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Income Taxes | 12 Months Ended
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Dec. 31, 2021
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The components of the (provision) benefit for income taxes on continuing operations were:
| Year Ended December 31
Millions of dollars | 2021 | 2020 | 2019
Current income taxes: |  |  |
Federal | $ | 6 |  | $ | 1 |  | $ | 32 |
Foreign | (270) |  | (167) |  | (426) |
State | (6) |  | — |  | (9) |
Total current | (270) |  | (166) |  | (403) |
Deferred income taxes: |  |  |
Federal | 533 |  | 372 |  | 383 |
Foreign | (47) |  | 2 |  | (36) |
State | — |  | 70 |  | 49 |
Total deferred | 486 |  | 444 |  | 396 |
Income tax (provision) benefit | $ | 216 |  | $ | 278 |  | $ | (7) |
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 | 2021 | 2020 | 2019
United States | $ | 283 |  | $ | (3,031) |  | $ | (1,517) |
Foreign | 969 |  | (189) |  | 395 |
Total | $ | 1,252 |  | $ | (3,220) |  | $ | (1,122) |
Reconciliations between the actual (provision) benefit 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
| 2021 | 2020 | 2019
United States statutory rate | 21.0 | % | 21.0 | % | 21.0 | %
Valuation allowance against tax assets | (44.5) |  | 0.9 |  | (10.7) |
Impact of foreign income taxed at different rates | 2.5 |  | (1.1) |  | 0.8 |
Adjustments of prior year taxes | 1.3 |  | 0.7 |  | 13.0 |
State income taxes | 0.1 |  | — |  | (1.3) |
Impact of impairments and other charges | — |  | (12.3) |  | (20.9) |
Other items, net | 2.4 |  | (0.6) |  | (2.5) |
Total effective tax rate on continuing operations | (17.2) | % | 8.6 | % | (0.6) | %
During the year ended December 31, 2021, we recorded a total income tax benefit of $216 million on pre-tax income of $1.3 billion, resulting in an effective tax rate of -17.2%. The effective tax rate for 2021 was primarily impacted by our geographic mix of earnings, tax adjustments related to the reassessment of prior year tax accruals, and valuation allowances on some of our deferred tax assets. The decrease in our valuation allowances results from increased future years’ forecasted taxable income before the expiration of foreign tax credits and net operating losses as a direct result of improved energy market conditions that led to the release of approximately $519 million valuation allowance on foreign tax credits. The primary components of our deferred tax assets and liabilities were as follows:
| December 31
Millions of dollars | 2021 | 2020
Gross deferred tax assets: |  |
Foreign tax credit carryforwards | $ | 1,041 |  | $ | 945 |
Intangible assets | 924 |  | — |
Net operating loss carryforwards | 736 |  | 1,691 |
Accrued liabilities | 292 |  | 263 |
Research and development tax credit carryforwards | 203 |  | 196 |
Employee compensation and benefits | 166 |  | 237 |
Other | 457 |  | 469 |
Total gross deferred tax assets | 3,819 |  | 3,801 |
Gross deferred tax liabilities: |  |
Operating lease right-of-use assets | 160 |  | 86 |
Depreciation and amortization | 131 |  | 7 |
Other | 9 |  | 155 |
Total gross deferred tax liabilities | 300 |  | 248 |
Valuation allowances | 885 |  | 1,394 |
Net deferred income tax asset | $ | 2,634 |  | $ | 2,159 |
At December 31, 2021, we had $795 million of domestic and foreign tax-effected net operating loss carryforwards, with approximately $59 million estimated to be utilized against our unrecognized tax benefits. In addition, we had approximately $1.2 billion of foreign tax credits carryforwards, the majority of which will begin expiring in tax years after 2024. The ultimate realization of these deferred tax assets depends on our ability to generate sufficient taxable income in the appropriate taxing jurisdiction. Our deferred tax assets from net operating losses, foreign tax credits, and research and development credits will expire as follows:
Millions of dollars | U.S. Net Operating Loss | Foreign Net Operating Loss | Foreign Tax Credits | Research and Development Credit | Total
2022-2026 | $ | 2 |  | $ | 133 |  | $ | 668 |  | $ | — |  | $ | 803 |
2027-2031 | 8 |  | 73 |  | 510 |  | — |  | 591 |
2032-2041 | 52 |  | 108 |  | — |  | 203 |  | 363 |
Non-Expiring | 9 |  | 410 |  | — |  | — |  | 419 |
| $ | 71 |  | $ | 724 |  | $ | 1,178 |  | $ | 203 |  | $ | 2,176 |
During the year ended December 31, 2021, our valuation allowance on deferred tax assets decreased by $509 million, primarily attributable to the release of $519 million associated with foreign tax credits as discussed above. We have not provided incremental United States income taxes or foreign withholding taxes on undistributed foreign subsidiaries' earnings after December 31, 2017. We generally do not provide for taxes related to its undistributed earnings because such earnings either would not be taxable when remitted or they are considered to be indefinitely reinvested. 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, 2019 | $ | 417 |  |  | $ | 67 |
Change in prior year tax positions | 25 |  |  | 11 |
Change in current year tax positions | 29 |  |  | — |
Cash settlements with taxing authorities | (4) |  |  | — |
Lapse of statute of limitations | (42) |  |  | (8) |
Balance at December 31, 2019 | $ | 425 |  |  | $ | 70 |
Change in prior year tax positions | (66) |  |  | 6 |
Change in current year tax positions | 16 |  |  | — |
Cash settlements with taxing authorities | (3) |  |  | — |
Lapse of statute of limitations | (17) |  |  | (5) |
Balance at December 31, 2020 | $ | 355 |  | (a) | $ | 71 |
Change in prior year tax positions | 14 |  |  | 4 |
Change in current year tax positions | 14 |  |  | 2 |
Cash settlements with taxing authorities | (10) |  |  | — |
Lapse of statute of limitations | (21) |  |  | (5) |
Balance at December 31, 2021 | $ | 352 |  | (a)(b) | $ | 72 |
(a) | Includes $20 million as of December 31, 2021 and $18 million as of December 31, 2020 in foreign unrecognized tax benefits that would give rise to a United States tax credit. As of December 31, 2021 and December 31, 2020, a net $272 million and $224 million without a net operating loss carryforward offset, 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 $69 million that could be resolved within the next 12 months.
Our tax returns are subject to review by the taxing authorities in the jurisdictions where we file tax returns. In most cases we are no longer subject to examination by tax authorities for years before 2010. The only significant operating jurisdiction that has tax filings under review or subject to examination by the tax authorities is the United States. The United States federal income tax filings for tax years 2016 through 2020 are currently under review or remain open for review by the U.S. Internal Revenue Service.

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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/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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