Hess 1999 Annual Report Download - page 42

Deferred income taxes arise from temporary differences
between the tax basis of assets and liabilities and their
reported amounts in the financial statements. A summary
of the components of deferred tax liabilities and assets at
December 31 follows:
Thousands of dollars 1999 1998
Deferred tax liabilities
Fixed assets and investments $ 320,324 $ 272,461
Foreign petroleum taxes 224,359 238,568
Other 55,917 58,251
Total deferred tax liabilities 600,600 569,280
Deferred tax assets
Accrued liabilities 98,510 194,109
Net operating and capital loss
carryforwards 299,962 224,765
Tax credit carryforwards 137,598 126,590
Other 78,691 41,592
Total deferred tax assets 614,761 587,056
Valuation allowance (182,253) (141,113)
Net deferred tax assets 432,508 445,943
Net deferred tax liabilities $ 168,092 $ 123,337
The difference between the Corporation’s effective income
tax rate and the United States statutory rate is reconciled
below:
1999 1998 1997
United States statutory rate 35.0% (35.0)% 35.0%
Effect of foreign operations,
including foreign tax credits 3.0 24.2 72.3
Effect of capital and other
loss carryforwards — (.2) (8.3)
State income taxes, net of
Federal income tax benefit .6 .2 .7
Prior year adjustments (.8) (.3) (3.5)
Tax credits
—— (.8)
Other (.2) .4 (1.3)
Total 37.6% (10.7)% 94.1%
The Corporation has not recorded deferred income taxes
applicable to undistributed earnings of foreign subsidiaries
that are indefinitely reinvested in foreign operations. Undis-
tributed earnings amounted to approximately $950 million at
December 31, 1999, excluding amounts which, if remitted,
generally would not result in any additional U.S. income taxes
because of available foreign tax credits. If the earnings of such
foreign subsidiaries were not indefinitely reinvested, a
deferred tax liability of approximately $120 million would
have been required.
For income tax reporting at December 31, 1999, the Corpo-
ration has general business credit carryforwards of approxi-
mately $30 million, principally expiring in 2000 and 2001. In
addition, the Corporation has alternative minimum tax credit
carryforwards of approximately $110 million, which can be
carried forward indefinitely. At December 31, 1999, a net oper-
ating loss carryforward of approximately $1 billion is also
available to offset income of the HOVENSA joint venture
partners. Net operating loss carryforwards relating to several
foreign exploration and production areas amount to approxi-
mately $190 million at December 31, 1999.
Income taxes paid (net of refunds) in 1999, 1998 and 1997
amounted to $141,465,000, $140,470,000 and $259,767,000,
respectively.
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