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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Income (loss) before income tax expense (benefit) from U.S. and international operations

Income (loss) before income tax expense (benefit) was as follows (in millions):


	Year Ended December 31,
	2022		2021		2020
U.S. operations	$	11,716	$	1,023	$	(2,072)
Foreign operations	3,591		520		62
Income (loss) before income tax expense (benefit)	$	15,307	$	1,543	$	(2,010)

Reconciliation of income tax expense (benefit) related to continuing operations to income tax expense (benefit) at statutory rate

Statutory income tax rates applicable to the countries in which we operate during each of the years ended December 31, 2022, 2021, and 2020 were as follows:


U.S.	21	%
Canada	15	%
U.K.	19	%
Ireland	13	%
Peru	30	%
Mexico	30	%

The following is a reconciliation of income tax expense (benefit) computed by applying statutory income tax rates to actual income tax expense (benefit) (in millions):


	U.S.				Foreign				Total
	Amount		Percent		Amount		Percent		Amount		Percent
Year ended December 31, 2022
Income tax expense at statutory rates	$	2,460	21.0	%	$	611	17.0	%	$	3,071	20.1	%
U.S. state and Canadian provincial tax expense, net of federal income tax effect	182		1.6	%	255		7.1	%	437		2.8	%
Permanent differences	(61)		(0.5)	%	(16)		(0.5)	%	(77)		(0.5)	%
GILTI tax	413		3.5	%	—		—		413		2.7	%
Foreign tax credits	(396)		(3.4)	%	—		—		(396)		(2.6)	%
Repatriation withholding tax	51		0.4	%	—		—		51		0.3	%


Tax effects of income associated with noncontrolling interests	(78)		(0.7)	%	25		0.7	%	(53)		(0.3)	%
Other, net	(27)		(0.2)	%	9		0.3	%	(18)		(0.1)	%
Income tax expense	$	2,544	21.7	%	$	884	24.6	%	$	3,428	22.4	%

________________________

See notes on page 118.


	U.S.				Foreign				Total
	Amount		Percent		Amount		Percent		Amount		Percent
Year ended December 31, 2021
Income tax expense at statutory rates	$	215	21.0	%	$	73	14.0	%	$	288	18.7	%
U.S. state and Canadian provincial tax expense, net of federal income tax effect	16		1.6	%	53		10.2	%	69		4.5	%
Permanent differences	(34)		(3.3)	%	(14)		(2.7)	%	(48)		(3.1)	%
Changes in tax law (a)	(10)		(1.0)	%	74		14.2	%	64		4.1	%
CARES Act (b)	(56)		(5.5)	%	—		—		(56)		(3.6)	%
GILTI tax	125		12.2	%	—		—		125		8.1	%

Foreign tax credits	(103)		(10.1)	%	—		—		(103)		(6.7)	%
Settlements	(22)		(2.1)	%	—		—		(22)		(1.4)	%
Tax effects of income associated with noncontrolling interests	(74)		(7.2)	%	30		5.8	%	(44)		(2.9)	%
Other, net	(7)		(0.7)	%	(11)		(2.1)	%	(18)		(1.2)	%
Income tax expense	$	50	4.9	%	$	205	39.4	%	$	255	16.5	%

Year ended December 31, 2020
Income tax benefit at statutory rates	$	(435)	21.0	%	$	(10)	(16.1)	%	$	(445)	22.1	%
U.S. state and Canadian provincial tax expense (benefit), net of federal income tax effect	(33)		1.6	%	27		43.5	%	(6)		0.3	%
Permanent differences	(23)		1.1	%	15		24.2	%	(8)		0.4	%
CARES Act (b)	(360)		17.4	%	—		—		(360)		17.9	%

Lapse of federal statute of limitations	(39)		1.8	%	—		—		(39)		1.9	%

Change in tax law	—		—	%	21		33.9	%	21		(1.0)	%
Tax effects of income associated with noncontrolling interests	(66)		3.2	%	(8)		(12.9)	%	(74)		3.7	%
Other, net	7		(0.3)	%	1		1.6	%	8		(0.4)	%
Income tax expense (benefit)	$	(949)	45.8	%	$	46	74.2	%	$	(903)	44.9	%

________________________

(a)During the three months ended June 30, 2021, certain statutory income tax rate changes (primarily an increase in the U.K. rate from 19 percent to 25 percent effective in 2023) were enacted that resulted in the remeasurement of our deferred tax liabilities and related deferred income tax expense.

(b)See “CARES Act” on page 123 for a discussion of significant changes in tax law in the U.S. that were enacted in 2020.

