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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2021
Income Tax Disclosure [Abstract] |
Income (loss) before income tax expense (benefit) from U.S. and international operations | Income (loss) before income tax expense (benefit) was as follows (in millions):
| Year Ended December 31,
| 2021 |  | 2020 |  | 2019
U.S. operations | $ | 1,023 |  |  | $ | (2,072) |  |  | $ | 2,496 |
Foreign operations | 520 |  |  | 62 |  |  | 990 |
Income (loss) before income tax expense (benefit) | $ | 1,543 |  |  | $ | (2,010) |  |  | $ | 3,486 |
Reconciliation of income tax expense (benefit) related to continuing operations to income tax expense (benefit) at statutory rate | Statutory income tax rates applicable to the countries in which we operate during each of the years ended December 31, 2021, 2020, and 2019 were as follows:
U.S. | 21 | %
Canada | 15 | %
U.K. | 19 | %
Ireland | 13 | %
Peru | 30 | %
Mexico | 30 | %
The following is a reconciliation of income tax expense (benefit) computed by applying statutory income tax rates to actual income tax expense (benefit) (in millions):
| U.S. |  | Foreign |  | Total
| Amount |  | Percent |  | Amount |  | Percent |  | Amount |  | Percent
Year ended December 31, 2021 |  |  |  |  |  |  |  |  |  |  |
Income tax expense at statutory rates | $ | 215 |  |  | 21.0 | % |  | $ | 73 |  |  | 14.0 | % |  | $ | 288 |  |  | 18.7 | %
U.S. state and Canadian provincial tax expense, net of federal income tax effect | 16 |  |  | 1.6 | % |  | 53 |  |  | 10.2 | % |  | 69 |  |  | 4.5 | %
Permanent differences | (34) |  |  | (3.3) | % |  | (14) |  |  | (2.7) | % |  | (48) |  |  | (3.1) | %
Changes in tax law (a) | (10) |  |  | (1.0) | % |  | 74 |  |  | 14.2 | % |  | 64 |  |  | 4.1 | %
CARES Act (b) | (56) |  |  | (5.5) | % |  | — |  |  | — |  |  | (56) |  |  | (3.6) | %
GILTI tax | 125 |  |  | 12.2 | % |  | — |  |  | — |  |  | 125 |  |  | 8.1 | %
Foreign tax credits | (103) |  |  | (10.1) | % |  | — |  |  | — |  |  | (103) |  |  | (6.7) | %
Settlements | (22) |  |  | (2.1) | % |  | — |  |  | — |  |  | (22) |  |  | (1.4) | %
Tax effects of income associated with noncontrolling interests | (74) |  |  | (7.2) | % |  | 30 |  |  | 5.8 | % |  | (44) |  |  | (2.9) | %
Other, net | (7) |  |  | (0.7) | % |  | (11) |  |  | (2.1) | % |  | (18) |  |  | (1.2) | %
Income tax expense | $ | 50 |  |  | 4.9 | % |  | $ | 205 |  |  | 39.4 | % |  | $ | 255 |  |  | 16.5 | %
________________________ See notes on page 117.
| U.S. |  | Foreign |  | Total
| Amount |  | Percent |  | Amount |  | Percent |  | Amount |  | Percent
Year ended December 31, 2020 |  |  |  |  |  |  |  |  |  |  |
Income tax benefit at statutory rates | $ | (435) |  |  | 21.0 | % |  | $ | (10) |  |  | (16.1) | % |  | $ | (445) |  |  | 22.1 | %
U.S. state and Canadian provincial tax expense (benefit), net of federal income tax effect | (33) |  |  | 1.6 | % |  | 27 |  |  | 43.5 | % |  | (6) |  |  | 0.3 | %
Permanent differences | (23) |  |  | 1.1 | % |  | 15 |  |  | 24.2 | % |  | (8) |  |  | 0.4 | %
CARES Act (b) | (360) |  |  | 17.4 | % |  | — |  |  | — |  |  | (360) |  |  | 17.9 | %
Lapse of federal statute of limitations | (39) |  |  | 1.8 | % |  | — |  |  | — |  |  | (39) |  |  | 1.9 | %
Change in tax law | — |  |  | — |  |  | 21 |  |  | 33.9 | % |  | 21 |  |  | (1.0) | %
Tax effects of income associated with noncontrolling interests | (66) |  |  | 3.2 | % |  | (8) |  |  | (12.9) | % |  | (74) |  |  | 3.7 | %
Other, net | 7 |  |  | (0.3) | % |  | 1 |  |  | 1.6 | % |  | 8 |  |  | (0.4) | %
Income tax expense (benefit) | $ | (949) |  |  | 45.8 | % |  | $ | 46 |  |  | 74.2 | % |  | $ | (903) |  |  | 44.9 | %
Year ended December 31, 2019 |  |  |  |  |  |  |  |  |  |  |
