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Income Taxes | 12 Months Ended
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Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | Note I – Income Taxes The components of income (loss) from continuing operations before income taxes for each of the three years presented and income tax expense (benefit) attributable thereto were as follows.
(Thousands of dollars) | 2022 |  | 2021 |  | 2020
Income (loss) from continuing operations before income taxes |  |  |  |  |
United States | $ | 1,306,200 |  |  | $ | 114,659 |  |  | $ | (1,407,598) |
Foreign | 144,061 |  |  | (71,768) |  |  | (141,437) |
Total | $ | 1,450,261 |  |  | $ | 42,891 |  |  | $ | (1,549,035) |
Income tax expense (benefit) |  |  |  |  |
U.S. Federal – Current | $ | — |  |  | $ | — |  |  | $ | (10,627) |
– Deferred | 234,749 |  |  | (1,480) |  |  | (249,253) |
Total U.S. Federal | 234,749 |  |  | (1,480) |  |  | (259,880) |
State | 9,010 |  |  | 3,303 |  |  | (8,413) |
Foreign – Current | 18,134 |  |  | (5,158) |  |  | (5,072) |
– Deferred | 47,571 |  |  | (2,527) |  |  | (20,376) |
Total Foreign | 65,705 |  |  | (7,685) |  |  | (25,448) |
Total | $ | 309,464 |  |  | $ | (5,862) |  |  | $ | (293,741) |
The following table reconciles income taxes based on the U.S. statutory tax rate to the Company’s income tax expense.
(Thousands of dollars) | 2022 |  | 2021 |  | 2020
Income tax expense (benefit) based on the U.S. statutory tax rate | $ | 304,555 |  |  | $ | 9,007 |  |  | $ | (325,299) |
Foreign income (loss) subject to foreign tax rates different than the U.S. statutory rate | 10,823 |  |  | 13,270 |  |  | (3,791) |
State income taxes, net of federal benefit | 7,118 |  |  | 2,500 |  |  | (6,646) |
U.S. tax benefit on certain foreign upstream investments | — |  |  | (8,916) |  |  | — |
Change in deferred tax asset valuation allowance related to other foreign exploration expenditures | 24,748 |  |  | 4,814 |  |  | 7,707 |
Tax effect on income attributable to noncontrolling interest | (36,471) |  |  | (25,450) |  |  | 23,712 |
Other, net | (1,309) |  |  | (1,087) |  |  | 10,576 |
Total | $ | 309,464 |  |  | $ | (5,862) |  |  | $ | (293,741) |
An analysis of the Company’s deferred tax assets and deferred tax liabilities at December 31, 2022 and 2021 showing the tax effects of significant temporary differences follows.
(Thousands of dollars) | 2022 |  | 2021
Deferred tax assets |  |  |
Property and leasehold costs | $ | 242,467 |  |  | $ | 241,833 |
Liabilities for dismantlements | 31,017 |  |  | 37,728 |
Postretirement and other employee benefits | 86,798 |  |  | 114,790 |
U. S. net operating loss | 442,699 |  |  | 577,531 |
Investment in partnership | 11,595 |  |  | 39,396 |
Other deferred tax assets | 111,212 |  |  | 135,838 |
Total gross deferred tax assets | 925,788 |  |  | 1,147,116 |
Less valuation allowance | (136,008) |  |  | (111,259) |
Net deferred tax assets | 789,780 |  |  | 1,035,857 |
Deferred tax liabilities |  |  |
Deferred tax on undistributed foreign earnings | (5,000) |  |  | (5,000) |
Accumulated depreciation, depletion and amortization | (796,510) |  |  | (786,846) |
Other deferred tax liabilities | (85,284) |  |  | (41,387) |
Total gross deferred tax liabilities | (886,794) |  |  | (833,233) |
Net deferred tax (liabilities) assets | $ | (97,014) |  |  | $ | 202,624 |
In management’s judgment, the net deferred tax assets in the preceding table are more likely than not to be realized based on the consideration of deferred tax liability reversals and future taxable income. The valuation allowance for deferred tax assets relates primarily to tax assets arising in foreign tax jurisdictions that in the judgment of management at the present time are more likely than not to be unrealized. The valuation allowance increased $24.7 million in 2022, related all to non-U.S. items. Subsequent reductions of the valuation allowance are expected to be reported as reductions of tax expense assuming no offsetting change in the deferred tax asset. The Company has an U.S. net operating loss of $2.1 billion at year-end 2022 with a corresponding deferred tax asset of $442.7 million. The Company believes the U.S. net operating loss being carried forward will more likely than not be utilized in future periods prior to expirations in 2036 and 2037. Other Information Currently the Company considers $100 million of Canada’s past foreign earnings not permanently