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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

Income Tax Disclosure [Abstract]

Income from continuing operations before income tax expense from U.S. and international operations

Income from continuing operations before income tax expense was as follows (in millions):

	Year Ended December 31,
	2014				2013				2012
U.S. operations	$	4,677			$	3,531			$	4,015
International operations	875				445				725
Income from continuing operations before income tax expense	$	5,552			$	3,976			$	4,740

Reconciliation of income tax expense related to continuing operations to federal income tax expense at U.S. federal statutory rate

The following is a reconciliation of income tax expense computed by applying the U.S. federal statutory income tax rate (35 percent for all years presented) to actual income tax expense related to continuing operations (in millions):

	Year Ended December 31,
	2014				2013				2012
Federal income tax expense at the U.S. federal statutory rate	$	1,943			$	1,392			$	1,659
U.S. state income tax expense, net of U.S. federal income tax effect	62				62				64
U.S. manufacturing deduction	(74		)		(36		)		(33		)
International operations	(88		)		(69		)		(96		)
Permanent differences	(16		)		(104		)		20
Change in tax law	—				(32		)		—
Other, net	(50		)		41				12
Income tax expense	$	1,777			$	1,254			$	1,626

Components of income tax expense related to continuing operations

Components of income tax expense related to continuing operations were as follows (in millions):

	Year Ended December 31,
	2014				2013				2012
Current:
U.S. federal	$	1,196			$	635			$	515
U.S. state	59				36				22
International	77				82				126
Total current	1,332				753				663
Deferred:
U.S. federal	268				459				854
U.S. state	36				59				77
International	141				(17		)		32
Total deferred	445				501				963
Income tax expense	$	1,777			$	1,254			$	1,626

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,
	2014				2013
Deferred income tax assets:
Tax credit carryforwards	$	37			$	48
Net operating losses (NOLs)	436				338
Inventories	160				264
Property, plant, and equipment	—				8
Compensation and employee benefit liabilities	358				178
Environmental liabilities	92				92
Other	178				187
Total deferred income tax assets	1,261				1,115
Less: Valuation allowance	(393		)		(347		)
Net deferred income tax assets	868				768
Deferred income tax liabilities:
Property, plant, and equipment	6,682				6,536
Deferred turnaround costs	356				331
Inventories	426				310
Investments	152				94
Other	73				81
Total deferred income tax liabilities	7,689				7,352
Net deferred income tax liabilities	$	6,821			$	6,584

Income tax credit and loss carryforwards

We had the following income tax credit and loss carryforwards as of December 31, 2014 (in millions):

	Amount				Expiration
U.S. state income tax credits	$	53			2015 through 2027
U.S. state NOLs (gross amount)	6,574				2015 through 2034
International NOLs	1,630				Unlimited

Subsequently recognized tax benefits related to the valuation allowance for deferred income tax assets

Should we ultimately recognize tax benefits related to the valuation allowance for deferred income tax assets as of December 31, 2014, such amounts will be allocated as follows (in millions):

Income tax benefit	$	386
Additional paid-in capital	7
Total	$	393

Reconciliation of the change in unrecognized tax benefits

The following is a reconciliation of the change in unrecognized tax benefits, excluding related penalties, interest (net of the U.S. federal and state income tax effects), and the U.S. federal income tax effect of state unrecognized tax benefits (in millions):

	Year Ended December 31,
	2014				2013				2012
Balance as of beginning of year	$	950			$	341			$	326
Additions based on tax positions related to the current year	35				64				11
Additions for tax positions related to prior years	118				576				40
Reductions for tax positions related to prior years	(67		)		(26		)		(36		)
Reductions for tax positions related to the lapse of applicable statute of limitations	(1		)		(4		)		—
Settlements	(46		)		(1		)		—
Balance as of end of year	$	989			$	950			$	341

Reconciliation of unrecognized tax benefits to uncertain tax position liabilities

The following is a reconciliation of unrecognized tax benefits reflected in the table above to our uncertain tax position liabilities as of December 31, 2014 and 2013 that are reflected in Note 10 (in millions):

	December 31,
	2014				2013
Unrecognized tax benefits	$	989			$	950
Tax refund claim not recognized in our financial statements	(554		)		(556		)
Penalties, interest (net of U.S. federal and state income tax effect), and the U.S. federal income tax effect of state unrecognized tax benefits	49				49
Uncertain tax position liabilities	$	484			$	443

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