Taxes	3 Months Ended
Mar. 31, 2018
Taxes
Taxes	14. Taxes: For the three months ended March 31, 2018, the company reported a benefit from income taxes of $540 million and its effective tax rate was (47.5) percent. This benefit was primarily driven by the resolution of certain tax matters relating to the ongoing U.S. Federal audit of the company’s 2013-2014 tax returns and the completion of the U.S. Federal audit of amended tax returns filed for prior years. The reserve redeterminations from the U.S. Federal audits and other discrete matters resulted in a benefit of $807 million. This benefit was partially offset by a discrete provisional charge of $107 million as a result of the January 2018 Internal Revenue Service (IRS) guidance related to U.S. tax reform. In the first quarter of 2017, the company reported a benefit from income taxes of $329 million, and its effective tax rate was (23.1) percent, primarily driven by a discrete tax benefit of $582 million related to an intra-entity transfer of assets, which was partially offset by a discrete tax charge of $99 million related to foreign audit activity. In the first quarter of 2018, the IRS issued a Revenue Agent’s Report (“RAR”) relating to the ongoing audit of the company’s U.S. income tax returns for 2013 and 2014. The company has agreed with all of the adjustments in the RAR. The IRS continues to examine certain cross-border transactions undertaken in 2013. Although the IRS could propose additional adjustments, the company believes it is adequately reserved on these issues. The company has redetermined its unrecognized tax benefits for all open years, based on the RAR and associated information and analysis. With respect to major U.S. state and foreign taxing jurisdictions, the company is generally no longer subject to tax examinations for years prior to 2013. The company is no longer subject to income tax examination of its U.S. federal tax return for years prior to 2013. The open years contain matters that could be subject to differing interpretations of applicable tax laws and regulations as it relates to the amount and/or timing of income, deductions and tax credits. Although the outcome of tax audits is always uncertain, the company believes that adequate amounts of tax and interest have been provided for any adjustments that are expected to result for these years. The amount of unrecognized tax benefits at December 31, 2017 decreased $1,015 million in the first quarter of 2018 to $6,016 million. The decrease was primarily related to the resolution of certain tax matters in relation to the U.S. audits described above. The liability at March 31, 2018 of $6,016 million can be reduced by $599 million of offsetting tax benefits associated with timing adjustments, U.S. tax credits, potential transfer pricing adjustments, and state income taxes. The net amount of $5,417 million, if recognized, would favorably affect the company’s effective tax rate. The company is involved in a number of income tax-related matters in India challenging tax assessments issued by the India Tax Authorities. As of March 31, 2018, the company has recorded $666 million as prepaid income taxes in India. A significant portion of this balance represents cash tax deposits paid over time to protect the company’s right to appeal various income tax assessments made by the Indian Tax Authorities. The company believes it will prevail on these matters. U.S. Tax Reform On December 22, 2017, the U.S. Tax Cuts and Jobs Act was enacted. U.S. tax reform introduced many changes, including lowering the U.S. corporate tax rate to 21 percent, changes in incentives, provisions to prevent U.S. base erosion and significant changes in the taxation of international income, including provisions which allow for the repatriation of foreign earnings without U.S. tax. The enactment of U.S. tax reform resulted in the company recording a provisional charge of $5,475 million to tax expense in the fourth-quarter and year-ended December 31, 2017. This charge was the result of the one-time U.S. transition tax and any foreign tax costs on undistributed foreign earnings, as well as the remeasurement of deferred tax balances to the new U.S. Federal tax rate. All components of the provisional charge of $5,475 million were based on the company’s estimates as of December 31, 2017. Specifically, the transition tax, any foreign tax costs, as well as the remeasurement of deferred tax balances are provisional and have been calculated based on existing tax law and the best information available as of the date of estimate. The effect of U.S. tax reform changes on deferred tax assets and liabilities was a benefit of $270 million and was included in the one-time charge. An additional provisional charge of $107 million was recorded in the first quarter as a result of IRS guidance issued in January 2018. The final impact of U.S. tax reform may differ, possibly materially, due to factors such as changes in interpretations and assumptions that the company has made in its assessment, conclusion of the effects of the “Global Intangible Low-Taxed Income” (“GILTI”) provisions, further refinement of the company’s calculations, additional guidance that may be issued by the U.S. government, among other items. The company is still evaluating the Act’s GILTI provisions and has not yet elected an accounting policy. As these various factors are finalized, any change will be recorded as an adjustment to the provision for, or benefit from, income taxes in the period the amounts are determined, not to exceed 12 months from the date of U.S. tax reform enactment. The company has not completed its assessment and the tax charge remains provisional as of March 31, 2018. In early April 2018, additional guidance was issued by the IRS related to U.S. tax reform. It is not expected to result in a material change to the company’s provisional charge and will be recorded as part of the second-quarter 2018 tax provision.

