XML 89 R20.htm IDEA: XBRL DOCUMENT
v3.24.0.1

INCOME TAXES | 12 Months Ended
--- | ---
Dec. 31, 2023
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES Net income before income taxes was composed of the following:
|  | For the Year Ended December 31,
|  | 2023 |  | 2022 |  | 2021
|  | (In millions)
U.S. |  | $ | 627 |  |  | $ | 2,675 |  |  | $ | 629 |
Foreign |  | 2,256 |  |  | 3,059 |  |  | 1,262 |
Total |  | $ | 2,883 |  |  | $ | 5,734 |  |  | $ | 1,891 |
The total income tax provision (benefit) consisted of the following:
|  | For the Year Ended December 31,
|  | 2023 |  | 2022 |  | 2021
|  | (In millions)
Current income taxes: |  |  |  |  |  |
Federal |  | $ | 2 |  |  | $ | 1 |  |  | $ | 16 |
State |  | 6 |  |  | 11 |  |  | — |
Foreign |  | 1,330 |  |  | 1,495 |  |  | 636 |
|  | 1,338 |  |  | 1,507 |  |  | 652 |
Deferred income taxes: |  |  |  |  |  |
Federal |  | (1,708) |  |  | — |  |  | — |
State |  | (32) |  |  | — |  |  | — |
Foreign |  | 78 |  |  | 145 |  |  | (74) |
|  | (1,662) |  |  | 145 |  |  | (74) |
Total |  | $ | (324) |  |  | $ | 1,652 |  |  | $ | 578 |
The total income tax provision differs from the amounts computed by applying the U.S. statutory income tax rate to income (loss) before income taxes. A reconciliation of the tax on the Company’s net income before income taxes and total income tax provision (benefit) is shown below:
|  | For the Year Ended December 31,
|  | 2023 |  | 2022 |  | 2021
|  | (In millions)
Income tax expense at U.S. statutory rate |  | $ | 605 |  |  | $ | 1,204 |  |  | $ | 397 |
State income tax, less federal effect(1) |  | (23) |  |  | 9 |  |  | — |
Taxes related to foreign operations |  | 752 |  |  | 745 |  |  | 298 |
Tax credits |  | — |  |  | (4) |  |  | (10) |
Net change in tax contingencies |  | 5 |  |  | 1 |  |  | 16 |
Valuation allowances(1) |  | (1,842) |  |  | (646) |  |  | (90) |
Tax adjustments attributable to BCP Business Combination |  | — |  |  | 126 |  |  | — |
Remeasurement of U.K. deferred tax liability |  | 174 |  |  | 208 |  |  | — |
Tax attributable to Altus Preferred Unit limited partners |  | — |  |  | — |  |  | (34) |
All other, net |  | 5 |  |  | 9 |  |  | 1 |
|  | $ | (324) |  |  | $ | 1,652 |  |  | $ | 578 |
(1)The change in state valuation allowance is included as a component of state income tax. The net deferred income tax (asset) liability reflects the net tax impact of temporary differences between the asset and liability amounts carried on the balance sheet under GAAP and amounts utilized for income tax purposes. The net deferred income tax (asset) liability consisted of the following as of December 31:
|  | 2023 |  | 2022
|  | (In millions)
Deferred tax assets: |  |  |  |
U.S. and state net operating losses |  | $ | 2,050 |  |  | $ | 2,029 |
Capital losses |  | 8 |  |  | 357 |
Foreign net operating losses |  | 43 |  |  | 27 |
Tax credits and other tax incentives |  | 26 |  |  | 26 |
Foreign tax credits |  | 2,204 |  |  | 2,241 |
Accrued expenses and liabilities |  | 129 |  |  | 156 |
Asset retirement obligation |  | 850 |  |  | 672 |
Property and equipment |  | 38 |  |  | 44 |
Equity investments |  | 8 |  |  | — |
Net interest expense limitation |  | 125 |  |  | 74 |
Lease liability |  | 71 |  |  | 114 |
Decommissioning contingency for sold Gulf of Mexico properties |  | 210 |  |  | 275 |
Total deferred tax assets |  | 5,762 |  |  | 6,015 |
Valuation allowance |  | (2,630) |  |  | (4,918) |
Net deferred tax assets |  | 3,132 |  |  | 1,097 |
Deferred tax liabilities: |  |  |  |
Equity investments |  | — |  |  | 1 |
Property and equipment |  | 1,573 |  |  | 1,023 |
Right-of-use asset |  | 69 |  |  | 110 |
Decommissioning security for sold Gulf of Mexico properties |  | 44 |  |  | 148 |
Other |  | 59 |  |  | 90 |
Total deferred tax liabilities |  | 1,745 |  |  | 1,372 |
Net deferred income tax (asset) liability |  | $ | (1,387) |  |  | $ | 275 |
Net deferred tax assets and liabilities are included in the consolidated balance sheet as of December 31 as follows:
|  | 2023 |  | 2022
|  | (In millions)
Assets: |  |  |  |
Other assets |  |  |  |
Deferred tax asset |  | $ | 1,758 |  |  | $ | 39 |
Liabilities: |  |  |  |
Deferred credits and other noncurrent liabilities |  |  |  |
Deferred tax liability |  | 371 |  |  | 314 |
