Provision (Benefit) for Income Taxes

6 Months Ended

Jun. 30, 2017

Income Tax Disclosure [Abstract]

Provision (Benefit) for Income Taxes [Text Block]

Note 6 – Provision (Benefit) for Income Taxes

The Provision (benefit) for income taxes includes:

	Three Months Ended   June 30,					Six Months Ended   June 30,
	2017		2016			2017		2016
	(Millions)
Current:
Federal	$	—	$	—		$	3	$	—
State	2		—			8		—
Foreign	—		(1		)	—		(1		)
	2		(1		)	11		(1		)
Deferred:
Federal	59		(52		)	74		(57		)
State	4		(18		)	17		(11		)
Foreign	—		(74		)	—		(74		)
	63		(144		)	91		(142		)
Provision (benefit) for income taxes	$	65	$	(145	)	$	102	$	(143	)

The effective income tax rate for the total provision for the three months ended June 30, 2017, is less than the federal statutory rate primarily due to the impact of the allocation of income to nontaxable noncontrolling interests, partially offset by the effect of state income taxes.

The effective income tax rate for the total provision for the six months ended June 30, 2017, is less than the federal statutory rate primarily due to releasing a $127 million valuation allowance on a deferred tax asset associated with a capital loss carryover and the impact of the allocation of income to nontaxable noncontrolling interests, partially offset by the effect of state income taxes. In 2016, we recorded a valuation allowance on a deferred tax asset associated with a capital loss that was incurred with the sale of our Canadian operations. The sale of the Geismar olefins facility in July 2017 (see Note 3 – Assets Held for Sale) is expected to generate capital gains sufficient to offset the capital loss carryover, thereby allowing us to reverse the valuation allowance in full.

The effective income tax rates for the three and six months ended June 30, 2016, are less than the federal statutory rate primarily due to a valuation allowance associated with impairments of foreign operations, the reversal of anticipatory foreign tax credits related to assets held for sale and the impact of the allocation of loss to nontaxable noncontrolling interests, partially offset by the effects of taxes on foreign operations and state income taxes. The foreign income tax provisions include the tax effect of a $341 million impairment associated with Williams Partners’ Canadian operations. (See Note 11 – Fair Value Measurements and Guarantees.)

During the next 12 months, we do not expect ultimate resolution of any unrecognized tax benefit associated with domestic or international matters to have a material impact on our unrecognized tax benefit position.