 |
Net operating losses (NOL) | 247 |  |  | 300 |
Compensation and employee benefit liabilities | 383 |  |  | 324 |
Environmental liabilities | 83 |  |  | 78 |
Inventories | 258 |  |  | 273 |
Property, plant and equipment | 78 |  |  | 14 |
Other | 157 |  |  | 160 |
Total deferred income tax assets | 1,267 |  |  | 1,307 |
Less: Valuation allowance | (304 | ) |  | (295 | )
Net deferred income tax assets | 963 |  |  | 1,012 |
Deferred income tax liabilities: |  |  |
Turnarounds | (300 | ) |  | (310 | )
Property, plant and equipment | (6,143 | ) |  | (5,292 | )
Inventories | (381 | ) |  | (274 | )
Other | (103 | ) |  | (119 | )
Total deferred income tax liabilities | (6,927 | ) |  | (5,995 | )
Net deferred income tax liabilities | $ | (5,964 | ) |  | $ | (4,983 | )
Income tax credit and loss carryforwards | We had the following income tax credit and loss carryforwards as of December 31, 2012 (in millions):
| Amount |  | Expiration
U.S. state income tax credits | $ | 79 |  |  | 2013 through 2027
U.S. state income tax credits | 12 |  |  | Unlimited
U.S. state NOL (gross amount) | 4,806 |  |  | 2013 through 2032
International NOL | 518 |  |  | Unlimited
Subsequently recognized tax benefits related to the valuation allowance for deferred income tax assets | Subsequently recognized tax benefits related to the valuation allowance for deferred income tax assets as of December 31, 2012 will be allocated as follows (in millions):
Income tax benefit | $ | 297 |
Additional paid-in capital | 7 |
Total | $ | 304 |
Reconciliation of the change in unrecognized tax benefits, excluding the effect of related penalties and interest and the U.S. federal tax effect of U.S. state unrecognized tax benefit | The following is a reconciliation of the change in unrecognized tax benefits, excluding the effect of related penalties and interest and the U.S. federal tax effect of U.S. state unrecognized tax benefits (in millions):
| Year Ended December 31,
| 2012 |  | 2011 |  | 2010
Balance as of beginning of year | $ | 326 |  |  | $ | 330 |  |  | $ | 484 |
Additions based on tax positions related to the current year | 11 |  |  | 14 |  |  | 4 |
Additions for tax positions related to prior years | 40 |  |  | 55 |  |  | 49 |
Reductions for tax positions related to prior years | (36 | ) |  | (66 | ) |  | (203 | )
Reductions for tax positions related to the lapse of applicable statute of limitations | — |  |  | (3 | ) |  | (4 | )
Settlements | — |  |  | (4 | ) |  | — |
Balance as of end of year | $ | 341 |  |  | $ | 326 |  |  | $ | 330 |

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- Definition Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 + Details
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- Definition Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name FASB Interpretation (FIN) -Number 48 -Paragraph 21 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. + Details
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