Income Taxes (Tables)

12 Months Ended

Dec. 31, 2015

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,
	2015		2014		2013
	(In millions)
U.S.	$	(20,415)	$	(3,888)	$	1,191
Foreign		(7,811)		1,079		2,717
Total	$	(28,226)	$	(2,809)	$	3,908

Total Provision for Income Taxes

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

	For the Year Ended December 31,
	2015		2014		2013
	(In millions)
Current taxes:
Federal	$	363	$	(10)	$	(29)
State		41		1		-
Foreign		(95)		1,186		1,648
		309		1,177		1,619
Deferred taxes:
Federal		(4,157)		(130)		509
State		(90)		(43)		44
Foreign		(1,531)		(341)		(244)
		(5,778)		(514)		309
Total	$	(5,469)	$	663	$	1,928

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,
	2015		2014		2013
	(In millions)
Income tax expense (benefit) at U.S. statutory rate	$	(9,879)	$	(983)	$	1,368
State income tax, less federal benefit		(32)		(27)		29
Taxes related to foreign operations		(696)		(154)		236
Tax credits		(6)		-		6
Tax on distributed foreign earnings		726		311		225
Foreign tax credit carryforwards		(2,090)		-		-
Deferred tax on undistributed foreign earnings		1,903		560		-
Goodwill impairment		-		483		-
Change in U.K. tax rate		(619)		-		-
Net change in tax contingencies		20		(3)		(10)
Valuation allowances		5,253		478		132
All other, net		(49)		(2)		(58)
	$	(5,469)	$	663	$	1,928

Net Deferred Tax Liability

The net deferred income tax liability consists of the following:

	December 31,
	2015		2014
	(In millions)
Deferred tax assets:
Deferred income	$	20	$	-
U.S. and state net operating loss carryforwards		329		1,333
Foreign net operating loss carryforwards		1,507		366
Tax credits and other tax incentives		82		42
Foreign tax credit carryforwards		2,090		-
Accrued expenses and liabilities		136		68
Asset retirement obligation		1,037		1,202
Property and equipment		3,880		373
Total deferred tax assets		9,081		3,384
Valuation allowance		(6,530)		(1,069)
Net deferred tax assets		2,551		2,315
Deferred tax liabilities:
Other		1		19
Deferred income		140		24
Investment in foreign subsidiaries		1,903		1,654
Property and equipment		1,574		9,359
Total deferred tax liabilities		3,618		11,056
Net deferred income tax liability	$	1,067	$	8,741

Net Deferred Tax Assets and Liabilities

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

	December 31,
	2015		2014
	(In millions)
Assets:
Deferred tax asset	$	-	$	(769)
Deferred charges and other		(5)		(17)
Liabilities
Other current liabilities		-		28
Deferred income taxes		1,072		9,499
Net deferred income tax liability	$	1,067	$	8,741

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

In 2015, 2014, and 2013, the Company increased its total valuation allowance by $5.5 billion, $418 million, and $232 million, respectively, as detailed in the table below:

	2015		2014		2013
	(In millions)
Balance at beginning of year	$	1,069	$	651	$	419
State(1)		235		57		32
U.S.		2,978		-		-
Foreign(2)		2,248		478		132
Discontinued operations(3)		-		(117)		68
Balance at end of year	$	6,530	$	1,069	$	651

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

⁽²⁾  In 2015, Apache’s subsidiaries completed the sale of its interest in the Kitimat LNG project. As such, the deferred tax assets, liabilities, and valuation allowance related to the project were removed for 2015.

⁽³⁾  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 related to Argentina were removed for 2014.

Net Operating Losses

On December 31, 2015, the Company had net operating losses as follows:

	Amount		Expiration
	(In millions)
Net operating losses:
U.S.	$	198	2018 - 2035
State		3,496	Various
Canada		60	2028 - 2035

Schedule of Foreign Tax Credit Carryforward

The Company has recorded a valuation allowance against the net operating losses listed above and the capital loss until there is sufficient evidence to support the reversal of all or some portion of this allowance.

	Amount		Expiration
	(In millions)
Foreign Tax Credits	$	2,090		2025 - 2026

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:

	2015		2014		2013
	(In millions)
Balance at beginning of year	$	-	$	3	$	3
Additions based on tax positions related to the current year		19		-		-
Reductions for tax positions of prior years		-		(3)		-
Balance at end of year	$	19	$	-	$	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.	2011
Canada	2011
Egypt	1998
U.K.	2013