Income tax provisions (benefits) for continuing operations were:



	Year Ended December 31,
	2019									2018									2017
(In millions)	Current			Deferred			Total			Current			Deferred			Total			Current			Deferred			Total
Federal	$	(116	)	$	(3	)	$	(119	)	$	6		$	—		$	6		$	(32	)	$	41		$	9
State and local	4			3			7			(1		)	(23		)	(24		)	(14		)	2			(12		)
Foreign	58			(34		)	24			274			75			349			483			(104		)	379
Total	$	(54	)	$	(34	)	$	(88	)	$	279		$	52		$	331		$	437		$	(61	)	$	376



	Year Ended December 31,
(In millions)	2019			2018			2017
Total pre-tax income (loss) from continuing operations	$	392		$	1,427		$	(454	)
Total income tax expense (benefit)	$	(88	)	$	331		$	376
Effective income tax rate (benefit) on continuing operations	(22		)%	23		%	83		%

Income taxes at the statutory tax rate^(a)(b)	$	83		$	300		$	(159	)
Effects of foreign operations	(29		)	214			140
Adjustments to valuation allowances	(28		)	(177		)	446
State income taxes	11			(17		)	(19		)
Tax law change	—			—			(35		)
Other federal tax effects	(125		)	11			3
Income tax expense (benefit) on continuing operations	$	(88	)	$	331		$	376

The effective income tax rate is influenced by a variety of factors including the geographic and functional sources of income and the relative magnitude of these sources of income. The difference between the total provision and the sum of the amounts allocated to segments is reported in the “Not Allocated to Segments” column of the tables in Note 7.

Effects of foreign operations – The effects of foreign operations decreased our tax expense in 2019 due to tax benefits related to our U.K. operations and pre-tax income in jurisdictions with effective tax rates lower than the U.S. The effects of foreign operations increased our tax expense in 2018 and 2017 due to the mix of pre-tax income between high and low tax jurisdictions, including Libya where the tax rate was 93.5%. Excluding Libya, the effective tax rates on continuing operations would be an expense of 14% in 2018 and 5% in 2017. As a result of the sale of our Libya subsidiary in the first quarter of 2018, we do not expect to incur further tax expense related to Libya.

Change in tax law – On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the “Tax Reform Legislation”). Tax Reform Legislation, which is also commonly referred to as “U.S. tax reform”, significantly changing U.S. corporate income tax laws by, among other things, reducing the U.S. corporate income tax rate to 21% starting in 2018, and repeal of the corporate alternative minimum tax (“AMT”), and a one-time deemed repatriation of accumulated foreign earnings. In the fourth quarter of 2017, we remeasured our deferred taxes at 21%, in accordance with U.S. GAAP. The impact of the remeasurement on our federal deferred tax assets and liabilities was equally offset by an adjustment to our valuation allowance with no material impact to current year earnings. In accordance with Staff Accounting Bulletin No. 118 (“SAB 118”) we finalized our tax position in the fourth quarter of 2018 with no material changes made to positions considered provisional as of December 31, 2017.

Other federal tax effects – The decrease in other federal tax effects is primarily related to the settlement of the 2010-2011 U.S. Federal Tax Audit (“IRS Audit”) in the first quarter of 2019. The release of the accrued tax positions resulted in a $126 million tax benefit, primarily related to AMT credits, see Note 25 for further detail.



	Year Ended December 31,
(In millions)	2019			2018
Deferred tax assets:
Employee benefits	$	90		$	75
Operating loss carryforwards	1,685			1,304
Capital loss carryforwards	1			2
Foreign tax credits	611			611
Other	27			4
Subtotal	2,414			1,996
Valuation allowance	(699		)	(721		)
Total deferred tax assets	1,715			1,275
Deferred tax liabilities:
Property, plant and equipment	1,861			1,018
Accrued revenue	40			60
Other	—			3
Total deferred tax liabilities	1,901			1,081
Net deferred tax liabilities	$	186		$	—
Net deferred tax assets	$	—		$	194

Operating loss carryforwards – At December 31, 2019, our operating loss carryforwards, relating to tax years beginning prior to January 1, 2018, before valuation allowance, include $655 million from the U.S. that expire in 2035 - 2037. Our operating loss carryforwards in the U.S. for tax years beginning after December 31, 2017, before our valuation allowance, include $829 million which can be carried forward indefinitely. Foreign operating loss carryforwards include $20 million that begin to expire in 2020. State operating loss carryforwards of $181 million expire in 2020 through 2038.

Valuation allowances – At December 31, 2019, we reflect a valuation allowance in our consolidated balance sheet of $699 million against our net deferred tax assets in various jurisdictions in which we operate. The decrease in valuation allowance primarily relates to current year activity.

Property, plant and equipment – At December 31, 2019, we reflected a deferred tax liability of $1.9 billion. The increase primarily relates to the sale of our U.K. business and corresponding reduction in the asset retirement obligations and current year activity in the U.S.



	December 31,
(In millions)	2019		2018
Assets:
Other noncurrent assets	$	—	$	393
Liabilities:
Noncurrent deferred tax liabilities	186		199
Net deferred tax liabilities	$	186	$	—
Net deferred tax assets	$	—	$	194

We are routinely undergoing examinations in the jurisdictions in which we operate. As of December 31, 2019, our income tax returns remain subject to examination in the following major tax jurisdictions for the tax years indicated:



(In millions)	2019			2018			2017
Beginning balance	$	263		$	126		$	66
Additions for tax positions of prior years	13			152			83
Reductions for tax positions of prior years	(152		)	(15		)	(3		)
Settlements	(111		)	—			(20		)
Ending balance	$	13		$	263		$	126

If the unrecognized tax benefits as of December 31, 2019 were recognized, $13 million would affect our effective income tax rate. As of December 31, 2019, there are $5 million uncertain tax positions for which it is reasonably possible that the amount could significantly change during the next twelve months. During the first quarter of 2019, we withdrew our appeal related to the Brae area decommissioning costs in the U.K., thus the uncertain tax positions previously established are now considered effectively settled with no tax expense or benefit impact. Also, in the first quarter of 2019, we settled the 2010-2011 IRS Audit, resulting in a tax benefit of $126 million. See Note 25 for further detail.

Pursuant to the Tax Sharing Agreement we entered into with Marathon Petroleum Corporation (“MPC”) in connection with the 2011 spin-off transaction, MPC agreed to indemnify us for certain liabilities. In addition to the benefit from the settlement of the IRS Audit in the first quarter of 2019, we recorded a current receivable and other income of $42 million for indemnity payments due from MPC for tax expense and interest we had previously recognized. The indemnity relates to tax and interest allocable to MPC as a result of the IRS Audit. During the second quarter of 2019, we paid the IRS and were subsequently reimbursed by MPC for settlement of their indemnity obligation.

Interest and penalties are recorded as part of the tax provision and were $6 million, $2 million and $27 million related to unrecognized tax benefits in 2019, 2018 and 2017. As of December 31, 2019 and 2018, $3 million and $27 million of interest and penalties were accrued related to income taxes.