Occidental Petroleum 2006 Annual Report Download - page 70
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The tax effects of temporary differences resulting in deferred income taxes at December 31, 2006 and 2005 were as follows:
Included in total deferred tax assets was a current portion aggregating $190 million and $200 million as of December 31, 2006 and 2005,
respectively, that was reported in prepaid expenses and other.
Occidental has, as of December 31, 2006, foreign tax credit carryforwards of $133 million which expire in varying amounts through 2016 and
various state net operating loss carryforwards which have varying carryforward periods through 2025. Occidental established a valuation
allowance against these foreign tax credit carryforwards and state net operating losses as the Company believes these assets will not be utilized in
the statutory carryforward periods. In addition, Occidental establishes a valuation allowance against deferred tax assets resulting from deductible
temporary differences when it believes future benefit is unlikely to be realized.
A deferred tax liability has not been recognized for temporary differences related to Occidental’s investment in certain foreign subsidiaries
primarily as a result of unremitted earnings of consolidated subsidiaries aggregating approximately $5.4 billion at December 31, 2006, as it is
Occidental’s intention, generally, to reinvest such earnings permanently. If the earnings of these foreign subsidiaries were not indefinitely
reinvested, an additional deferred tax liability of approximately $200 million would be required, assuming utilization of available foreign tax
credits.
The discontinued operations include an income tax benefit of $209 million in 2006, and a charge of $96 million in 2005 and $46 million in
2004.
The cumulative effect of changes in accounting principles was reduced by an income tax charge of $2 million in 2005.
Additional paid-in capital was credited $140 million in 2006, $74 million in 2005 and $75 million in 2004 for a tax benefit from the exercise of
certain stock based compensation awards.
NOTE 11 STOCKHOLDERS' EQUITY
The following is an analysis of common stock:
In May 2006, Occidental amended its Restated Certificate of Incorporation to increase the number of authorized shares of common stock to 1.1
billion. The par value per share remained unchanged.
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