Income tax expense at statutory rates | $ | 524 |  |  | 21.0 | % |  | $ | 147 |  |  | 14.8 | % |  | $ | 671 |  |  | 19.2 | %
U.S. state and Canadian provincial tax expense, net of federal income tax effect | 16 |  |  | 0.7 | % |  | 88 |  |  | 8.9 | % |  | 104 |  |  | 3.0 | %
Permanent differences | (36) |  |  | (1.5) | % |  | 10 |  |  | 1.0 | % |  | (26) |  |  | (0.7) | %
GILTI tax | 115 |  |  | 4.6 | % |  | — |  |  | — |  |  | 115 |  |  | 3.3 | %
Foreign tax credits | (95) |  |  | (3.8) | % |  | — |  |  | — |  |  | (95) |  |  | (2.7) | %
Repatriation withholding tax | 45 |  |  | 1.8 | % |  | — |  |  | — |  |  | 45 |  |  | 1.3 | %
Tax effects of income associated with noncontrolling interests | (77) |  |  | (3.1) | % |  | 2 |  |  | 0.2 | % |  | (75) |  |  | (2.2) | %
Other, net | (36) |  |  | (1.4) | % |  | (1) |  |  | (0.1) | % |  | (37) |  |  | (1.1) | %
Income tax expense | $ | 456 |  |  | 18.3 | % |  | $ | 246 |  |  | 24.8 | % |  | $ | 702 |  |  | 20.1 | %
________________________ (a)During the three months ended June 30, 2021, certain statutory income tax rate changes (primarily an increase in the U.K. rate from 19 percent to 25 percent effective in 2023) were enacted that resulted in the remeasurement of our deferred tax liabilities and related deferred income tax expense. (b)See “CARES Act” on page 122 for a discussion of significant changes in tax law in the U.S. that were enacted in 2020.
Components of income tax expense (benefit) | Components of income tax expense (benefit) were as follows (in millions):
| U.S. |  | Foreign |  | Total
Year ended December 31, 2021 |  |  |  |  |
Current: |  |  |  |  |
Country | $ | 68 |  |  | $ | 215 |  |  | $ | 283 |
U.S. state / Canadian provincial | 1 |  |  | 97 |  |  | 98 |
Total current | 69 |  |  | 312 |  |  | 381 |
Deferred: |  |  |  |  |
Country | 5 |  |  | (63) |  |  | (58) |
U.S. state / Canadian provincial | (24) |  |  | (44) |  |  | (68) |
Total deferred | (19) |  |  | (107) |  |  | (126) |
Income tax expense | $ | 50 |  |  | $ | 205 |  |  | $ | 255 |
Year ended December 31, 2020 |  |  |  |  |
Current: |  |  |  |  |
Country | $ | (1,033) |  |  | $ | (34) |  |  | $ | (1,067) |
U.S. state / Canadian provincial | 9 |  |  | (3) |  |  | 6 |
Total current | (1,024) |  |  | (37) |  |  | (1,061) |
Deferred: |  |  |  |  |
Country | 126 |  |  | 53 |  |  | 179 |
U.S. state / Canadian provincial | (51) |  |  | 30 |  |  | (21) |
Total deferred | 75 |  |  | 83 |  |  | 158 |
Income tax expense (benefit) | $ | (949) |  |  | $ | 46 |  |  | $ | (903) |
Year ended December 31, 2019 |  |  |  |  |
Current: |  |  |  |  |
Country | $ | 145 |  |  | $ | 186 |  |  | $ | 331 |
U.S. state / Canadian provincial | 37 |  |  | 100 |  |  | 137 |
Total current | 182 |  |  | 286 |  |  | 468 |
Deferred: |  |  |  |  |
Country | 290 |  |  | (28) |  |  | 262 |
U.S. state / Canadian provincial | (16) |  |  | (12) |  |  | (28) |
Total deferred | 274 |  |  | (40) |  |  | 234 |
Income tax expense | $ | 456 |  |  | $ | 246 |  |  | $ | 702 |
Schedule of income taxes paid (refunded), net | Income taxes paid to (received from) U.S. and foreign taxing authorities were as follows (in millions):
| Year Ended December 31, |
| 2021 |  | 2020 |  | 2019 |
U.S. | $ | (878) |  | (a) | $ | 130 |  |  | $ | (298) |  | (b)
Foreign | 36 |  |  | 73 |  |  | 182 |  |
Income taxes paid (refunded), net | $ | (842) |  |  | $ | 203 |  |  | $ | (116) |  |
________________________ (a)This amount includes a refund of $962 million that we received related to our U.S. federal income tax return for 2020. (b)This amount includes a refund of $348 million, including interest, that we received related to the settlement of the combined audit of our U.S. federal income tax returns for 2010 and 2011. See “Tax Returns Under Audit–U.S. Federal” on page 121.