Net deferred income tax (asset) liability |  | $ | (1,387) |  |  | $ | 275 |
On July 14, 2022, the Energy (Oil and Gas) Profits Levy Act of 2022 (the Energy Profits Levy) was enacted, receiving Royal Assent. Under the law, an additional levy was assessed at a 25 percent rate and is effective for the period of May 26, 2022, through December 31, 2025. The Finance Act 2023 included amendments to the Energy Profits Levy that increased the levy from a 25 percent rate to a 35 percent rate, effective for the period of January 1, 2023 through March 31, 2028. Under U.S. GAAP, the financial statement impact of new legislation is recorded in the period of enactment. As a result, the Company recorded a deferred tax expense of $208 million and $174 million related to the remeasurement of the U.K. deferred tax liability in 2022 and 2023, respectively. On August 16, 2022, the U.S. enacted the Inflation Reduction Act of 2022 (IRA). The IRA includes a new 15 percent corporate alternative minimum tax (CAMT) on applicable corporations with an average annual adjusted financial statement income that exceeds $1 billion for any three consecutive years preceding the tax year at issue. The CAMT is effective for tax years beginning after December 31, 2022. The Company is not an applicable corporation in 2023 but will be subject to CAMT beginning on January 1, 2024. The Company is continuing to evaluate the provisions of the IRA and its effects on the Company’s consolidated financial statements. On January 14, 2022, Apache Midstream LLC, a wholly owned subsidiary of Apache, exchanged 12.5 million Common Units in Altus Midstream LP for 12.5 million shares of ALTM Class A Common Stock, in a taxable exchange. On February 22, 2022, as a result of the BCP Business Combination, the Company deconsolidated ALTM. On March 11, 2022, the Company sold four million of its Kinetik Shares. The Company recorded tax expense of $126 million associated with the BCP Business Combination. The tax impact of the BCP Business Combination was fully offset by a change in valuation allowance. Refer to Note 2— Acquisitions and Divestitures for further detail. The Company assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to realize the existing deferred tax assets. The Company showed positive income over the three-year period ended December 31, 2023. During the fourth quarter of 2023, as a result of increases in projections of future taxable income and the absence of objective negative evidence (such as a cumulative loss in recent years), the Company determined there was sufficient positive evidence to release a majority of the U.S. valuation allowance, which resulted in a non-cash deferred income tax benefit of $1.7 billion. The remaining U.S. valuation allowance relates primarily to foreign tax credit and capital loss carryforwards. In 2023, 2022, and 2021, the Company’s valuation allowance decreased by $2.3 billion, $1.0 billion, and $89 million, respectively, as detailed in the table below:
|  | 2023 |  | 2022 |  | 2021
|  | (In millions)
Balance at beginning of year |  | $ | 4,918 |  |  | $ | 5,902 |  |  | $ | 5,991 |
State(1) |  | (63) |  |  | (111) |  |  | 1 |
U.S. |  | (2,235) |  |  | (706) |  |  | (97) |
Foreign |  | 10 |  |  | (167) |  |  | 7 |
Balance at end of year |  | $ | 2,630 |  |  | $ | 4,918 |  |  | $ | 5,902 |
(1)Reported as a component of state income taxes. On December 31, 2023, the Company had net operating losses as follows:
|  | Amount |  | Expiration
|  | (In millions) |  |
U.S. |  | $ | 8,027 |  |  | 2027 - Indefinite
State |  | 6,553 |  |  | Various
Foreign |  | 119 |  |  | 2024 - Indefinite
