Income Tax

9 Months Ended

Sep. 30, 2020

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

Income Tax

The provision for income tax expense differed from the amounts computed by applying the U.S. federal income tax statutory rate of 21.0% to pre-tax income as a result of the following for the three and nine months ended September 30, 2020 and 2019, respectively (dollars in millions):

	Three months ended September 30,						Nine months ended September 30,
	2020			2019			2020			2019
Tax provision at U.S. statutory rate	$	60		$	73		$	81		$	173
Increase (decrease) in income taxes resulting from:
Tax rate differences on income in other jurisdictions	3			—			17			1
Differences in tax bases in foreign jurisdictions	(4		)	(10		)	(17		)	(31		)
Deferred tax valuation allowance	(2		)	28			—			51
Amounts related to uncertain tax positions	2			3			9			6
Corporate rate changes	13			—			13			(1		)
GILTI, net of credits	4			—			4			—
Equity based compensation	—			(1		)	—			(6		)
Return to provision adjustments	(3		)	(8		)	(4		)	(4		)
Accrued Expenses	(1		)	—			(1		)	—
Other, net	—			(1		)	(1		)	—
Total provision for income taxes	$	72		$	84		$	101		$	189
Effective tax rate	25.5		%	24.3		%	26.3		%	22.9		%

The effective tax rate for the third quarter and first nine months of 2020 was higher than the U.S. Statutory rate of 21.0% primarily as a result of corporate rate changes, primarily in the United Kingdom, global intangible low-taxed income (“GILTI”) and income earned in jurisdictions with tax rates higher than the U.S. Statutory rate. These expenses were partially offset by differences in tax bases of foreign jurisdictions and return to provision adjustments.

The effective tax rates for the third quarter and first nine months of 2019 were higher than the U.S. Statutory rate of 21.0% primarily as a result of valuation allowances established on deferred tax assets in foreign jurisdictions and the accrual of uncertain tax positions, which were partially offset by differences in tax bases of foreign jurisdictions, return to provision adjustments, and tax benefits related to equity compensation.