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,
| 2021 |  | 2020
Deferred income tax assets: |  |  |
Tax credit carryforwards | $ | 679 |  |  | $ | 681 |
NOLs | 697 |  |  | 678 |
Inventories | 217 |  |  | 70 |
Compensation and employee benefit liabilities | 123 |  |  | 199 |
Environmental liabilities | 53 |  |  | 64 |
Other | 149 |  |  | 128 |
Total deferred income tax assets | 1,918 |  |  | 1,820 |
Valuation allowance | (1,262) |  |  | (1,223) |
Net deferred income tax assets | 656 |  |  | 597 |
Deferred income tax liabilities: |  |  |
Property, plant, and equipment | 4,866 |  |  | 4,895 |
Deferred turnaround costs | 308 |  |  | 302 |
Inventories | 191 |  |  | 269 |
Investments | 268 |  |  | 171 |
Other | 233 |  |  | 235 |
Total deferred income tax liabilities | 5,866 |  |  | 5,872 |
Net deferred income tax liabilities | $ | 5,210 |  |  | $ | 5,275 |
Income tax credit and loss carryforwards | We had the following income tax credit and loss carryforwards as of December 31, 2021 (in millions):
| Amount |  | Expiration
U.S. state income tax credits (gross amount) | $ | 80 |  |  | 2022 through 2033
U.S. state income tax credits (gross amount) | 21 |  |  | Unlimited
U.S. foreign tax credits | 598 |  |  | 2027
U.S. state income tax NOLs (gross amount) | 12,394 |  |  | 2022 through 2041
U.S. state income tax NOLs (gross amount) | 465 |  |  | Unlimited
Foreign NOLs (gross amount) | 38 |  |  | 2025 through 2031
Foreign NOLs (gross amount) | 59 |  |  | Unlimited
Reconciliation of the change in unrecognized tax benefits | The following is a reconciliation of the change in unrecognized tax benefits, excluding related interest and penalties, (in millions):
| Year Ended December 31,
| 2021 |  | 2020 |  | 2019
Balance as of beginning of year | $ | 847 |  |  | $ | 897 |  |  | $ | 970 |
Additions for tax positions related to the current year | 3 |  |  | 5 |  |  | 19 |
Additions for tax positions related to prior years | 13 |  |  | 9 |  |  | 30 |
Reductions for tax positions related to prior years | (25) |  |  | (20) |  |  | (101) |
Reductions for tax positions related to the lapse of applicable statute of limitations | — |  |  | (44) |  |  | (14) |
Settlements | (22) |  |  | — |  |  | (7) |
Balance as of end of year | $ | 816 |  |  | $ | 847 |  |  | $ | 897 |
Additional information about our liability for unrecognized tax benefits | The following is a reconciliation of unrecognized tax benefits to our liability for unrecognized tax benefits presented in our balance sheets (in millions).
| December 31,
| 2021 |  | 2020
Unrecognized tax benefits | $ | 816 |  |  | $ | 847 |
Tax refund claims not yet filed but that we intend to file | (28) |  |  | (26) |
Interest and penalties | 86 |  |  | 110 |
Liability for unrecognized tax benefits presented in our balance sheets | $ | 874 |  |  | $ | 931 |
Our liability for unrecognized tax benefits is reflected in the following balance sheet line items (in millions):
| December 31,
| 2021 |  | 2020
Income taxes payable | $ | 1 |  |  | $ | 59 |
Other long-term liabilities | 863 |  |  | 859 |
Deferred tax liabilities | 10 |  |  | 13 |
Liability for unrecognized tax benefits presented in our balance sheets | $ | 874 |  |  | $ | 931 |

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