Income Taxes

9 Months Ended

Sep. 30, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income TaxesEnactment of the Inflation Reduction Act of 2022. On August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022 ("the IRA"). The IRA, among other tax provisions, imposes a 15 percent corporate alternative minimum tax based on financial statement income, effective for tax years beginning after December 31, 2022. The IRA also establishes a one percent excise tax on stock repurchases made by publicly traded U.S. corporations, effective for stock repurchases after December 31, 2022. The IRA did not impact the Company's current year tax provision or the Company's consolidated financial statements. The Company is evaluating the accounting and disclosure implications of the IRA on its future filings.

Income tax provision and effective tax rate are as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
	(in millions)
Current tax provision	$	(308)		$	(11)		$	(471)		$	(29)
Deferred tax provision	(202)			(280)			(1,248)			(371)
Income tax provision	$	(510)		$	(291)		$	(1,719)		$	(400)
Effective tax rate	20		%	22		%	21		%	23		%

The Company evaluates and updates its annual effective income tax rate on an interim basis based on current and forecasted earnings and tax laws. The mix and timing of the Company's actual earnings compared to annual projections can cause interim effective tax rate fluctuations. The Company's interim effective tax rate could differ from the U.S. statutory rate of 21 percent primarily due to forecasted state income taxes. The Company settled its state unrecognized tax benefits ("UTBs") during the three and nine months ended September 30, 2022 resulting in lower forecasted 2022 state income taxes.

The Company files income tax returns in the U.S. federal and various state and foreign jurisdictions. The Internal Revenue Service has closed examinations of the 2020 and prior tax years and, with few exceptions, the Company believes that it is no longer subject to examinations by state and foreign tax authorities for years before 2013. As of September 30, 2022, no adjustments had been proposed in any jurisdiction that would have a significant effect on the Company's liquidity, future results of operations or financial position.

Uncertain tax positions. The Company had state UTBs for tax years 2013 and 2015 through 2018 resulting from research and experimental expenditures related to horizontal drilling and completion innovations. In July 2022, the Company and the state taxing authorities effectively settled the uncertain tax position for all years. As of September 30, 2022, the Company no longer has any UTBs.