Components of income tax expense (benefit)

Components of income tax expense (benefit) were as follows (in millions):


	U.S.		Foreign		Total
Year ended December 31, 2022
Current:
Country	$	2,147	$	766	$	2,913
U.S. state / Canadian provincial	153		312		465
Total current	2,300		1,078		3,378
Deferred:
Country	164		(138)		26
U.S. state / Canadian provincial	80		(56)		24
Total deferred	244		(194)		50
Income tax expense	$	2,544	$	884	$	3,428

Year ended December 31, 2021
Current:
Country	$	68	$	215	$	283
U.S. state / Canadian provincial	1		97		98
Total current	69		312		381
Deferred:
Country	5		(63)		(58)
U.S. state / Canadian provincial	(24)		(44)		(68)
Total deferred	(19)		(107)		(126)
Income tax expense	$	50	$	205	$	255

Year ended December 31, 2020
Current:
Country	$	(1,033)	$	(34)	$	(1,067)
U.S. state / Canadian provincial	9		(3)		6
Total current	(1,024)		(37)		(1,061)
Deferred:
Country	126		53		179
U.S. state / Canadian provincial	(51)		30		(21)
Total deferred	75		83		158
Income tax expense (benefit)	$	(949)	$	46	$	(903)

Schedule of income taxes paid (refunded), net

Income taxes paid to (received from) U.S. and foreign taxing authorities were as follows (in millions):


	Year Ended December 31,
	2022		2021			2020
U.S.	$	2,396	$	(878)	(a)	$	130
Foreign	892		36			73
Income taxes paid (refunded), net	$	3,288	$	(842)		$	203

________________________

(a)This amount includes a refund of $962 million that we received related to our U.S. federal income tax return for 2020.

Deferred income tax assets and liabilities

The tax effects of significant temporary differences representing deferred income tax assets and liabilities were as follows (in millions):


	December 31,
	2022		2021
Deferred income tax assets:
Tax credit carryforwards	$	660	$	679
NOLs	642		697
Inventories	326		217

Compensation and employee benefit liabilities	44		123
Environmental liabilities	57		53
Other	186		149
Total deferred income tax assets	1,915		1,918
Valuation allowance	(1,234)		(1,262)
Net deferred income tax assets	681		656

Deferred income tax liabilities:
Property, plant, and equipment	4,708		4,866
Deferred turnaround costs	369		308
Inventories	234		191
Investments	431		268
Other	156		233
Total deferred income tax liabilities	5,898		5,866
Net deferred income tax liabilities	$	5,217	$	5,210

Income tax credit and loss carryforwards

We had the following income tax credit and loss carryforwards as of December 31, 2022 (in millions):


	Amount		Expiration
U.S. state income tax credits (gross amount)	$	73	2023 through 2033
U.S. state income tax credits (gross amount)	5		Unlimited
U.S. foreign tax credits	598		2027
U.S. state income tax NOLs (gross amount)	12,002		2023 through 2040
U.S. state income tax NOLs (gross amount)	390		Unlimited

Foreign NOLs (gross amount)	9		Unlimited

Reconciliation of the change in unrecognized tax benefits

The following is a reconciliation of the change in unrecognized tax benefits, excluding related interest and penalties, (in millions):


	Year Ended December 31,
	2022		2021		2020
Balance as of beginning of year	$	816	$	847	$	897
Additions for tax positions related to the current year	27		3		5
Additions for tax positions related to prior years	19		13		9
Reductions for tax positions related to prior years	(573)		(25)		(20)
Reductions for tax positions related to the lapse of applicable statute of limitations	(5)		—		(44)
Settlements	—		(22)		—

Balance as of end of year	$	284	$	816	$	847

Additional information about our liability for unrecognized tax benefits

The following is a reconciliation of unrecognized tax benefits to our liability for unrecognized tax benefits presented in our balance sheets (in millions).


	December 31,
	2022		2021
Unrecognized tax benefits	$	284	$	816
Tax refund claims not yet filed but that we intend to file	—		(28)
Interest and penalties	105		86
Liability for unrecognized tax benefits presented in our balance sheets	$	389	$	874

Our liability for unrecognized tax benefits is reflected in the following balance sheet line items (in millions):


	December 31,
	2022		2021
Deferred charges and other assets, net	$	(26)	$	—
Income taxes payable	169		1
Other long-term liabilities	239		863
Deferred tax liabilities	7		10
Liability for unrecognized tax benefits presented in our balance sheets	$	389	$	874