Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Income Tax Disclosure [Abstract]

Income from continuing operations before income tax expense from U.S. and international operations

Income from continuing operations before income tax expense from U.S. and international operations was as follows (in millions):

	Year Ended December 31,
	2013		2012			2011
U.S. operations	$	3,531	$	4,015		$	3,190
International operations	451		(309		)	132
Income from continuing operations before income tax expense	$	3,982	$	3,706		$	3,322

Reconciliation of income tax expense related to income from continuing operations before income tax expense

The following is a reconciliation of income tax expense computed by applying the U.S. federal statutory income tax rate (35 percent for all years presented) to actual income tax expense related to continuing operations (in millions):

	Year Ended December 31,
	2013			2012			2011
Federal income tax expense at the U.S. federal statutory rate	$	1,394		$	1,297		$	1,163
U.S. state income tax expense, net of U.S. federal income tax effect	62			64			29
U.S. manufacturing deduction	(36		)	(33		)	(28		)
International operations	(71		)	266			46
Permanent differences	(104		)	20			8
Change in tax law	(32		)	—			—
Other, net	41			12			8
Income tax expense	$	1,254		$	1,626		$	1,226

Components of income tax expense related to continuing operations

Components of income tax expense related to continuing operations were as follows (in millions):

	Year Ended December 31,
	2013			2012		2011
Current:
U.S. federal	$	635		$	515	$	562
U.S. state	36			22		13
International	82			126		186
Total current	753			663		761
Deferred:
U.S. federal	459			854		527
U.S. state	59			77		32
International	(17		)	32		(94		)
Total deferred	501			963		465
Income tax expense	$	1,254		$	1,626	$	1,226

Deferred income tax assets and liabilities

The tax effects of significant temporary differences representing deferred income tax assets and liabilities were as follows (in millions):

	December 31,
	2013			2012
Deferred income tax assets:
Tax credit carryforwards	$	48		$	61
Net operating losses (NOLs)	338			247
Inventories	264			258
Property, plant, and equipment	8			78
Compensation and employee benefit liabilities	178			383
Environmental liabilities	92			83
Other	187			157
Total deferred income tax assets	1,115			1,267
Less: Valuation allowance	(347		)	(304		)
Net deferred income tax assets	768			963
Deferred income tax liabilities:
Property, plant, and equipment	6,536			6,143
Deferred turnaround costs	331			300
Inventories	310			381
Investments, primarily in VLP and DGD	94			—
Other	81			103
Total deferred income tax liabilities	7,352			6,927
Net deferred income tax liabilities	$	6,584		$	5,964

Income tax credit and loss carryforwards

We had the following income tax credit and loss carryforwards as of December 31, 2013 (in millions):

	Amount		Expiration
U.S. state income tax credits	$	71	2014 through 2027
U.S. state NOLs (gross amount)	5,609		2014 through 2033
International NOLs	1,289		Unlimited

Subsequently recognized tax benefits related to the valuation allowance for deferred income tax assets

Should we ultimately recognize tax benefits related to the valuation allowance for deferred income tax assets as of December 31, 2013, such amounts will be allocated as follows (in millions):

Income tax benefit	$	340
Additional paid-in capital	7
Total	$	347

Reconciliation of the change in unrecognized tax benefits, excluding related penalties, interest (net of the U.S. federal and state income tax effects) and the U.S. federal income tax effect of state unrecognized tax benefits

The following is a reconciliation of the change in unrecognized tax benefits, excluding related penalties, interest (net of the U.S. federal and state income tax effects) and the U.S. federal income tax effect of state unrecognized tax benefits (in millions):

	Year Ended December 31,
	2013			2012			2011
Balance as of beginning of year	$	341		$	326		$	330
Additions based on tax positions related to the current year	64			11			14
Additions for tax positions related to prior years	576			40			55
Reductions for tax positions related to prior years	(26		)	(36		)	(66		)
Reductions for tax positions related to the lapse of applicable statute of limitations	(4		)	—			(3		)
Settlements	(1		)	—			(4		)
Balance as of end of year	$	950		$	341		$	326

Reconciliation of unrecognized tax benefits to uncertain tax position liabilities

The following is a reconciliation of unrecognized tax benefits reflected in the table above to our uncertain tax position liabilities as of December 31, 2013 and 2012 that are reflected in Note 10 (in millions):

	December 31,
	2013			2012
Unrecognized tax benefits	$	950		$	341
Tax refund claim not recognized in our financial statements	(556		)	—
Penalties, interest (net of U.S. federal and state income tax effect), and the U.S. federal income tax effect of state unrecognized tax benefits	49			50
Uncertain tax position liabilities	$	443		$	391