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Income Taxes | 12 Months Ended
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Dec. 31, 2011
Income Taxes [Abstract] |
Income Taxes | 6. Income Taxes Income Tax Expense (Benefit) Devon's income tax components are presented in the following table.
| Year Ended December 31,
| 2011 | 2010 | 2009
| (In millions)
Current income tax (benefit) expense: |  |  |
U.S. federal | $ (143) | $ 244 | $ 45
Various states | 20 | 16 | 18
Canada and various provinces | (20) | 256 | 178
Total current tax (benefit) expense | (143) | 516 | 241
Deferred income tax expense (benefit): |  |  |
U.S. federal | 1,986 | 781 | (1,846)
Various states | 95 | 21 | (111)
Canada and various provinces | 218 | (83) | (57)
Total deferred tax expense (benefit) | 2,299 | 719 | (2,014)
Total income tax expense (benefit) | $ 2,156 | $ 1,235 | $ (1,773)
Total income tax expense (benefit) differed from the amounts computed by applying the U.S. federal income tax rate to earnings (loss) from continuing operations before income taxes as a result of the following:
| Year Ended December 31,
| 2011 | 2010 | 2009
| (In millions)
Expected income tax expense (benefit) based on U.S. statutory tax rate of 35% | $ 1,502 | $ 1,249 | $ (1,584)
Assumed repatriations. | 725 | 144 | 55
State income taxes | 70 | 31 | (99)
Taxation on Canadian operations | (91) | (60) | (31)
Other | (50) | (129) | (114)
Total income tax expense (benefit) | $ 2,156 | $ 1,235 | $ (1,773)
During 2011, 2010 and 2009, pursuant to the completed and planned divestitures of our International assets located outside North America, a portion of Devon's foreign earnings were no longer deemed to be permanently reinvested. Accordingly, Devon recognized deferred income tax expense of $725 million, $144 million and $55 million during 2011, 2010 and 2009 respectively, related to assumed repatriations of earnings from its foreign subsidiaries. Deferred Tax Assets and Liabilities The tax effects of temporary differences that gave rise to Devon's deferred tax assets and liabilities are p resented below:
| December 31,
| 2011 | 2010
Deferred tax assets: | (In millions)
Net operating loss carryforwards | $ 222 | $ 159
Asset retirement obligations | 447 | 494
Pension benefit obligations | 130 | 133
Other | 117 | 171
Total deferred tax assets | 916 | 957
Deferred tax liabilities: |  |
Property and equipment | (4,475) | (3,130)
Fair value of financial instruments | (218) | (70)
Long-term debt | (185) | (198)
Taxes on unremitted foreign earnings ( | (936) | (211)
Other | (27) | (20)
Total deferred tax liabilities | (5,841) | (3,629)
Net deferred tax liability | $ (4,925) | $ (2,672)
Devon has recognized $222 million of deferred tax assets related to various carryforwards available to offset future income taxes. The carryforwards consist of $829 million of Canadian net operating loss carryforwards, which expire between 2026 and 2031, and $206 million of state net operating loss carryforwards, which expire primarily between 2012 and 2031. Devon expects the tax benefits from the Canadian net operating loss carryforwards to be utilized between 2013 and 2017. Also, Devon expects the tax benefits from the state net operating loss carryforwards to be utilized between 2012 and 2016. Such expectations are based upon current estimates of taxable income during these periods, considering limitations on the annual utilization of these benefits as set forth by tax regulations. Significant changes in such estimates caused by variables such as future oil, gas and NGL prices or capital expenditures could alter the timing of the eventual utilization of such carryforwards. There can be no assurance that Devon will generate any specific level of continuing taxable earnings. However, management believes that Devon's future taxable income will more likely than not be sufficient to utilize substantially all its tax carryforwards prior to their expiration. As of December 31, 2011, approximately $5.4 billion of Devon's unremitted earnings from its foreign subsidiaries were deemed to be permanently reinvested. As a result, Devon has not recognized a deferred tax liability for U.S. income taxes associated with such earnings. If such earnings were to be remitted to the U.S., Devon may be subject to U.S. income taxes and foreign withholding taxes. However, it is not practical to estimate the amount of additional taxes that may be payable due to the inter-relationship of the various factors involved in making such an estimate. Unrecognized Tax Benefits The following table presents changes in Devon's unrecognized tax benefits.
| December 31,
| 2011 | 2010
| (In millions)
Balance at beginning of year | $ 194 | $ 272
Tax positions taken in prior periods | (3) | 40
Tax positions taken in current year | 27 | 5
Accrual of interest related to tax positions taken | (7) | 9
Lapse of statute of limitations | (41) | (5)
Settlements | (5) | (129)
Foreign currency translation | — | 2
Balance at end of year | $ 165 | $ 194
Devon's unrecognized tax benefit balance at December 31, 2011 and 2010, included $20 million and $27 million of interest and penalties, respectively. If recognized, all of Devon's unrecognized tax benefits as of December 31, 2011 would affect Devon's effective income tax rate. Included below is a summary of the tax years, by jurisdiction, that remain subject to examination by taxing authorities.
Jurisdiction | Tax Years Open
U.S. federal | 2008-2011
Various U.S. states | 2007-2011
Canada federal | 2003-2011
Various Canadian provinces | 2003-2011
Certain statute of limitation expirations are scheduled to occur in the next twelve months. However, Devon is currently in various stages of the administrative review process for certain open tax years. In addition, Devon is currently subject to various income tax audits that have not reached the administrative review process. As a result, Devon cannot reasonably anticipate the extent that the liabilities for unrecognized tax benefits will increase or decrease within the next twelve months.

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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 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 5: 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 Reference 6: 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 7: 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 8: 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=6881521&loc=d3e23780-122690 + Details
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