Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

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

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


	Year Ended December 31,
	2023		2022		2021
U.S. operations	$	9,335	$	11,716	$	1,023
Foreign operations	2,433		3,591		520
Income before income tax expense	$	11,768	$	15,307	$	1,543

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 were as follows:


	Year Ended December 31,
	2023		2022		2021
U.S.	21	%	21	%	21	%
Canada	15	%	15	%	15	%
U.K. (a)	25	%	19	%	19	%
Ireland	13	%	13	%	13	%
Peru	30	%	30	%	30	%
Mexico	30	%	30	%	30	%

________________________

(a)Statutory income tax rate was increased to 25 percent effective April 1, 2023.

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


	U.S.				Foreign				Total
	Amount		Percent		Amount		Percent		Amount		Percent
Year ended December 31, 2023
Income tax expense at statutory rates	$	1,960	21.0	%	$	449	18.5	%	$	2,409	20.5	%
U.S. state and Canadian provincial tax expense, net of federal income tax effect	114		1.2	%	161		6.6	%	275		2.3	%
Permanent differences	(87)		(0.9)	%	(18)		(0.7)	%	(105)		(0.9)	%
GILTI tax	167		1.8	%	—		—		167		1.4	%
Foreign tax credits	(149)		(1.6)	%	—		—		(149)		(1.3)	%
Repatriation withholding tax	45		0.5	%	—		—		45		0.4	%


Tax effects of income associated with noncontrolling interests	(84)		(0.9)	%	30		1.2	%	(54)		(0.4)	%
Other, net	8		—	%	23		0.9	%	31		0.3	%
Income tax expense	$	1,974	21.1	%	$	645	26.5	%	$	2,619	22.3	%

________________________

See notes on page 119.


	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	%

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	%

________________________

(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)Upon filing our superseding 2020 federal income tax return in the fourth quarter of 2021, we recorded an additional tax benefit during the year ended December 31, 2021 related to the additional 2020 tax net operating loss (NOL) carryback to 2015, as permitted by the Coronavirus Aid, Relief and Economic Security (CARES) Act enacted on March 27, 2020.

Components of income tax expense (benefit)

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


	U.S.		Foreign		Total
Year ended December 31, 2023
Current:
Country	$	1,804	$	415	$	2,219
U.S. state / Canadian provincial	157		140		297
Total current	1,961		555		2,516
Deferred:
Country	25		69		94
U.S. state / Canadian provincial	(12)		21		9
Total deferred	13		90		103
Income tax expense	$	1,974	$	645	$	2,619

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

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,
	2023		2022		2021
U.S.	$	2,158	$	2,396	$	(878)	(a)
Foreign	1,336		892		36
Income taxes paid (refunded), net	$	3,494	$	3,288	$	(842)

________________________

(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,
	2023		2022
Deferred income tax assets:
Tax credit carryforwards	$	809	$	660
NOLs	710		642
Inventories	237		326

Compensation and employee benefit liabilities	32		44
Environmental liabilities	59		57
Finance lease obligations	314		309
Operating lease liabilities	519		512
Other	130		186
Total deferred income tax assets	2,810		2,736
Valuation allowance	(1,383)		(1,234)
Net deferred income tax assets	1,427		1,502
Deferred income tax liabilities:
Property, plant, and equipment	5,121		5,022
Deferred turnaround costs	399		369
Operating lease ROU assets	546		507
Inventories	106		234
Investments	423		431
Other	181		156
Total deferred income tax liabilities	6,776		6,719
Net deferred income tax liabilities	$	5,349	$	5,217

Income tax credit and loss carryforwards

We had the following income tax credit and loss carryforwards as of December 31, 2023 (in millions):


	Amount		Expiration
U.S. state income tax credits (gross amount)	$	76	2024 through 2033
U.S. state income tax credits (gross amount)	2		Unlimited
U.S. foreign tax credits	748		2027 through 2033
U.S. state income tax NOLs (gross amount)	12,164		2024 through 2040


Foreign NOLs (gross amount)	329		Unlimited

Reconciliation of the changes in unrecognized tax benefits

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


	Year Ended December 31,
	2023		2022		2021
Balance as of beginning of year	$	284	$	816	$	847
Additions for tax positions related to the current year	18		27		3
Additions for tax positions related to prior years	4		19		13
Reductions for tax positions related to prior years	(73)		(573)		(25)
Reductions for tax positions related to the lapse of applicable statute of limitations	(9)		(5)		—
Settlements	(38)		—		(22)

Balance as of end of year	$	186	$	284	$	816