reinvested, with an accompanying $5 million liability. At December 31, 2021, $1.4 billion of past foreign earnings are considered permanently reinvested. The Company closely and routinely monitors these reinvestment positions considering underlying facts and circumstances pertinent to our business and the future operation of the Company. Uncertain Income Tax Positions The financial statement recognition of the benefit for a tax position is dependent upon the benefit being more likely than not to be sustainable upon ultimate settlement. If this threshold is met, the tax benefit is then measured and recognized at the largest amount that is greater than 50% likely of being realized upon ultimate settlement. Liabilities associated with uncertain income tax positions are included in “Deferred credits and other liabilities” in the Consolidated Balance Sheets. A reconciliation of the beginning and ending amount of the consolidated liability for unrecognized income tax benefits during the three years presented is shown in the following table.
(Thousands of dollars) | 2022 |  | 2021 |  | 2020
Balance at January 1 | $ | 2,903 |  |  | $ | 2,832 |  |  | $ | 2,538 |
Additions for tax positions related to current year | 77 |  |  | 71 |  |  | 3,042 |
Additions for tax positions related to prior year | 948 |  |  | — |  |  | — |
Settlements with taxing authorities | — |  |  | — |  |  | (2,748) |
Balance at December 31 | $ | 3,928 |  |  | $ | 2,903 |  |  | $ | 2,832 |
All additions or settlements to the above liability affect the Company’s effective income tax rate in the respective period of change. The Company accounts for any applicable interest and penalties on uncertain tax positions as a component of income tax expense. The Company also had other recorded liabilities of $0.3 million as of December 31, 2022, 2021 and 2020, respectively, for interest and penalties associated with uncertain tax positions. Income tax expense for the years ended December 31, 2022, 2021 and 2020 included net benefits for interest and penalties of nil, nil and $0.1 million, respectively, associated with uncertain tax positions. In 2023, the Company currently expects to add between $0.1 million and $1.0 million to the provision for uncertain tax positions. Although existing liabilities could be reduced by settlement with taxing authorities or lapse due to statute of limitations, the Company believes that the changes in its unrecognized tax benefits due to these events will not have a material impact on the Consolidated Statement of Operations during 2023. The Company’s tax returns in multiple jurisdictions are subject to audit by taxing authorities. These audits often take years to complete and settle. Although the Company believes that recorded liabilities for unsettled issues are adequate, additional gains or losses could occur in future years from resolution of outstanding unsettled matters. Additionally, the Company could be required to pay amounts into an escrow account as any matters are identified and appealed with the relevant taxing authorities. As of December 31, 2022, the earliest years remaining open for audit and/or settlement in the Company’s major taxing jurisdictions are as follows: United States – 2016; Canada – 2016; and Malaysia – 2016. The Company has retained certain possible liabilities and rights to income tax receivables relating to Malaysia for the years prior to 2019. The Company believes current recorded liabilities are adequate. Coronavirus Aid, Relief, and Economic Security Act In the fourth quarter of 2020, under the provisions of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, the Company received a refund of its remaining outstanding AMT credit balance of approximately $18.5 million.

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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 https://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 https://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 https://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 https://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 https://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 https://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 https://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 https://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 https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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