Income taxes (Tables)

12 Months Ended

Dec. 31, 2013

Summary of Income Tax Expense (Benefit)

millions of dollars	2013		2012		2011
Current income tax expense		425		593		955
Deferred income tax expense (a)		484		634		80
Total income tax expense (b)		909		1,227		1,035
Statutory corporate tax rate (percent)		25.4		25.5		25.4
Increase/(decrease) resulting from:
Enacted tax rate change				-		-
Other		(1.1)		(0.9)		(1.9)
Effective income tax rate		24.3		24.6		23.5

(a) There were no material net (charges)/credits for the effect of changes in tax laws and rates included in the provisions for deferred income taxes in 2013, 2012 and 2011.

(b) Cash outflow from income taxes, plus investment credits earned, was $911 million in 2013 (2012 – $871 million, 2011 – $667 million).

Components of Deferred Income Tax Liabilities and Assets

Components of deferred income tax liabilities and assets as at December 31 were:

millions of dollars	2013			2012			2011
Depreciation and amortization		2,949			2,434			1,948
Successful drilling and land acquisitions		815			399			378
Pension and benefits		(376	)		(717	)		(720	)
Site restoration		(287	)		(284	)		(267	)
Capitalized interest		69			53			50
Other		(99	)		39			51
Net long-term deferred income tax liabilities		3,071			1,924			1,440
LIFO inventory valuation		(450	)		(478	)		(560	)
Other		(109	)		(49	)		(30	)
Net current deferred income tax assets		(559	)		(527	)		(590	)
Valuation allowance		-			-			-
Net deferred income tax liabilities		2,512			1,397			850

Unrecognized Tax Benefits

The following table summarizes the movement in unrecognized tax benefits:

millions of dollars	2013			2012			2011
Balance as at January 1		143			134			147
Additions based on current year’s tax position		10			4			-
Additions for prior years’ tax positions		2			10			20
Reductions for prior years’ tax positions		(4	)		(3	)		(31	)
Reductions due to lapse of the statute of limitations		-			(2	)		(2	)
Balance as at December 31		151			143			134