XML 103 R12.htm IDEA: XBRL DOCUMENT
v2.4.0.8

Income taxes | 12 Months Ended
--- | ---
Dec. 31, 2013
Income taxes | 3. Income taxes
millions of dollars |  | 2013 |  |  | 2012 |  |  | 2011 |
Current income tax expense |  |  | 425 |  |  |  | 593 |  |  |  | 955 |
Deferred income tax expense (a) |  |  | 484 |  |  |  | 634 |  |  |  | 80 |
Total income tax expense (b) |  |  | 909 |  |  |  | 1,227 |  |  |  | 1,035 |
Statutory corporate tax rate (percent) |  |  | 25.4 |  |  |  | 25.5 |  |  |  | 25.4 |
Increase/(decrease) resulting from: |  |  |  |  |  |  |  |  |  |  |  |
Enacted tax rate change |  |  |  |  |  |  | - |  |  |  | - |
Other |  |  | (1.1) |  |  |  | (0.9) |  |  |  | (1.9) |
Effective income tax rate |  |  | 24.3 |  |  |  | 24.6 |  |  |  | 23.5 |
(a) | There were no material net (charges)/credits for the effect of changes in tax laws and rates included in the provisions for deferred income taxes in 2013, 2012 and 2011.
(b) | Cash outflow from income taxes, plus investment credits earned, was $911 million in 2013 (2012 – $871 million, 2011 – $667 million).
Deferred income taxes are based on differences between the accounting and tax values of assets and liabilities. These differences in value are re-measured at each year-end using the tax rates and tax laws expected to apply when those differences are realized or settled in the future. Components of deferred income tax liabilities and assets as at December 31 were:
millions of dollars |  | 2013 |  |  | 2012 |  |  | 2011 |
Depreciation and amortization |  |  | 2,949 |  |  |  | 2,434 |  |  |  | 1,948 |
Successful drilling and land acquisitions |  |  | 815 |  |  |  | 399 |  |  |  | 378 |
Pension and benefits |  |  | (376 | ) |  |  | (717 | ) |  |  | (720 | )
Site restoration |  |  | (287 | ) |  |  | (284 | ) |  |  | (267 | )
Capitalized interest |  |  | 69 |  |  |  | 53 |  |  |  | 50 |
Other |  |  | (99 | ) |  |  | 39 |  |  |  | 51 |
Net long-term deferred income tax liabilities |  |  | 3,071 |  |  |  | 1,924 |  |  |  | 1,440 |
LIFO inventory valuation |  |  | (450 | ) |  |  | (478 | ) |  |  | (560 | )
Other |  |  | (109 | ) |  |  | (49 | ) |  |  | (30 | )
Net current deferred income tax assets |  |  | (559 | ) |  |  | (527 | ) |  |  | (590 | )
Valuation allowance |  |  | - |  |  |  | - |  |  |  | - |
Net deferred income tax liabilities |  |  | 2,512 |  |  |  | 1,397 |  |  |  | 850 |
Unrecognized tax benefits Unrecognized tax benefits reflect the difference between positions taken or expected to be taken on income tax returns and the amounts recognized in the financial statements. Resolution of the related tax positions will take many years to complete. It is difficult to predict the timing of resolution for tax positions, since such timing is not entirely within the control of the company. The company’s effective tax rate will be reduced if any of these tax benefits are subsequently recognized. The following table summarizes the movement in unrecognized tax benefits:
millions of dollars |  | 2013 |  |  | 2012 |  |  | 2011 |
Balance as at January 1 |  |  | 143 |  |  |  | 134 |  |  |  | 147 |
Additions based on current year’s tax position |  |  | 10 |  |  |  | 4 |  |  |  | - |
Additions for prior years’ tax positions |  |  | 2 |  |  |  | 10 |  |  |  | 20 |
Reductions for prior years’ tax positions |  |  | (4 | ) |  |  | (3 | ) |  |  | (31 | )
Reductions due to lapse of the statute of limitations |  |  | - |  |  |  | (2 | ) |  |  | (2 | )
Balance as at December 31 |  |  | 151 |  |  |  | 143 |  |  |  | 134 |
The 2013, 2012 and 2011 changes in unrecognized tax benefits did not have a material effect on the company’s net income or cash flow. The company’s tax filings from 2006 to 2013 are subject to examination by the tax authorities. The Canada Revenue Agency has proposed certain adjustments to the company’s filings. Management is currently evaluating those proposed adjustments and believes that a number of outstanding matters are expected to be resolved in 2014. The impact on unrecognized tax benefits and the company’s effective income tax rate from these matters is not expected to be material. The company classifies interest on income tax related balances as interest expense or interest income and classifies tax related penalties as operating expense.

X
- 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 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 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 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 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=6907707&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=6907707&loc=d3e32537-109319 Reference 6: 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=6907707&loc=d3e32559-109319 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration