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Income Taxes
3 Months Ended
Mar. 31, 2016
Income Tax Disclosure [Abstract]  
INCOME TAXES
INCOME TAXES
In the first quarter of 2016, we recorded tax expense of $78 million on income before income taxes of $267 million. For the first quarter of 2015, we recorded tax expense of $123 million on income before income taxes of $359 million. Income tax expense for the three months ended March 31, 2016 was favorably impacted by $12 million, primarily related to a $7 million tax benefit resulting from the release of a valuation allowance in our Americas operations and $5 million of tax benefits related to other discrete tax adjustments, including the resolution of an audit in our Americas operations. Income tax expense for the three months ended March 31, 2015 was unfavorably impacted by $4 million of discrete tax adjustments, primarily related to prior tax years, resulting from an audit in EMEA.
Our losses in various foreign taxing jurisdictions in recent periods represented sufficient negative evidence to require us to maintain a full valuation allowance against certain of our net foreign deferred tax assets. However, it is reasonably possible that sufficient positive evidence required to release all, or a portion, of certain valuation allowances will exist during 2016. This may result in a reduction of the valuation allowance by up to $275 million.
At January 1, 2016, we had unrecognized tax benefits of $54 million that if recognized, would have a favorable impact on our tax expense of $40 million. We had accrued interest of $5 million as of January 1, 2016. If not favorably settled, $9 million of the unrecognized tax benefits and all of the accrued interest would require the use of our cash. We do not expect any changes to our unrecognized tax benefits to have a significant impact on our financial position or results of operations.
Generally, years from 2010 onward are still open to examination by foreign taxing authorities. We are open to examination in Germany from 2011 onward and in the United States for 2015.