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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2017
Income Tax Disclosure [Abstract] |
Income from continuing operations before income tax expense from U.S. and international operations | Income before income tax expense (benefit) was as follows (in millions):
| Year Ended December 31,
| 2017 |  | 2016 |  | 2015
U.S. operations | $ | 2,283 |  |  | $ | 1,733 |  |  | $ | 5,327 |
International operations | 924 |  |  | 1,449 |  |  | 644 |
Income before income tax expense (benefit) | $ | 3,207 |  |  | $ | 3,182 |  |  | $ | 5,971 |
Reconciliation of income tax expense related to continuing operations to income tax expense at statutory rate | Statutory income tax rates applicable to the countries in which we operate were as follows:
| Year Ended December 31,
| 2017 |  | 2016 |  | 2015
U.S. (a) | 35 | % |  | 35 | % |  | 35 | %
Canada | 15 | % |  | 15 | % |  | 15 | %
U.K. | 19 | % |  | 20 | % |  | 20 | %
Ireland | 13 | % |  | 13 | % |  | 13 | %
Aruba (b) | n/a |  |  | 7 | % |  | 7 | %
___________________________
(a) | Statutory income tax rate was reduced to 21 percent effective January 1, 2018 as described in “Tax Reform” above.
(b) | Statutory income tax rate applicable through the date of the Aruba Disposition as described in Note 2.
The following is a reconciliation of income tax expense (benefit) computed by applying statutory income tax rates as reflected in the preceding table to actual income tax expense (benefit) related to our operations (in millions):
| Year Ended December 31, 2017
| U.S. |  | International |  | Total
| Amount |  | Percent |  | Amount |  | Percent |  | Amount |  | Percent
Income tax expense at statutory rates | $ | 799 |  |  | 35.0 | % |  | $ | 158 |  |  | 17.1 | % |  | $ | 957 |  |  | 29.8 | %
U.S. state and Canadian provincial tax expense, net of federal income tax effect | 37 |  |  | 1.6 | % |  | 46 |  |  | 5.0 | % |  | 83 |  |  | 2.6 | %
Permanent differences: |  |  |  |  |  |  |  |  |  |  |
Manufacturing deduction | (42 | ) |  | (1.8 | )% |  | — |  |  | — |  |  | (42 | ) |  | (1.3 | )%
Other | (9 | ) |  | (0.4 | )% |  | — |  |  | — |  |  | (9 | ) |  | (0.3 | )%
Change in tax law | (1,862 | ) |  | (81.6 | )% |  | — |  |  | — |  |  | (1,862 | ) |  | (58.1 | )%
Tax effects of income associated with noncontrolling interests | (31 | ) |  | (1.4 | )% |  | — |  |  | — |  |  | (31 | ) |  | (1.0 | )%
Other, net | (52 | ) |  | (2.3 | )% |  | 7 |  |  | 0.8 | % |  | (45 | ) |  | (1.4 | )%
Income tax expense (benefit) | $ | (1,160 | ) |  | (50.9 | )% |  | $ | 211 |  |  | 22.9 | % |  | $ | (949 | ) |  | (29.7 | )%
| Year Ended December 31, 2016
| U.S. |  | International |  | Total
| Amount |  | Percent |  | Amount |  | Percent |  | Amount |  | Percent
Income tax expense at statutory rates | $ | 606 |  |  | 35.0 | % |  | $ | 256 |  |  | 17.7 | % |  | $ | 862 |  |  | 27.1 | %
U.S. state and Canadian provincial tax expense, net of federal income tax effect | 5 |  |  | 0.3 | % |  | 31 |  |  | 2.1 | % |  | 36 |  |  | 1.1 | %
Permanent differences: |  |  |  |  |  |  |  |  |  |  |  |
Manufacturing deduction | (22 | ) |  | (1.3 | )% |  | — |  |  | — |  |  | (22 | ) |  | (0.7 | )%
Other | (3 | ) |  | (0.2 | )% |  | (10 | ) |  | (0.7 | )% |  | (13 | ) |  | (0.4 | )%
Change in tax law | — |  |  | — |  |  | (7 | ) |  | (0.5 | )% |  | (7 | ) |  | (0.2 | )%
Tax effects of income associated with noncontrolling interests | (44 | ) |  | (2.5 | )% |  | — |  |  | — |  |  | (44 | ) |  | (1.4 | )%
Other, net | (37 | ) |  | (2.1 | )% |  | (10 | ) |  | (0.7 | )% |  | (47 | ) |  | (1.5 | )%
Income tax expense | $ | 505 |  |  | 29.2 | % |  | $ | 260 |  |  | 17.9 | % |  | $ | 765 |  |  | 24.0 | %
| Year Ended December 31, 2015
| U.S. |  | International |  | Total
| Amount |  | Percent |  | Amount |  | Percent |  | Amount |  | Percent
Income tax expense at statutory rates | $ | 1,864 |  |  | 35.0 | % |  | $ | 92 |  |  | 14.3 | % |  | $ | 1,956 |  |  | 32.8 | %
