12. Income Taxes

The following summarizes income tax expense (benefit) and effective tax rates:



	Three Months Ended March 31,
millions except percentages	2015			2014
Income tax expense (benefit)	$	(1,392	)	$	664
Effective tax rate	30		%	(34		)%

The Company reported a loss before income taxes for the three months ended March 31, 2015 and 2014. As a result, items that ordinarily increase or decrease the tax rate will have the opposite effect.

The decrease from the 35% U.S. federal statutory rate for the three months ended March 31, 2015, was primarily attributable to net changes in uncertain tax positions, Algerian exceptional profits taxes, and the tax impact from foreign operations. The decrease from the 35% U.S. federal statutory rate for the three months ended March 31, 2014, was primarily attributable to net changes in uncertain tax positions related to the settlement agreement associated with the Tronox Adversary Proceeding, Algerian exceptional profits taxes, and the tax impact from foreign operations.

At March 31, 2015, the Company had recorded a $577 million tax benefit related to the Tronox settlement. This benefit was net of a $1.3 billion uncertain tax position due to the uncertainty related to the deductibility of the settlement payment. At March 31, 2015, $561 million of this net benefit was presented in other assets and the remainder was presented in deferred income taxes on the Company’s Consolidated Balance Sheet. The Company is a participant in the U.S. Internal Revenue Service’s (IRS) Compliance Assurance Process and has regular discussions with the IRS concerning the Company’s tax positions. Depending on the outcome of such discussions, it is reasonably possible that the amount of the uncertain tax position related to the settlement could change, perhaps materially. See Note 11—Contingencies—Tronox Litigation.

At March 31, 2015, accrued expenses on the Company’s Consolidated Balance Sheet included $388 million of accrued income taxes.