Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

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

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

	Year Ended December 31
Millions of dollars	2019			2018			2017
Current income taxes:
Federal	$	32		$	19		$	40
Foreign	(426		)	(428		)	(423		)
State	(9		)	(15		)	(14		)
Total current	(403		)	(424		)	(397		)
Deferred income taxes:
Federal	383			286			(678		)
Foreign	(36		)	9			(31		)
State	49			(28		)	(25		)
Total deferred	396			267			(734		)
Income tax provision	$	(7	)	$	(157	)	$	(1,131	)

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	2019			2018		2017
United States	$	(1,517	)	$	1,097	$	694
Foreign	395			717		(12		)
Total	$	(1,122	)	$	1,814	$	682

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
	2019		2018		2017
United States statutory rate	21.0	%	21.0	%	35.0	%
Impact of impairments and other charges	(20.9	)	—		—
Adjustments of prior year taxes	13.0		2.0		(2.3	)
Valuation allowance against tax assets	(10.7	)	(16.2	)	(6.2	)
State income taxes	(1.3	)	1.9		1.7
Impact of foreign income taxed at different rates	0.8		(3.0	)	(18.3	)
Venezuela adjustment	—		5.7		36.6
Impact of U.S. tax reform	—		(2.6	)	113.0
Undistributed foreign earnings	—		—		3.8
Other items, net	(2.5	)	(0.1	)	2.5
Total effective tax rate on continuing operations	(0.6	)%	8.7	%	165.8	%

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	2019		2018
Gross deferred tax assets:
Net operating loss carryforwards	$	1,301	$	1,466
Foreign tax credit carryforwards	877		728
Research and development tax credit carryforwards	198		139
Employee compensation and benefits	215		242
Accrued liabilities	316		101
Other	382		265
Total gross deferred tax assets	3,289		2,941
Gross deferred tax liabilities:
Depreciation and amortization	373		635
Operating lease right-of-use assets	109		—
Undistributed foreign earnings	2		2
Other	56		64
Total gross deferred tax liabilities	540		701
Valuation allowances	1,082		913
Net deferred income tax asset	$	1,667	$	1,327

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, 2017	$	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			$	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)	$	67
Change in prior year tax positions	25				11
Change in current year tax positions	29				—
Cash settlements with taxing authorities	(4		)		—
Lapse of statute of limitations	(42		)		(8		)
Balance at December 31, 2019	$	425		(a)(b)	$	70

(a) Includes $25 million as of December 31, 2019 and $18 million as of December 31, 2018 in foreign unrecognized tax benefits that would give rise to a United States tax credit. As of December 31, 2019 and December 31, 2018, a net $271 million and $399 million without a net operating loss carryforward offset, 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 $30 million that could be resolved within the next 12 months.