Halliburton 2013 Annual Report Download - page 79
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63
Note 9. Income Taxes
The components of the (provision)/benefit for income taxes on continuing operations were:
Year Ended December 31
Millions of dollars
2013
2012
2011
Current income taxes:
Federal
$
(245
)
$
(695
)
$
(1,026
)
Foreign
(485
)
(328
)
(334
)
State
(49
)
(47
)
(109
)
Total current
(779
)
(1,070
)
(1,469
)
Deferred income taxes:
Federal
4
(168
)
(28
)
Foreign
125
15
57
State
2
(12
)
1
Total deferred
131
(165
)
30
Provision for income taxes
$
(648
)
$
(1,235
)
$
(1,439
)
The United States and foreign components of income from continuing operations before income taxes were as follows:
Year Ended December 31
Millions of dollars
2013
2012
2011
United States
$
1,070
$
2,826
$
4,040
Foreign
1,694
996
409
Total
$
2,764
$
3,822
$
4,449
Reconciliations between the actual provision for income taxes on continuing operations and that computed by applying
the United States statutory rate to income from continuing operations before income taxes were as follows:
Year Ended December 31
2013
2012
2011
United States statutory rate
35.0
%
35.0
%
35.0
%
Impact of foreign income taxed at different rates
(9.3
)
(2.5
)
(0.5
)
Domestic manufacturing deduction
(2.0
)
(2.2
)
(2.1
)
State income taxes
1.7
1.6
1.6
Adjustments of prior year taxes
(1.3
)
(0.6
)
(1.5
)
Other impact of foreign operations
(0.2
)
(0.5
)
(0.4
)
Other items, net
(0.4
)
1.5
0.2
Total effective tax rate on continuing operations
23.5
%
32.3
%
32.3
%
Our effective tax rate on continuing operations was 23.5% for 2013 and 32.3% for 2012 and 2011. The 2013 effective
tax rate on continuing operations was positively impacted by several items during the year, including federal tax benefits of
approximately $50 million due to the reinstatement of certain tax benefits and credits related to the first quarter enactment of
the American Taxpayer Relief Act of 2012. Also contributing to the lower tax rate in 2013 was a $1.0 billion loss contingency
related to the Macondo well incident, which was tax-effected at the United States statutory rate, as well as some favorable tax
items in Latin America in the fourth quarter. Additionally, our effective tax rate was positively impacted by lower tax rates in
certain foreign jurisdictions, as we continue to reposition our technology, supply chain, and manufacturing infrastructure to
more effectively serve our customers internationally.
We have not provided United States income taxes and foreign withholding taxes on the undistributed earnings of
foreign subsidiaries as of December 31, 2013 because we intend to permanently reinvest such earnings outside the United
States. If these foreign earnings were to be repatriated in the future, the related United States tax liability may be reduced by
any foreign income taxes previously paid on these earnings. As of December 31, 2013, the cumulative amount of earnings upon
which United States income taxes have not been provided is approximately $6.1 billion. It is not practicable to estimate the
amount of unrecognized deferred tax liability related to these earnings at this time.