Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

The principal components of EOG's total net deferred income tax liabilities at December 31, 2019 and 2018 were as follows (in thousands):



	2019			2018
Deferred Income Tax Assets (Liabilities)
Foreign Oil and Gas Exploration and Development Costs Deducted for Tax Under Book Depreciation, Depletion and Amortization	$	5,825		$	4,359
Foreign Net Operating Loss	66,675			55,175
Foreign Valuation Allowances	(70,455		)	(58,932		)
Foreign Other	318			175
Total Net Deferred Income Tax Assets	$	2,363		$	777
Deferred Income Tax (Assets) Liabilities
Oil and Gas Exploration and Development Costs Deducted for Tax Over Book Depreciation, Depletion and Amortization	$	5,277,550		$	4,583,517		(1)
Commodity Hedging Contracts	(4,699		)	4,883
Deferred Compensation Plans	(47,650		)	(39,086		)
Accrued Expenses and Liabilities	(8,502		)	(19,097		)
Equity Awards	(108,324		)	(93,977		)
Alternative Minimum Tax Credit Carryforward	(31,904		)	—
Undistributed Foreign Earnings	15,746			22,945
Other	(46,116		)	(45,787		)
Total Net Deferred Income Tax Liabilities	$	5,046,101		$	4,413,398
Total Net Deferred Income Tax Liabilities	$	5,043,738		$	4,412,621

Components of Income (Loss) Before Income Taxes

he components of Income Before Income Taxes for the years indicated below were as follows (in thousands):



	2019		2018		2017

United States	$	3,466,578	$	4,084,156	$	621,610
Foreign	78,689		156,842		39,572
Total	$	3,545,267	$	4,240,998	$	661,182

Components of Income Tax Provision (Benefit)

The principal components of EOG's Income Tax Provision (Benefit) for the years indicated below were as follows (in thousands):



	2019			2018			2017
Current:
Federal	$	(152,258	)	$	(303,853	)	$	33,058
State	10,819			17,048			(2,502		)
Foreign	81,426			65,615			35,323
Total	(60,013		)	(221,190		)	65,879
Deferred:
Federal	626,901			862,075			(1,504,288		)
State	32,541			43,293			26,942
Foreign	(27,784		)	(11,212		)	3,474
Total	631,658			894,156			(1,473,872		)
Other Non-Current: ⁽¹⁾
Federal	245,125			148,992			(513,404		)
Foreign	(6,413		)	—			—
Total	238,712			148,992			(513,404		)

Income Tax Provision (Benefit)	$	810,357		$	821,958		$	(1,921,397	)

(1)

Tax Rate Reconciliation

The differences between taxes computed at the U.S. federal statutory tax rate and EOG's effective rate for the years indicated below were as follows:



	2019		2018			2017
Statutory Federal Income Tax Rate	21.00	%	21.00	%		35.00	%
State Income Tax, Net of Federal Benefit	0.97		1.12			3.38
Income Tax Provision Related to Foreign Operations	0.87		0.51			(0.30	)
Income Tax Provision Related to United Kingdom Operations	—		—			1.78
Income Tax Provision Related to Canadian Operations	—		—			2.30
TCJA ⁽¹⁾	—		(2.60	)	(2)	(328.10	)	(3)
Share-Based Compensation	0.02		(0.47	)		(4.63	)
Other	—		(0.18	)		(0.03	)
Effective Income Tax Rate	22.86	%	19.38	%		(290.60	)%

(1)

The enactment of the Tax Cuts and Jobs Act (TCJA) by the United States in 2017 made numerous changes to federal tax law. Several changes which had a significant impact on EOG include the corporate income tax rate reduction from 35% to 21%, the imposition of a one-time repatriation tax on undistributed foreign earnings and the repeal of the corporate AMT regime (AMT credit carryforwards became refundable over the following four years and were initially subject to a federal sequestration charge). In 2017, EOG revalued its federal deferred income tax assets and liabilities resulting in an earnings benefit of over $2 billion and a substantial reduction of the 2017 effective tax rate. The TCJA measurement-period adjustments were recorded in 2018.


(2)	Includes impact of utilizing certain tax net operating losses (NOLs) ((1.2)%), the reversal of sequestration ((1.0)%) and other tax reform impacts ((0.4)%).


(3)	Includes impact of the federal rate reduction ((327.8)%), federal repatriation tax ((6.6)%), sequestration ((6.4)%) and other tax reform impacts ((0.1)%).

Summary of Valuation Allowance

The principal components of EOG's rollforward of valuation allowances for deferred income tax assets for the years indicated below were as follows (in thousands):



	2019			2018			2017

Beginning Balance	$	167,142		$	466,421		$	383,221
Increase ⁽¹⁾	30,673			23,062			67,333
Decrease ⁽²⁾	(75		)	(26,219		)	(13,687		)
Other ⁽³⁾	3,091			(296,122		)	29,554
Ending Balance	$	200,831		$	167,142		$	466,421


(1)	Increase in valuation allowance related to the generation of tax NOLs and other deferred tax assets.


(2)	Decrease in valuation allowance associated with adjustments to certain deferred tax assets and their related allowance.

(3)

Represents dispositions, revisions and/or foreign exchange rate variances and the effect of statutory income tax rate changes. The United Kingdom operations were sold in the fourth quarter of 2018.