U.S. state and Canadian provincial tax expense, net of federal income tax effect | 45 |  |  | 0.8 | % |  | 73 |  |  | 11.3 | % |  | 118 |  |  | 2.0 | %
Permanent differences: |  |  |  |  |  |  |  |  |  |  |  |
Manufacturing deduction | (102 | ) |  | (1.9 | )% |  | — |  |  | — |  |  | (102 | ) |  | (1.7 | )%
Other | (18 | ) |  | (0.3 | )% |  | (5 | ) |  | (0.8 | )% |  | (23 | ) |  | (0.4 | )%
Change in tax law | — |  |  | — |  |  | (17 | ) |  | (2.6 | )% |  | (17 | ) |  | (0.3 | )%
Tax effects of income associated with noncontrolling interests | (39 | ) |  | (0.7 | )% |  | — |  |  | — |  |  | (39 | ) |  | (0.7 | )%
Other, net | (25 | ) |  | (0.5 | )% |  | 2 |  |  | 0.3 | % |  | (23 | ) |  | (0.4 | )%
Income tax expense | $ | 1,725 |  |  | 32.4 | % |  | $ | 145 |  |  | 22.5 | % |  | $ | 1,870 |  |  | 31.3 | %
Components of income tax expense related to continuing operations | The following table details the components of our adjustment (in millions) to reflect the effects of Tax Reform for the year ended December 31, 2017, including (i) whether such amounts are complete, provisional, or incomplete, and (ii) the additional information that we need to obtain in order to complete the accounting as required by SAB 118. See “Tax Reform” above for a discussion of the provisions of SAB 118.
| Accounting Status |  | Amount
Income tax benefit from the remeasurement of U.S. deferred income tax assets and liabilities | Complete |  | $ | (2,643 | )
Tax on the deemed repatriation of the accumulated earnings and profits of our international subsidiaries | Provisional |  | 734 |
Recognition of foreign withholding tax, net of U.S. federal tax benefit | Complete |  | 47 |
Deductibility of certain executive compensation expense | Incomplete |  | — |
Income tax expense associated with the statutory income tax rate differential on accrual to return adjustments that may be identified upon completion of our U.S. federal income tax return in 2018 | Incomplete |  | — |
Foreign tax credit available to offset the tax on deemed repatriation of the accumulated earnings and profits of our international subsidiaries | Incomplete |  | — |
Estimated Tax Reform benefit |  |  | $ | (1,862 | )
Components of income tax expense (benefit) related to our operations were as follows (in millions):
| Year Ended December 31, 2017
| U.S. |  | International |  | Total
Current: |  |  |  |  |
Country | $ | 1,305 |  |  | $ | 194 |  |  | $ | 1,499 |
U.S. state / Canadian provincial | 34 |  |  | 61 |  |  | 95 |
Total current | 1,339 |  | (a) | 255 |  |  | 1,594 |
Deferred: |  |  |  |  |
Country | (2,522 | ) |  | (29 | ) |  | (2,551 | )
U.S. state / Canadian provincial | 23 |  |  | (15 | ) |  | 8 |
Total deferred | (2,499 | ) | (b) | (44 | ) |  | (2,543 | )
Income tax expense (benefit) | $ | (1,160 | ) |  | $ | 211 |  |  | $ | (949 | )
___________________________ See notes on page 116.
| Year Ended December 31, 2016
| U.S. |  | International |  | Total
Current: |  |  |  |  |
Country | $ | 294 |  |  | $ | 194 |  |  | $ | 488 |
U.S. state / Canadian provincial | 12 |  |  | 35 |  |  | 47 |
Total current | 306 |  |  | 229 |  |  | 535 |
Deferred: |  |  |  |  |
Country | 203 |  |  | 35 |  |  | 238 |
U.S. state / Canadian provincial | (4 | ) |  | (4 | ) |  | (8 | )
Total deferred | 199 |  |  | 31 |  |  | 230 |
Income tax expense | $ | 505 |  |  | $ | 260 |  |  | $ | 765 |
| Year Ended December 31, 2015
| U.S. |  | International |  | Total
Current: |  |  |  |  |
Country | $ | 1,513 |  |  | $ | 64 |  |  | $ | 1,577 |
U.S. state / Canadian provincial | 85 |  |  | 43 |  |  | 128 |
Total current | 1,598 |  |  | 107 |  |  | 1,705 |
Deferred: |  |  |  |  |
Country | 143 |  |  | 8 |  |  | 151 |
U.S. state / Canadian provincial | (16 | ) |  | 30 |  |  | 14 |
Total deferred | 127 |  |  | 38 |  |  | 165 |
Income tax expense | $ | 1,725 |  |  | $ | 145 |  |  | $ | 1,870 |
___________________________
(a) | Current income tax expense includes the effect of our $781 million Tax Reform adjustment as described in “Tax Reform” above.
