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Income Taxes | 6 Months Ended
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Jun. 30, 2019
Income Tax Disclosure [Abstract] |
Income Taxes | 7.Income Taxes The following table presents Devon’s total income tax expense (benefit) and a reconciliation of its effective income tax rate to the U.S. statutory income tax rate.
|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
|  | 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018 |
Current income tax expense (benefit) |  | $ | 2 |  |  | $ | 13 |  |  | $ | (1 | ) |  | $ | 14 |
Deferred income tax expense (benefit) |  |  | 69 |  |  |  | — |  |  |  | (38 | ) |  |  | (4 | )
Total income tax expense (benefit) |  | $ | 71 |  |  | $ | 13 |  |  | $ | (39 | ) |  | $ | 10 |
U.S. statutory income tax rate |  |  | 21 | % |  |  | 21 | % |  |  | 21 | % |  |  | 21 | %
State income taxes |  |  | 8 | % |  |  | (1 | %) |  |  | 4 | % |  |  | (1 | %)
Other |  |  | 1 | % |  |  | 3 | % |  |  | (7 | %) |  |  | (2 | %)
Deferred tax asset valuation allowance |  |  | — | % |  |  | (26 | %) |  |  | — | % |  |  | (19 | %)
Effective income tax rate |  |  | 30 | % |  |  | (3 | %) |  |  | 18 | % |  |  | (1 | %)
Devon estimates its annual effective income tax rate to record its quarterly provision for income taxes in the various jurisdictions in which it operates. Statutory tax rate changes and other significant or unusual items are recognized as discrete items in the quarter in which they occur. In the second quarter of 2019, the deferred tax asset representing Devon’s U.S. state net operating loss that is subject to a valuation allowance increased by $11 million from the first quarter of 2019. The corresponding increase in the valuation allowance against the state net operating loss resulted in a deferred tax expense, which is included within state income taxes in the table above. In the table above, the “other” effect is primarily composed of permanent differences for which dollar amounts do not increase or decrease in relation to the change in pre-tax earnings. Generally, such items have an insignificant impact on Devon’s effective income tax rate. However, these items had a more noticeable impact to the rate in the first six months of 2019 due to the low relative net loss during the period. Through the first six months of 2018, Devon maintained a 100% valuation allowance against its U.S. deferred tax assets resulting from prior year cumulative financial losses, oil and gas impairments, and significant net operating losses for U.S. federal and state income tax. However, u pon closing the EnLink divestiture in the third quarter of 2018, Devon reassessed its position and determined that a full valuation allowance against its U.S. deferred tax assets was no longer necessary, maintaining only valuation allowances against certain deferred tax assets, including certain tax credits and state net operating losses. On June 27, 2019, Devon completed the sale of all of its Canadian operating assets. Devon’s foreign earnings have not been considered indefinitely reinvested since the announcement of the plan to separate the assets in the first quarter of 2019. As the separation took the form of an asset sale and Devon has retained certain non-operating obligations to be settled over time, Devon has not recorded a deferred tax asset or corresponding valuation allowance related to its Canadian investment. As the sale of all of its Canadian operating assets closed during the second quarter of 2019, Devon has recorded materially all tax impacts related to the Canadian business in discontinued operations. Additional information on these discontinued operations can be found in Note 18.

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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