Income Taxes (Tables)

12 Months Ended

Dec. 31, 2015

Schedule of Earnings (Loss) from Continuing Operations Before Tax by Jurisdiction

Earnings (loss) from continuing operations before tax by jurisdiction are as follows:



	Year Ended December 31,
	2015	2014	2013
	(In $ millions)
US	231	534	806
International⁽¹⁾	257	407	803
Total	488	941	1,609

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⁽¹⁾	Includes aggregate earnings generated by operations in Bermuda, Luxembourg, the Netherlands and Hong Kong of $330 million, $308 million and $275 million for the years ended December 31, 2015, 2014 and 2013, respectively, which have an aggregate effective income tax rate of 6.1%, 4.8% and 4.0% for each year, respectively.

Schedule of Income Tax Provision (Benefit)

The income tax provision (benefit) consists of the following:



	Year Ended December 31,
	2015		2014		2013
	(In $ millions)
Current
US	28		108		78
International	152		56		83
Total	180		164		161
Deferred
US	54		156		194
International	(33	)	(6	)	153
Total	21		150		347
Total	201		314		508

Schedule of Effective Tax Rate Reconciliation

A reconciliation of the significant differences between the US federal statutory tax rate of 35% and the effective income tax rate on income from continuing operations is as follows:



	Year Ended December 31,
	2015		2014		2013
	(In $ millions, except percentages)
Income tax provision computed at US federal statutory tax rate	171		329		563
Change in valuation allowance	124		49		89
Equity income and dividends	(33	)	(50	)	(44	)
(Income) expense not resulting in tax impact, net	(32	)	(34	)	(33	)
US tax effect of foreign earnings and dividends	15		49		35
Foreign tax credits	(4	)	(34	)	(38	)
Other foreign tax rate differentials	(41	)	(33	)	(55	)
Legislative changes	—		—		(19	)
Tax-deductible interest on foreign equity investments and other related items	—		12		11
State income taxes, net of federal benefit	6		9		11
Other, net	(5	)	17		(12	)
Income tax provision (benefit)	201		314		508

Effective income tax rate	41	%	33	%	32	%

Schedule of Consolidated Deferred Tax Assets and Liabilities

Significant components of the consolidated deferred tax assets and liabilities are as follows:



	As of December 31,
	2015		2014
	(In $ millions)
Deferred Tax Assets
Pension and postretirement obligations	434		424
Accrued expenses	40		41
Inventory	14		10
Net operating loss	683		468
Tax credit carryforwards	88		100
Other	202		165
Subtotal	1,461		1,208
Valuation allowance⁽¹⁾	(448	)	(413	)
Total	1,013		795
Deferred Tax Liabilities
Depreciation and amortization	380		416
Investments in affiliates	395		143
Other	114		102
Total	889		661
Net deferred tax assets (liabilities)	124		134

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⁽¹⁾	Includes deferred tax asset valuation allowances for the Company's deferred tax assets in the US, Luxembourg, Spain, China, Singapore, the United Kingdom, Canada and France. These valuation allowances relate primarily to net operating loss carryforward benefits and other net deferred tax assets, all of which may not be realizable.

Schedule of Activity Related to Uncertain Tax Positions

Activity related to uncertain tax positions is as follows:



	Year Ended December 31,
	2015			2014		2013
	(In $ millions)
As of the beginning of the year	228			244		218
Increases in tax positions for the current year	13			7		3
Increases in tax positions for prior years	76			24		57
Decreases in tax positions for prior years	(126	)		(46	)	(32	)
Decreases due to settlements	(33	)		(1	)	(2	)
As of the end of the year	158			228		244

Total uncertain tax positions that if recognized would impact the effective tax rate	144			245		258
Total amount of interest expense (benefit) and penalties recognized in the consolidated statements of operations	(12	)	⁽¹⁾	2		12
Total amount of interest expense and penalties recognized in the consolidated balance sheets	43			67		65

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⁽¹⁾	This amount reflects interest on uncertain tax positions, the impact of currency and release of certain tax positions as a result of audit closure that was reflected in the consolidated statements of operations. In addition, the Company also paid an additional $12 million of previously accrued amounts due to settlements of tax examinations.