INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Income (Loss) Before Income Taxes

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

	For the Year Ended December 31,
	2019			2018			2017
	(In millions)
U.S.	$	(4,397	)	$	(723	)	$	(3,620	)
Foreign	1,389			1,681			4,538
Total	$	(3,008	)	$	958		$	918

Total Provision for Income Taxes

The total income tax provision (benefit) consists of the following:

	For the Year Ended December 31,
	2019			2018			2017
	(In millions)
Current income taxes:
Federal	$	1		$	(1	)	$	(38	)
State	—			—			(8		)
Foreign	659			895			641
	660			894			595
Deferred income taxes:
Federal	67			(65		)	(1,010		)
State	—			2			—
Foreign	(53		)	(159		)	(170		)
	14			(222		)	(1,180		)
Total	$	674		$	672		$	(585	)

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

A reconciliation of the tax on the Company’s income (loss) before income taxes and total tax expense is shown below:

	For the Year Ended December 31,
	2019			2018			2017
	(In millions)
Income tax expense (benefit) at U.S. statutory rate	$	(631	)	$	201		$	321
State income tax, less federal effect(1)	1			2			(6		)
Taxes related to foreign operations	328			436			(105		)
Tax credits	(6		)	(13		)	(33		)
Tax on deemed repatriation of foreign earnings	—			103			419
Foreign tax credits	—			(336		)	(201		)
Deferred tax on undistributed foreign earnings	—			—			(1,872		)
Change in U.S. tax rate	—			161			516
Net change in tax contingencies	1			(2		)	(1		)
Sale of Canadian assets	—			—			279
Sale of North Sea assets	—			(30		)	(48		)
Valuation allowances(1)	972			118			161
All other, net	9			32			(15		)
	$	674		$	672		$	(585	)

(1)

The change in state valuation allowance is included as a component of state income tax.

Net Deferred Tax Liability

The net deferred income tax liability consists of the following:

	December 31,
	2019			2018
	(In millions)
Deferred tax assets:
U.S. and state net operating losses	$	2,108		$	1,633
Capital losses	626			636
Tax credits and other tax incentives	32			39
Foreign tax credits	2,241			2,241
Accrued expenses and liabilities	97			117
Asset retirement obligation	618			649
Equity investments	—			4
Investment in Altus Midstream LP	107			—
Net interest expense limitation	162			65
Lease liability	108			—
Other	88			97
Total deferred tax assets	6,187			5,481
Valuation allowance	(4,959		)	(3,947		)
Net deferred tax assets	1,228			1,534
Deferred tax liabilities:
Deferred income	1			10
Investment in Altus Midstream LP	—			73
Property and equipment	1,432			1,747
Right-of-use asset	106			—
Other	6			4
Total deferred tax liabilities	1,545			1,834
Net deferred income tax liability	$	317		$	300

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

	December 31,
	2019		2018
	(In millions)
Assets:
Deferred charges and other	$	29	$	91
Liabilities:
Deferred income taxes	346		391
Net deferred income tax liability	$	317	$	300

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

In 2019, 2018, and 2017, the Company’s valuation allowance increased by $1.0 billion, increased by $131 million, and decreased by $1.6 billion, respectively, as detailed in the table below:

	2019		2018			2017
	(In millions)
Balance at beginning of year	$	3,947	$	3,816		$	5,401
State(1)	41		15			139
U.S.	971		124			905
Foreign(2)	—		(8		)	(2,629		)
Balance at end of year	$	4,959	$	3,947		$	3,816

(1) Reported as a component of state income taxes.

(2)

In 2017, the Company completed the sale of its Canadian assets. As such, except for capital losses incurred on the sale, the deferred tax assets, liabilities, and valuation allowance related to these assets were removed for 2017.

Net Operating Losses

On December 31, 2019, the Company had net operating losses as follows:

	Amount		Expiration
	(In millions)
Net operating losses:
U.S.	$	8,052	2019 - Indefinite
State	6,090		Various

Schedule of Foreign Tax Credit Carryforward

On December 31, 2019, the Company had foreign tax credits as follows:

	Amount		Expiration
	(In millions)
Foreign tax credits	$	2,241	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:

	2019		2018			2017
	(In millions)
Balance at beginning of year	$	24	$	26		$	15
Additions based on tax positions related to prior year	49		—			—
Additions based on tax positions related to the current year	9		—			12
Reductions for tax positions of prior years	—		(2		)	(1		)
Balance at end of year	$	82	$	24		$	26

Key Jurisdictions of Company's Earliest Open Tax Years

U.S.	2014
Egypt	2005
U.K.	2018