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DOMESTIC AND FOREIGN INCOME TAXES | 12 Months Ended
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Dec. 31, 2016
DOMESTIC AND FOREIGN INCOME TAXES |
DOMESTIC AND FOREIGN INCOME TAXES |
NOTE 10 | DOMESTIC AND FOREIGN INCOME TAXES
The domestic and foreign components of income (loss) from continuing operations before domestic and foreign income taxes were as follows:
For the years ended December 31, (in millions) |  | Domestic |  | Foreign |  | Total
2016 |  | $ | (2,698 | ) |  | $ | 1,034 |  |  | $ | (1,664 | )
2015 |  | $ | (5,810 | ) |  | $ | (3,666 | ) |  | $ | (9,476 | )
2014 |  | $ | (732 | ) |  | $ | 2,273 |  |  | $ | 1,541 |
The provisions (credits) for domestic and foreign income taxes on continuing operations consisted of the following:
For the years ended December 31, (in millions) |  | United States Federal |  | State and Local |  | Foreign |  | Total
2016 |  |  |  |  |  |  |  |
Current |  | $ | (784 | ) |  | $ | 9 |  |  | $ | 630 |  |  | $ | (145 | )
Deferred |  | (505 | ) |  | (19 | ) |  | 7 |  |  | (517 | )
|  | $ | (1,289 | ) |  | $ | (10 | ) |  | $ | 637 |  |  | $ | (662 | )
2015 |  |  |  |  |  |  |  |
Current |  | $ | (810 | ) |  | $ | (31 | ) |  | $ | 883 |  |  | $ | 42 |
Deferred |  | (1,146 | ) |  | (83 | ) |  | (143 | ) |  | (1,372 | )
|  | $ | (1,956 | ) |  | $ | (114 | ) |  | $ | 740 |  |  | $ | (1,330 | )
2014 |  |  |  |  |  |  |  |
Current |  | $ | 870 |  |  | $ | 81 |  |  | $ | 1,912 |  |  | $ | 2,863 |
Deferred |  | (1,037 | ) |  | (71 | ) |  | (70 | ) |  | (1,178 | )
|  | $ | (167 | ) |  | $ | 10 |  |  | $ | 1,842 |  |  | $ | 1,685 |
The following reconciliation of the United States federal statutory income tax rate to Occidental’s worldwide effective tax rate on income from continuing operations is stated as a percentage of pre-tax income:
For the years ended December 31, |  | 2016 |  | 2015 |  | 2014
United States federal statutory tax rate |  | 35 | % |  | 35 | % |  | 35 | %
Other than temporary loss on available for sale investment in California Resources stock |  | (2 | ) |  | (1 | ) |  | 12 |
Enhanced oil recovery credit |  | 5 |  |  | — |  |  | — |
Tax benefit due to write off of exploration blocks |  | 14 |  |  | — |  |  | — |
Operations outside the United States |  | (14 | ) |  | (21 | ) |  | 65 |
State income taxes, net of federal benefit |  | — |  |  | 1 |  |  | 1 |
Other |  | 2 |  |  | — |  |  | (4 | )
Worldwide effective tax rate |  | 40 | % |  | 14 | % |  | 109 | %
The tax effects of temporary differences resulting in deferred income taxes at December 31, 2016 and 2015 were as follows:
|  | 2016 |  | 2015
Tax effects of temporary differences (in millions) |  | Deferred Tax Assets |  | Deferred Tax Liabilities |  | Deferred Tax Assets |  | Deferred Tax Liabilities
Property, plant and equipment differences |  | $ | — |  |  | $ | 3,345 |  |  | $ | — |  |  | $ | 3,232 |
Equity investments, partnerships and foreign subsidiaries |  | — |  |  | 58 |  |  | — |  |  | 12 |
Environmental reserves |  | 314 |  |  | — |  |  | 136 |  |  | — |
Postretirement benefit accruals |  | 342 |  |  | — |  |  | 346 |  |  | — |
Deferred compensation and benefits |  | 222 |  |  | — |  |  | 179 |  |  | — |
Asset retirement obligations |  | 406 |  |  | — |  |  | 372 |  |  | — |
Foreign tax credit carryforwards |  | 2,046 |  |  | — |  |  | 2,034 |  |  | — |
Alternative minimum tax credit carryforwards |  | 226 |  |  | — |  |  | — |  |  | — |
General business credit carryforwards |  | 186 |  |  | — |  |  | — |  |  | — |
Federal benefit of state income taxes |  | 8 |  |  | — |  |  | 11 |  |  | — |
All other |  | 370 |  |  | — |  |  | 677 |  |  | — |
Subtotal |  | 4,120 |  |  | 3,403 |  |  | 3,755 |  |  | 3,244 |
Valuation allowance |  | (1,849 | ) |  | — |  |  | (1,834 | ) |  | — |
