Income Taxes

6 Months Ended

Jun. 30, 2020

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

During the three months ended June 30, 2020, we recorded a total income tax benefit of $402 million on a pre-tax loss of $2.1 billion, resulting in an effective tax rate of 19.3%. Our effective tax rate during the three months ended June 30, 2020 was impacted by the geographic mix of our earnings.

During the six months ended June 30, 2020, we recorded a total income tax benefit of $283 million on a pre-tax loss of $3.0 billion, resulting in an effective tax rate of 9.5%. The effective tax rate for this period was primarily impacted by our first quarter results, which included the impacts of the COVID-19 pandemic and OPEC+ disagreements which created an unprecedented disruption in the oil and gas industry. After evaluating the negative impact that these events are expected to have on our business outlook, we determined that it was more likely than not that certain foreign tax credits would not be realized. Accordingly, we recognized a valuation allowance on our deferred tax assets in the amount of $310 million during the first quarter. Additionally, we recorded $3.2 billion of impairments and other charges and a $168 million loss on extinguishment of debt during the six months ended June 30, 2020, resulting in a $686 million tax benefit recognized during the period. Our effective tax rate during the six months ended June 30, 2020 was also impacted by the geographic mix of our earnings.

See Note 2 for further information on these adverse market conditions and impairments and other charges recognized during the three and six months ended June 30, 2020.