Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Income Tax Disclosure [Abstract]

Components of the (provision)/benefit for income taxes on continuing operations

The components of the (provision)/benefit for income taxes on continuing operations were:

	Year Ended December 31
Millions of dollars	2013			2012			2011
Current income taxes:
Federal	$	(245	)	$	(695	)	$	(1,026	)
Foreign	(485		)	(328		)	(334		)
State	(49		)	(47		)	(109		)
Total current	(779		)	(1,070		)	(1,469		)
Deferred income taxes:
Federal	4			(168		)	(28		)
Foreign	125			15			57
State	2			(12		)	1
Total deferred	131			(165		)	30
Provision for income taxes	$	(648	)	$	(1,235	)	$	(1,439	)

United States and foreign components of income from continuing operations before income taxes

The United States and foreign components of income from continuing operations before income taxes were as follows:

	Year Ended December 31
Millions of dollars	2013		2012		2011
United States	$	1,070	$	2,826	$	4,040
Foreign	1,694		996		409
Total	$	2,764	$	3,822	$	4,449

Reconciliations between the actual provision for income taxes on continuing operations and that computed by applying the US statutory rate to income from continuing operations before income taxes

Reconciliations between the actual provision for income taxes on continuing operations and that computed by applying the United States statutory rate to income from continuing operations before income taxes were as follows:

	Year Ended December 31
	2013		2012		2011
United States statutory rate	35.0	%	35.0	%	35.0	%
Impact of foreign income taxed at different rates	(9.3	)	(2.5	)	(0.5	)
Domestic manufacturing deduction	(2.0	)	(2.2	)	(2.1	)
State income taxes	1.7		1.6		1.6
Adjustments of prior year taxes	(1.3	)	(0.6	)	(1.5	)
Other impact of foreign operations	(0.2	)	(0.5	)	(0.4	)
Other items, net	(0.4	)	1.5		0.2
Total effective tax rate on continuing operations	23.5	%	32.3	%	32.3	%

Primary components of deferred tax assets and liabilities

The primary components of our deferred tax assets and liabilities were as follows:

	December 31
Millions of dollars	2013			2012
Gross deferred tax assets:
Net operating loss carryforwards	$	481		$	474
Accrued liabilities	600			329
Employee compensation and benefits	351			375
Other	162			160
Total gross deferred tax assets	1,594			1,338
Gross deferred tax liabilities:
Depreciation and amortization	1,185			859
Other	81			137
Total gross deferred tax liabilities	1,266			996
Valuation allowances – net operating loss carryforwards	374			395
Net deferred income tax asset (liability)	$	(46	)	$	(53	)

Rollforward of unrecognized tax benefits and associated interest and penalties

The following table presents a rollforward of our unrecognized tax benefits and associated interest and penalties.

Millions of dollars	Unrecognized Tax Benefits				Interest and Penalties
Balance at January 1, 2011	$	177			$	32
Change in prior year tax positions	38				41
Change in current year tax positions	5				1
Cash settlements with taxing authorities	(12		)		(3		)
Lapse of statute of limitations	(3		)		(2		)
Balance at December 31, 2011	$	205			$	69
Change in prior year tax positions	16				(1		)
Change in current year tax positions	14				1
Cash settlements with taxing authorities	(3		)		—
Lapse of statute of limitations	(4		)		(1		)
Balance at December 31, 2012	$	228		(a)	$	68
Change in prior year tax positions	(53		)		(9		)
Change in current year tax positions	30				1
Cash settlements with taxing authorities	(21		)		(17		)
Lapse of statute of limitations	(9		)		(9		)
Balance at December 31, 2013	$	175		(a)(b)	$	34

(a) Includes $27 million as of December 31, 2013 and $59 million as of December 31, 2012 in foreign unrecognized tax benefits that would give rise to a United States tax credit. The remaining balance of $138 million, which excludes $10 million of unrecognized tax benefits covered by an indemnification asset, as of December 31, 2013 and $169 million as of December 31, 2012, if resolved in our favor, would positively impact the effective tax rate and, therefore, be recognized as additional tax benefits in our statement of operations.

(b) Includes $3 million that could be resolved within the next 12 months.