Income Taxes Income Taxes

6 Months Ended

Jun. 30, 2019

Income Tax Disclosure [Abstract]

Income Tax Disclosure

Income Taxes

We recognized income tax benefit from continuing operations of $90 million and income tax expense from continuing operations of $21 million for the three months and six months ended June 30, 2019, respectively, compared to income tax expense of $113 million and $189 million for the same periods in 2018.

The decreases in income tax expense for the three months and six months ended June 30, 2019, compared to the same periods in 2018, were primarily due to a release of valuation allowance on foreign tax credit carryforwards during the second quarter of 2019. The valuation allowance release during the three months ended June 30, 2019, was primarily driven by our current capacity to engage in certain securitization transactions and the market demand from investors related to these transactions, coupled with the anticipated timing of the forecasted expiration of certain tax credit carryforwards. This release of valuation allowance of approximately $200 million resulted in a significant variation in the customary relationship between pretax income and income tax expense. Additionally, the decrease in income tax expense for the six months ended June 30, 2019, compared to the same period in 2018, was partially offset by the tax effects of an increase in pretax earnings.

As of each reporting date, we consider existing evidence, both positive and negative, that could impact our view with regard to future realization of deferred tax assets. Following the release of the aforementioned valuation allowance, we continue to believe it is more likely than not that the benefit for certain foreign tax credit carryforwards and state net operating loss carryforwards will not be realized. In recognition of this risk, we continue to provide a partial valuation allowance on the deferred tax assets relating to these carryforwards and it is reasonably possible that the valuation allowance may change in the next twelve months.