Income Taxes

6 Months Ended

Jun. 30, 2019

Income Taxes [Abstract]

Income Taxes

5. Income Taxes

Our provision for income taxes and the related effective income tax rates are as follows (in millions):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2019		2018		2019		2018
Provision for income taxes	$	(124)	$	(126)	$	(200)	$	(250)
Effective tax rate		57.4%		14.6%		25.3%		62.7%

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For the three and six months ended June 30, 2019, the effective income tax rate differed from the U.S. statutory rate of 21% primarily due to additional net tax expense of $86 million driven by changes to our tax reserves, rate differences on income (loss) of consolidated foreign companies, estimated impact of base erosion and anti-deferral tax (“BEAT”) offset by the expected benefits related to foreign derived intangible income (“FDII”) and the release of foreign valuation allowances on deferred tax assets.

For the three months ended June 30, 2018, the effective income tax rate differed from the U.S. statutory rate of 21% primarily due to a reduction in the estimated impact of BEAT attributable to year-to-date losses from foreign exchange and translated earnings contracts, additional tax amounts related to global intangible low-taxed income (“GILTI”) and a benefit from the release of a foreign valuation allowance on deferred tax assets.

For the six months ended June 30, 2018, the effective income tax rate differed from the U.S. statutory rate of 21% primarily due to additional tax expense of $172 million related to a preliminary agreement with the Internal Revenue Service (“IRS”) to settle the income tax audit for the years 2013 and 2014, additional tax amounts related to GILTI and benefits from the release of a foreign valuation allowance on deferred tax assets. The company expects to make a payment before the end of the year of approximately $40 million for the 2013-2014 tax audit settlements with the IRS. As of June 30, 2019, the company is not expecting any significant movements in the uncertain tax benefits in the next twelve months.