Income Taxes (Tables)

12 Months Ended

Dec. 31, 2015

Components of Income Tax Provision (Benefit) for Continuing Operations

The provision (benefit) for income taxes from continuing operations consisted of:

	2015			2014			2013
	(In millions)
United States
Federal
Current	$	(7	)	$	(1	)	$	8
Deferred		(995	)		156			103
State		(61	)		57			9
		(1,063	)		212			120
Foreign
Current		4			453			941
Deferred		(231	)		79			186
		(227	)		532			1,127
Total		(1,290	)		744			1,247
Adjustment of deferred taxes for foreign income tax law changes (a)		(9	)		—			(682	)
Total provision (benefit) for income taxes	$	(1,299	)	$	744		$	565

(a)

The reported amount for 2015 reflects $9 million for the effect of a change in Norway’s hydrocarbon and base corporate income tax rates in December 2015. The reported amount for 2013 reflects $674 million for the effect of the Denmark hydrocarbon income tax law change to the Chapter 3A regime in December 2013 and $8 million for the effect of a change in Norway’s hydrocarbon and base corporate income tax rates in December 2013.

Income (Loss) From Continuing Operations Before Income Taxes

Income (loss) from continuing operations before income taxes consisted of the following:

	2015			2014		2013
	(In millions)
United States (a)	$	(2,728	)	$	676	$	580
Foreign		(1,530	)		1,760		4,021
Total income (loss) from continuing operations before income taxes	$	(4,258	)	$	2,436	$	4,601

(a)	Includes substantially all of our interest expense, corporate expense and the results of commodity hedging activities.

Components of Deferred Tax Liabilities and Deferred Tax Assets, and Presentation in Consolidated Balance Sheet

The components of deferred tax liabilities and deferred tax assets at December 31 were as follows:

	2015			2014
	(In millions)
Deferred tax liabilities
Property, plant and equipment and investments (a)	$	(3,743	)	$	(4,226	)
Other		(257	)		(269	)
Total deferred tax liabilities		(4,000	)		(4,495	)
Deferred tax assets
Net operating loss carryforwards		3,852			3,010
Tax credit carryforwards		188			193
Property, plant and equipment and investments (a)		981			1,110
Accrued compensation, deferred credits and other liabilities		492			449
Asset retirement obligations		1,220			1,421
Other		165			261
Total deferred tax assets		6,898			6,444
Valuation allowances		(1,579	)		(1,416	)
Total deferred tax assets, net of valuation allowances		5,319			5,028
Net deferred tax assets	$	1,319		$	533

(a)	2014 has been adjusted to conform to the 2015 presentation.

In the Consolidated Balance Sheet, deferred tax assets and liabilities are netted by taxing jurisdiction and are recorded at December 31 as follows:

	2015			2014
	(In millions)
Deferred income taxes (long-term asset)	$	2,653		$	2,371
Deferred income taxes (long-term liability)		(1,334	)		(1,838	)
Net deferred tax assets	$	1,319		$	533

Effective Income Tax Rate Reconciliation for Continuing Operations

The difference between our effective income tax rate from continuing operations and the U.S. statutory rate is reconciled below:

	2015				2014				2013
U.S. statutory rate		35.0		%		35.0		%		35.0		%
Effect of foreign operations (a)(b)		5.9				0.7				5.9
State income taxes, net of Federal income tax		0.9				1.5				0.1
Change in enacted tax laws		0.2				—				(14.8	)
Gains on asset sales, net		(0.2	)			(8.3	)			(15.6	)
Goodwill impairment		(12.2	)			—				—
Valuation allowance against previously benefitted deferred tax assets (a)		(3.1	)			0.6				1.0
Benefit of legal entity restructuring		3.5				—				—
Other (a)		0.5				1.0				0.7
Total		30.5		%		30.5		%		12.3		%

(a)	2014 and 2013 have been adjusted to conform to the 2015 presentation.

(b)	The variance in effective income tax rates attributable to the effect of foreign operations primarily resulted from the mix of income among high and low tax rate jurisdictions.

Reconciliation of Beginning and Ending Amounts of Unrecognized Tax Benefits

Below is a reconciliation of the gross beginning and ending amounts of unrecognized tax benefits:

	2015	2014
	(In millions)
Balance at January 1	$ 603	$ 570
Additions based on tax positions taken in the current year	19	42
Additions based on tax positions of prior years	29	70
Reductions based on tax positions of prior years	(31)	(76)
Reductions due to settlements with taxing authorities	(12)	(3)
Reductions due to lapses in statutes of limitation	(4)	—
Balance at December 31	$ 604	$ 603