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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Components of the (provision)/benefit for income taxes on continuing operations

The components of the benefit (provision) for income taxes on continuing operations were:

	Year Ended December 31
Millions of dollars	2017			2016			2015
Current income taxes:
Federal	$	40		$	737		$	635
Foreign	(423		)	(415		)	(636		)
State	(14		)	35			51
Total current	(397		)	357			50
Deferred income taxes:
Federal	(678		)	1,343			(18		)
Foreign	(31		)	77			262
State	(25		)	81			(20		)
Total deferred	(734		)	1,501			224
Income tax benefit (provision)	$	(1,131	)	$	1,858		$	274

United States and foreign components of income from continuing operations before income taxes

The United States and foreign components of income (loss) from continuing operations before income taxes were as follows:

	Year Ended December 31
Millions of dollars	2017			2016			2015
United States	$	694		$	(6,636	)	$	(1,560	)
Foreign	(12		)	(989		)	624
Total	$	682		$	(7,625	)	$	(936	)

Reconciliations between the actual provision for income taxes on continuing operations and that computed by applying the US statutory rate to income from continuing operations before income taxes

Reconciliations between the actual provision for income taxes on continuing operations and that computed by applying the United States statutory rate to income (loss) from continuing operations before income taxes were as follows:

	Year Ended December 31
	2017		2016		2015
United States statutory rate	35.0	%	35.0	%	35.0	%
Impact of U.S. tax reform	113.0		—		—
Venezuela receivables adjustment	36.6		—		(7.5	)
Impact of foreign income taxed at different rates	(18.3	)	(3.2	)	17.0
Valuation allowance against tax assets	(6.2	)	(2.1	)	(8.3	)
Undistributed foreign earnings	3.8		(5.1	)	—
Adjustments of prior year taxes	(2.3	)	0.2		1.3
State income taxes	1.7		1.0		2.0
Domestic manufacturing deduction	—		(1.3	)	—
Non-deductible acquisition costs	—		0.6		(4.5	)
Other items, net	2.5		(0.7	)	(5.7	)
Total effective tax rate on continuing operations	165.8	%	24.4	%	29.3	%

Primary components of deferred tax assets and liabilities

The primary components of our deferred tax assets and liabilities were as follows:

	December 31
Millions of dollars	2017			2016
Gross deferred tax assets:
Net operating loss carryforwards	$	1,370		$	1,647
Foreign tax credit carryforwards	828			648
Employee compensation and benefits	263			352
Accrued liabilities	97			325
Other	416			536
Total gross deferred tax assets	2,974			3,508
Gross deferred tax liabilities:
Depreciation and amortization	315			585
Undistributed foreign earnings	242			406
Other	56			145
Total gross deferred tax liabilities	613			1,136
Valuation allowances	1,173			453
Net deferred income tax asset	$	1,188		$	1,919

Rollforward of unrecognized tax benefits and associated interest and penalties

The following table presents a rollforward of our unrecognized tax benefits and associated interest and penalties.

Millions of dollars	Unrecognized Tax Benefits				Interest and Penalties
Balance at January 1, 2015	$	314			$	56
Change in prior year tax positions	(33		)		7
Change in current year tax positions	62				1
Cash settlements with taxing authorities	(16		)		(15		)
Lapse of statute of limitations	(5		)		(2		)
Balance at December 31, 2015	$	322			$	47
Change in prior year tax positions	44				20
Change in current year tax positions	129				3
Cash settlements with taxing authorities	(62		)		(8		)
Lapse of statute of limitations	(6		)		(1		)
Balance at December 31, 2016	$	427		(a)	$	61
Change in prior year tax positions	(108		)		—
Change in current year tax positions	24				2
Cash settlements with taxing authorities	(6		)		—
Lapse of statute of limitations	(4		)		(3		)
Balance at December 31, 2017	$	333		(a)(b)	$	60

(a) Includes $9 million as of December 31, 2017 and $84 million as of December 31, 2016 in foreign unrecognized tax benefits that would give rise to a United States tax credit. As of December 31, 2017 and December 31, 2016, approximately $319 million and $257 million, respectively, of unrecognized tax benefits would positively impact the effective tax rate and be recognized as additional tax benefits in our statement of operations if resolved in our favor.

(b) Includes $23 million that could be resolved within the next 12 months.

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Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years.

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Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets.

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Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations.

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Tabular disclosure of income before income tax between domestic and foreign jurisdictions.

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Tabular disclosure for tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities and other income tax contingencies. Includes, but is not limited to, interest and penalties, reconciliation of unrecognized tax benefits, unrecognized tax benefits that would affect the effective tax rate, tax years that remain subject to examination by tax jurisdictions, and information about positions for which it is reasonably possible that amounts unrecognized will significantly change within 12 months.

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