The Company has a U.S. net operating loss carryforward of $8.0 billion, which includes $107 million of net operating loss subject to annual limitation under Section 382 of the Internal Revenue Code (Code). Net operating losses generated in tax years beginning after 2017 are subject to an 80 percent taxable income limitation with indefinite carryover under the 2017 Tax Cuts and Jobs Act. The Company also has state net operating losses of $6.6 billion, foreign net operating losses of $119 million, and a net interest expense carryover of $580 million under Section 163(j) of the Code with indefinite carryover. In 2023, $1.7 billion of U.S. capital loss carryforward expired unutilized with $34 million remaining, which has a five year carryover period expiring in 2027. The Company has recorded a valuation allowance against some of the U.S. net operating losses, a majority of the state net operating losses, the foreign net operating losses, and the U.S. capital loss because it is more likely than not that these net operating losses and the capital loss carryforward will not be realized. The Company believes it is more likely than not that the deferred tax assets related to the remaining U.S. and state net operating losses, and the net interest expense carryover will be utilized prior to their expiration. On December 31, 2023, the Company had foreign tax credits as follows:
|  | Amount |  | Expiration
|  | (In millions) |  |
Foreign tax credits |  | $ | 2,204 |  |  | 2025-2026
The Company has a $2.2 billion U.S. foreign tax credit carryforward. The Company has recorded a full valuation allowance against the U.S. foreign tax credits listed above because it is more likely than not that these attributes will expire unutilized. The Company accounts for income taxes in accordance with ASC Topic 740, “Income Taxes,” which prescribes a minimum recognition threshold that a tax position must meet before being recognized in the financial statements. Tax positions generally refer to a position taken in a previously filed income tax return or expected to be included in a tax return to be filed in the future that is reflected in the measurement of current and deferred income tax assets and liabilities. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
|  | 2023 |  | 2022 |  | 2021
|  | (In millions)
Balance at beginning of year |  | $ | 89 |  |  | $ | 116 |  |  | $ | 93 |
Additions based on tax positions related to prior year |  | 4 |  |  | — |  |  | 16 |
Additions based on tax positions related to the current year |  | — |  |  | — |  |  | 7 |
Reductions for tax positions of prior years |  | — |  |  | (27) |  |  | — |
Balance at end of year |  | $ | 93 |  |  | $ | 89 |  |  | $ | 116 |
The Company records interest and penalties related to unrecognized tax benefits as a component of income tax expense. Each quarter, the Company assesses the amounts provided for and, as a result, may increase or reduce the amount of interest and penalties. During each of the years ended December 31, 2023, 2022, and 2021, the Company recorded tax expense of $2 million, $1 million, and $1 million, respectively, for interest and penalties. At December 31, 2023, 2022, and 2021, the Company had an accrued liability for interest and penalties of $7 million, $5 million, and $4 million, respectively. In 2023, 2022, and 2021, the Company recorded a $4 million net increase, a $27 million net decrease, and a $23 million net increase, respectively, in its reserve for uncertain tax positions. On September 26, 2022, the Company received a Statutory Notice of Deficiency from the IRS disallowing certain net operating loss carryback and research and development credit refund claims. As a result of the disallowance, on December 14, 2022, the Company filed a petition with the U.S. Tax Court challenging the tax adjustments and requesting a redetermination of the deficiencies stated in the notice. The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax in various states and foreign jurisdictions. The Company’s uncertain tax positions are related to tax years that may be subject to examination by the relevant taxing authority. The Company’s earliest open tax years in its key jurisdictions are as follows: Jurisdiction
U.S. | 2014
Egypt | 2005
U.K. | 2022

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

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/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480990/946-20-50-13 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//740/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-14 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-21 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482526/740-270-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-17 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482603/740-30-50-2 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration