Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

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

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

	Year Ended December 31
Millions of dollars	2018			2017			2016
Current income taxes:
Federal	$	19		$	40		$	737
Foreign	(428		)	(423		)	(415		)
State	(15		)	(14		)	35
Total current	(424		)	(397		)	357
Deferred income taxes:
Federal	286			(678		)	1,343
Foreign	9			(31		)	77
State	(28		)	(25		)	81
Total deferred	267			(734		)	1,501
Income tax benefit (provision)	$	(157	)	$	(1,131	)	$	1,858

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

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

	Year Ended December 31
Millions of dollars	2018		2017			2016
United States	$	1,097	$	694		$	(6,636	)
Foreign	717		(12		)	(989		)
Total	$	1,814	$	682		$	(7,625	)

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 (loss) from continuing operations before income taxes were as follows:

	Year Ended December 31
	2018		2017		2016
United States statutory rate	21.0	%	35.0	%	35.0	%
Valuation allowance against tax assets	(16.2	)	(6.2	)	(2.1	)
Venezuela adjustment	5.7		36.6		—
Impact of foreign income taxed at different rates	(3.0	)	(18.3	)	(3.2	)
Impact of U.S. tax reform	(2.6	)	113.0		—
Adjustments of prior year taxes	2.0		(2.3	)	0.2
State income taxes	1.9		1.7		1.0
Undistributed foreign earnings	—		3.8		(5.1	)
Domestic manufacturing deduction	—		—		(1.3	)
Non-deductible acquisition costs	—		—		0.6
Other items, net	(0.1	)	2.5		(0.7	)
Total effective tax rate on continuing operations	8.7	%	165.8	%	24.4	%

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	2018		2017
Gross deferred tax assets:
Net operating loss carryforwards	$	1,466	$	1,370
Foreign tax credit carryforwards	728		828
Employee compensation and benefits	242		263
Accrued liabilities	101		97
Other	404		416
Total gross deferred tax assets	2,941		2,974
Gross deferred tax liabilities:
Depreciation and amortization	635		315
Undistributed foreign earnings	2		242
Other	64		56
Total gross deferred tax liabilities	701		613
Valuation allowances	913		1,173
Net deferred income tax asset	$	1,327	$	1,188

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, 2016	$	322			$	47
Change in prior year tax positions	44				20
Change in current year tax positions	129				3
Cash settlements with taxing authorities	(62		)		(8		)
Lapse of statute of limitations	(6		)		(1		)
Balance at December 31, 2016	$	427			$	61
Change in prior year tax positions	(108		)		—
Change in current year tax positions	24				2
Cash settlements with taxing authorities	(6		)		—
Lapse of statute of limitations	(4		)		(3		)
Balance at December 31, 2017	$	333		(a)	$	60
Change in prior year tax positions	32				11
Change in current year tax positions	63				—
Cash settlements with taxing authorities	(7		)		(2		)
Lapse of statute of limitations	(4		)		(2		)
Balance at December 31, 2018	$	417		(a)(b)	$	67

(a) Includes $18 million as of December 31, 2018 and $9 million as of December 31, 2017 in foreign unrecognized tax benefits that would give rise to a United States tax credit. As of December 31, 2018 and December 31, 2017, approximately $399 million and $319 million, respectively, of unrecognized tax benefits would positively impact the effective tax rate and be recognized as additional tax benefits in our statement of operations if resolved in our favor.

(b)

Includes $21 million that could be resolved within the next 12 months.