INCOME TAXES (Notes)

9 Months Ended

Sep. 30, 2016

Income Tax Expense (Benefit), Continuing Operations [Abstract]

Income Tax Disclosure [Text Block]

INCOME TAXES

In the second quarter of 2016, an adjustment was made to a reserve for a tax matter regarding a historical change in the legal ownership structure of a nonconsolidated affiliate. The adjustment arose due to recent proceedings and the Company’s ongoing assessment of the unrecognized tax benefits. The adjustment impacted multiple jurisdictions and resulted in an increase of $396 million to “Other noncurrent obligations” and an increase of $339 million to “Deferred income tax assets” in the consolidated balance sheets at June 30, 2016, resulting in an unfavorable impact of $57 million to “Provision for income taxes” in the consolidated statements of income in the second quarter of 2016.

The following table provides a reconciliation of the Company's unrecognized tax benefits for the periods ended September 30, 2016 and December 31, 2015:

Total Gross Unrecognized Tax Benefits In millions	Sep 30, 2016			Dec 31, 2015
Balance at January 1	$	280		$	240
Increases related to positions taken on items from prior years	303			92
Decreases related to positions taken on items from prior years	(12		)	(6		)
Increases related to positions taken in the current year (1)	133			10
Settlement of uncertain tax positions with tax authorities	(89		)	(56		)
Decreases due to expiration of statutes of limitations	(1		)	—
Balance at end of period	$	614		$	280

(1) Includes $126 million related to the DCC Transaction.

At September 30, 2016, the total amount of unrecognized tax benefits which would impact the effective tax rate if recognized was $226 million ($206 million at December 31, 2015). A portion of the increase in the unrecognized tax benefits at September 30, 2016, is related to the matter discussed above, and, if paid, is creditable in the United States.

Interest and penalties associated with uncertain tax positions are recognized as components of “Provision for income taxes,” in the consolidated statements of income and totaled a benefit of $17 million for the three months ended September 30, 2016 (a benefit of $1 million for the three months ended September 30, 2015). During the nine months ended September 30, 2016, the Company recognized a charge of $73 million for interest and penalties (a charge of $14 million for the nine months ended September 30, 2015). The Company’s accrual for interest and penalties associated with uncertain tax positions was $246 million at September 30, 2016 and $159 million at December 31, 2015.