14. Taxes: For the three months ended March 31, 2018, the company reported a benefit from income taxes of $540 million and its effective tax rate was (47.5) percent. This benefit was primarily driven by the resolution of certain tax matters relating to the ongoing U.S. Federal audit of the company’s 2013-2014 tax returns and the completion of the U.S. Federal audit of amended tax returns filed for prior years. The reserve redeterminations from the U.S. Federal audits and other discrete matters resulted in a benefit of $807 million. This benefit was partially offset by a discrete provisional charge of $107 million as a result of the January 2018 Internal Revenue Service (IRS) guidance related to U.S. tax reform. In the first quarter of 2017, the company reported a benefit from income taxes of $329 million, and its effective tax rate was (23.1) percent, primarily driven by a discrete tax benefit of $582 million related to an intra-entity transfer of assets, which was partially offset by a discrete tax charge of $99 million related to foreign audit activity.

In the first quarter of 2018, the IRS issued a Revenue Agent’s Report (“RAR”) relating to the ongoing audit of the company’s U.S. income tax returns for 2013 and 2014. The company has agreed with all of the adjustments in the RAR. The IRS continues to examine certain cross-border transactions undertaken in 2013. Although the IRS could propose additional adjustments, the company believes it is adequately reserved on these issues. The company has redetermined its unrecognized tax benefits for all open years, based on the RAR and associated information and analysis.

With respect to major U.S. state and foreign taxing jurisdictions, the company is generally no longer subject to tax examinations for years prior to 2013. The company is no longer subject to income tax examination of its U.S. federal tax return for years prior to 2013. The open years contain matters that could be subject to differing interpretations of applicable tax laws and regulations as it relates to the amount and/or timing of income, deductions and tax credits. Although the outcome of tax audits is always uncertain, the company believes that adequate amounts of tax and interest have been provided for any adjustments that are expected to result for these years.

The amount of unrecognized tax benefits at December 31, 2017 decreased $1,015 million in the first quarter of 2018 to $6,016 million. The decrease was primarily related to the resolution of certain tax matters in relation to the U.S. audits described above. The liability at March 31, 2018 of $6,016 million can be reduced by $599 million of offsetting tax benefits associated with timing adjustments, U.S. tax credits, potential transfer pricing adjustments, and state income taxes. The net amount of $5,417 million, if recognized, would favorably affect the company’s effective tax rate.

The company is involved in a number of income tax-related matters in India challenging tax assessments issued by the India Tax Authorities. As of March 31, 2018, the company has recorded $666 million as prepaid income taxes in India. A significant portion of this balance represents cash tax deposits paid over time to protect the company’s right to appeal various income tax assessments made by the Indian Tax Authorities. The company believes it will prevail on these matters.

U.S. Tax Reform

On December 22, 2017, the U.S. Tax Cuts and Jobs Act was enacted. U.S. tax reform introduced many changes, including lowering the U.S. corporate tax rate to 21 percent, changes in incentives, provisions to prevent U.S. base erosion and significant changes in the taxation of international income, including provisions which allow for the repatriation of foreign earnings without U.S. tax. The enactment of U.S. tax reform resulted in the company recording a provisional charge of $5,475 million to tax expense in the fourth-quarter and year-ended December 31, 2017. This charge was the result of the one-time U.S. transition tax and any foreign tax costs on undistributed foreign earnings, as well as the remeasurement of deferred tax balances to the new U.S. Federal tax rate.

All components of the provisional charge of $5,475 million were based on the company’s estimates as of December 31, 2017. Specifically, the transition tax, any foreign tax costs, as well as the remeasurement of deferred tax balances are provisional and have been calculated based on existing tax law and the best information available as of the date of estimate. The effect of U.S. tax reform changes on deferred tax assets and liabilities was a benefit of $270 million and was included in the one-time charge. An additional provisional charge of $107 million was recorded in the first quarter as a result of IRS guidance issued in January 2018. The final impact of U.S. tax reform may differ, possibly materially, due to factors such as changes in interpretations and assumptions that the company has made in its assessment, conclusion of the effects of the “Global Intangible Low-Taxed Income” (“GILTI”) provisions, further refinement of the company’s calculations, additional guidance that may be issued by the U.S. government, among other items. The company is still evaluating the Act’s GILTI provisions and has not yet elected an accounting policy.

As these various factors are finalized, any change will be recorded as an adjustment to the provision for, or benefit from, income taxes in the period the amounts are determined, not to exceed 12 months from the date of U.S. tax reform enactment. The company has not completed its assessment and the tax charge remains provisional as of March 31, 2018.

In early April 2018, additional guidance was issued by the IRS related to U.S. tax reform. It is not expected to result in a material change to the company’s provisional charge and will be recorded as part of the second-quarter 2018 tax provision.