Total deferred taxes |  | $ | 2,271 |  |  | $ | 3,403 |  |  | $ | 1,921 |  |  | $ | 3,244 |
Total deferred tax assets were $2.3 billion and $1.9 billion as of December 31, 2016 and 2015, respectively. Occidental expects to realize the recorded deferred tax assets, net of any allowances, through future operating income and reversal of temporary differences. The reduction in the net deferred tax liabilities is primarily related to the addition of deferred tax benefits associated with various tax credit carryforwards as well as a net reduction in the deferred tax asset related to the allowance for bad debts. Occidental had, as of December 31, 2016, foreign tax credit carryforward of $2.0 billion, which expire in varying amounts through 2026, and various state operating loss carryforwards, which have varying carryforward periods through 2036. In addition, Occidental had, as of December 31, 2016, alternative minimum tax credit carryforwards of $226 million, that do not expire, and $186 million of general business credit carryforwards that expire between 2023 and 2036. Occidental's valuation allowance provides for substantially all of the foreign tax credit. A deferred tax liability has not been recognized for temporary differences related to unremitted earnings of certain consolidated foreign subsidiaries aggregating approximately $8.5 billion, net of foreign taxes, at December 31, 2016 , as it is Occidental’s intention to reinvest such earnings permanently. If the earnings of these foreign subsidiaries were not indefinitely reinvested, an additional deferred tax liability of approximately $116 million would be required, assuming utilization of available foreign tax credits. Discontinued operations include income tax charges of $249 million, $1 million, and $454 million in 2016, 2015, and 2014, respectively. As of December 31, 2016, Occidental had liabilities for unrecognized tax benefits of approximately $22 million included in deferred credits and other liabilities – other, all of which, if subsequently recognized, would favorably affect Occidental’s effective tax rate. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
For the years ended December 31, (in millions) |  | 2016 |  | 2015
Balance at January 1, |  | $ | 22 |  |  | $ | 61 |
Reductions based on tax positions related to prior years and settlements |  | — |  |  | (39 | )
Balance at December 31, |  | $ | 22 |  |  | $ | 22 |
Management believes it is unlikely that Occidental’s liabilities for unrecognized tax benefits related to existing matters would increase or decrease within the next 12 months by a material amount. Occidental cannot reasonably estimate a range of potential changes in such benefits due to the unresolved nature of the various audits. Occidental has recognized $761 million and $297 million in income tax receivables at December 31, 2016 and 2015, respectively, which were recorded in other current assets. Occidental is subject to audit by various tax authorities in varying periods. See Note 9 for a discussion of these matters. Occidental records estimated potential interest and penalties related to liabilities for unrecognized tax benefits in the provisions for domestic and foreign income taxes and these amounts were not material for the years ended December 31, 2016, 2015 and 2014.

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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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32559-109319 Reference 3: 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=65882285&loc=d3e32718-109319 Reference 4: 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=65882285&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32537-109319 + Details
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