Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

Income Tax Disclosure [Abstract]

Income (Loss) Before Income Taxes

Income (loss) from continuing operations before income taxes is composed of the following:

	For the Year Ended December 31,
	2014			2013		2012
	(In millions)
U.S.	$	(4,020	)	$	1,191	$	1,605
Foreign		1,114			3,213		3,235
Total	$	(2,906	)	$	4,404	$	4,840

Total Provision for Income Taxes

The total provision for income taxes from continuing operations consists of the following:

	For the Year Ended December 31,
	2014			2013			2012
	(In millions)
Current taxes:
Federal	$	(10	)	$	(29	)	$	(150	)
State		1			—			—
Foreign		1,151			1,692			2,349
		1,142			1,663			2,199
Deferred taxes:
Federal		961			509			596
State		(43	)		44			10
Foreign		(423	)		(292	)		48
		495			261			654
Total	$	1,637		$	1,924		$	2,853

Reconciliation of Tax of Income Before Income Taxes and Total Tax Expense

A reconciliation of the tax on the Company’s income from continuing operations before income taxes and total tax expense is shown below:

	For the Year Ended December 31,
	2014			2013			2012
	(In millions)
Income tax expense (benefit) at U.S. statutory rate	$	(1,017	)	$	1,541		$	1,694
State income tax, less federal benefit		(27	)		29			6
Taxes related to foreign operations		(144	)		200			767
Tax credits		—			6			(4	)
Deferred tax on distributed foreign earnings		311			225			—
Deferred tax on undistributed foreign earnings		1,654			—			—
Current and deferred taxes related to currency fluctuations		(56	)		(154	)		16
Goodwill impairment		483			—			—
Change in U.K. tax rate		—			—			118
Net change in tax contingencies		(3	)		(10	)		(115	)
Valuation allowances		478			132			341
All other, net		(42	)		(45	)		30
	$	1,637		$	1,924		$	2,853

Net Deferred Tax Liability

The net deferred income tax liability consists of the following:

	December 31,
	2014			2013
	(In millions)
Deferred tax assets:
Deferred income	$	—		$	153
U.S. and state net operating loss carryforwards		1,333			900
Foreign net operating loss carryforwards		366			156
Tax credits		42			66
Accrued expenses and liabilities		68			162
Asset retirement obligation		1,202			1,231
Total deferred tax assets		3,011			2,668
Valuation allowance		(1,069	)		(651	)
Net deferred tax assets		1,942			2,017
Deferred tax liabilities:
Other		19			29
Deferred income		24			—
Investment in foreign subsidiaries		1,654			—
Property and equipment		8,986			10,224
Total deferred tax liabilities		10,683			10,253
Net deferred income tax liability	$	8,741		$	8,236

Net Deferred Tax Assets and Liabilities

Net deferred tax assets and liabilities are included in the consolidated balance sheet as follows:

	December 31,
	2014			2013
	(In millions)
Assets:
Deferred tax asset	$	(769	)	$	(134	)
Deferred charges and other		(17	)		(33	)
Liabilities
Other current liabilities		28			39
Deferred income taxes		9,499			8,364
Net deferred income tax liability	$	8,741		$	8,236

Summary of Valuation Allowance Against Certain Foreign Net Deferred Tax Assets and State Net Operating Losses

In 2014, 2013, and 2012, the Company increased its valuation allowance by $418 million, $232 million, and $359 million, as detailed in the table below:

	2014			2013		2012
	(In millions)
Balance at beginning of year	$	651		$	419	$	60
State(1)		57			32		7
Foreign		478			132		341
Discontinued operations(2)		(117	)		68		11
Balance at end of year	$	1,069		$	651	$	419

(1) Reported as a component of state income taxes in the tax reconciliation.

(2) In 2014, Apache’s subsidiaries completed the sale of all of the Company’s operations in Argentina. As such, the deferred tax assets, liabilities, and valuation allowance for Argentina were removed for 2014.

Net Operating Losses

On December 31, 2014, the Company had net operating losses as follows:

	December 31, 2014
	Amount		Expiration
	(In millions)
Net operating losses:
U.S. — Federal	$	2,701	2032 - 2035
U.S. — Federal (Mariner IRC §382 limited)		464	2018 - 2030
U.S. — Federal (Cordillera IRC §382 limited)		183	2027 - 2032
U.S. — State		3,273	Various
Canada		5	2015
Australia		124	Indefinite

Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	2014			2013		2012
	(In millions)
Balance at beginning of year	$	3		$	3	$	97
Additions based on tax positions related to the current year		—			—		4
Reductions for tax positions of prior years		(3	)		—		(33	)
Settlements with taxing authorities		—			—		(65	)
Balance at end of year	$	—		$	3	$	3

Key Jurisdictions of Company's Earliest Open Tax Years

Apache’s earliest open tax years in its key jurisdictions are as follows:

Jurisdiction
U.S.(1)	2011
Canada	2010
Egypt	1998
Australia	2007
U.K.	2010

(1) Mariner’s tax returns for 1998 through 2010 remain open for purposes of determining its net operating loss. Cordillera’s tax returns for 2005 through 2012 remain open for purposes of determining its net operating loss.