(b) | Deferred income tax benefit includes the effect of our $2.6 billion Tax Reform adjustment as described in “Tax Reform” above.
Schedule of income taxes paid, net | Income taxes paid to U.S. and international taxing authorities were as follows (in millions):
| Year Ended December 31,
| 2017 |  | 2016 |  | 2015
U.S. | $ | 239 |  |  | $ | 241 |  |  | $ | 2,092 |
International | 171 |  |  | 203 |  |  | 1 |
Income taxes paid, net | $ | 410 |  |  | $ | 444 |  |  | $ | 2,093 |
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,
| 2017 |  | 2016
Deferred income tax assets: |  |  |
Tax credit carryforwards | $ | 69 |  |  | $ | 65 |
Net operating losses (NOLs) | 492 |  |  | 374 |
Inventories | 135 |  |  | 93 |
Compensation and employee benefit liabilities | 179 |  |  | 344 |
Environmental liabilities | 47 |  |  | 69 |
Other | 112 |  |  | 100 |
Total deferred income tax assets | 1,034 |  |  | 1,045 |
Valuation allowance | (498 | ) |  | (374 | )
Net deferred income tax assets | 536 |  |  | 671 |
Deferred income tax liabilities: |  |  |
Property, plant, and equipment | 4,545 |  |  | 6,900 |
Deferred turnaround costs | 272 |  |  | 450 |
Inventories | 243 |  |  | 356 |
Investments | 77 |  |  | 253 |
Other | 107 |  |  | 73 |
Total deferred income tax liabilities | 5,244 |  |  | 8,032 |
Net deferred income tax liabilities | $ | 4,708 |  |  | $ | 7,361 |
Income tax credit and loss carryforwards | We had the following income tax credit and loss carryforwards as of December 31, 2017 (in millions):
| Amount |  | Expiration
U.S. state income tax credits | $ | 76 |  |  | 2018 through 2031
U.S. state income tax credits | 11 |  |  | Unlimited
U.S. state NOLs (gross amount) | 9,441 |  |  | 2018 through 2037
Reconciliation of the change in unrecognized tax benefits | The following is a reconciliation of the change in unrecognized tax benefits, excluding related penalties and interest, (in millions):
| Year Ended December 31,
| 2017 |  | 2016 |  | 2015
Balance as of beginning of year | $ | 936 |  |  | $ | 964 |  |  | $ | 989 |
Additions based on tax positions related to the current year | 33 |  |  | 36 |  |  | 36 |
Additions for tax positions related to prior years | 15 |  |  | 11 |  |  | 83 |
Reductions for tax positions related to prior years | (42 | ) |  | (46 | ) |  | (82 | )
Reductions for tax positions related to the lapse of applicable statute of limitations | (1 | ) |  | (3 | ) |  | (3 | )
Settlements | — |  |  | (237 | ) |  | (59 | )
Reclassification of uncertain tax receivable to long-term receivable from IRS | — |  |  | 211 |  |  | — |
Balance as of end of year | $ | 941 |  |  | $ | 936 |  |  | $ | 964 |
Summary of income tax contingencies | The following is a reconciliation of unrecognized tax benefits reflected in the preceding table to our uncertain tax position liabilities that are presented in our balance sheets (in millions).
| December 31,
| 2017 |  | 2016
Unrecognized tax benefits | $ | 941 |  |  | $ | 936 |
Tax refund claim not presented in our balance sheets | (274 | ) |  | (433 | )
Other | 77 |  |  | (5 | )
Uncertain tax position liabilities presented in our balance sheets | $ | 744 |  |  | $ | 498 |
Amounts recognized in our balance sheets for uncertain tax positions include (in millions):
| December 31,
| 2017 |  | 2016
Income taxes payable | $ | — |  |  | $ | (7 | )
Other long-term liabilities | (723 | ) |  | (465 | )
Deferred tax liabilities | (21 | ) |  | (26 | )
Uncertain tax position liabilities presented in our balance sheets | $ | (744 | ) |  | $ | (498 | )

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