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Income Taxes | 12 Months Ended
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Dec. 31, 2016
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES Income Tax Provision — The following table summarizes the expense for income taxes on continuing operations for the periods indicated (in millions):
December 31, |  | 2016 |  | 2015 |  | 2014
Federal: | Current | $ | 2 |  |  | $ | 9 |  |  | $ | — |
| Deferred | (361 | ) |  | (59 | ) |  | (127 | )
State: | Current | 1 |  |  | 1 |  |  | 1 |
| Deferred | (4 | ) |  | (5 | ) |  | 1 |
Foreign: | Current | 326 |  |  | 505 |  |  | 432 |
| Deferred | (152 | ) |  | 21 |  |  | 64 |
Total |  | $ | (188 | ) |  | $ | 472 |  |  | $ | 371 |
Effective and Statutory Rate Reconciliation — The following table summarizes a reconciliation of the U.S. statutory federal income tax rate to the Company's effective tax rate as a percentage of income from continuing operations before taxes for the periods indicated:
December 31, |  | 2016 |  | 2015 |  | 2014
Statutory Federal tax rate |  | 35 | % |  | 35 | % |  | 35 | %
State taxes, net of Federal tax benefit |  | (24 | )% |  | (5 | )% |  | (1 | )%
Taxes on foreign earnings |  | (215 | )% |  | 3 | % |  | (15 | )%
Valuation allowance |  | 14 | % |  | (4 | )% |  | (1 | )%
Uncertain tax positions |  | 10 | % |  | (1 | )% |  | — | %
Noncontrolling Interest on Buffalo Gap impairments |  | 42 | % |  | 3 | % |  | — | %
Change in tax law |  | 16 | % |  | — | % |  | 4 | %
Goodwill impairment |  | — | % |  | 10 | % |  | 4 | %
Other—net |  | (15 | )% |  | — | % |  | — | %
Effective tax rate |  | (137 | )% |  | 41 | % |  | 26 | %
For 2016, included in the favorable 215% taxes on foreign earnings percentage above is approximately 151% related to the current year benefit resulting from a restructuring of one of our Brazilian subsidiaries that increased tax basis in long-term assets. The 42% Buffalo Gap impairments item relates to the amounts of impairment allocated to noncontrolling interest which is nondeductible. Included in the favorable 15% 2014 taxes on foreign earnings percentage above is approximately 9% related to the sale of approximately 45% of the Company's interest in Masin AES Pte Ltd., which owns the Company's interests in the Philippines, and the sale of the Company's interests in four U.K. wind projects. Neither of these transactions gave rise to income tax expense. Income Tax Receivables and Payables — The current income taxes receivable and payable are included in Other Current Assets and Accrued and Other Liabilities, respectively, on the accompanying Consolidated Balance Sheets. The noncurrent income taxes receivable and payable are included in Other Noncurrent Assets and Other Noncurrent Liabilities, respectively, on the accompanying Consolidated Balance Sheets. The following table summarizes the income taxes receivable and payable as of the periods indicated (in millions):
December 31, |  | 2016 |  | 2015
Income taxes receivable—current |  | $ | 145 |  |  | $ | 166 |
Total income taxes receivable |  | $ | 145 |  |  | $ | 166 |
Income taxes payable—current |  | $ | 149 |  |  | $ | 264 |
Income taxes payable—noncurrent |  | 22 |  |  | 35 |
Total income taxes payable |  | $ | 171 |  |  | $ | 299 |
Chilean Tax Reform — In February 2016, the Chilean government enacted further reforms to its income tax laws that resulted in an increase to statutory income tax rates for most of our Chilean businesses from 25% to 25.5% in 2017 and to 27% for 2018 and future years. The impact of remeasuring deferred taxes to account for the enacted change in future applicable income tax rates was recognized as discrete income tax expense in the first quarter of 2016, resulting in an increase of $26 million to consolidated income tax expense. Deferred Income Taxes — Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes and (b) operating loss and tax credit carryforwards. These items are stated at the enacted tax rates that are expected to be in effect when taxes are actually paid or recovered. As of December 31, 2016, the Company had federal net operating loss carryforwards for tax purposes of approximately $3.5 billion expiring in years 2021 to 2036. Approximately $88 million of the net operating loss carryforward related to stock option deductions will be recognized in additional paid-in capital when realized. The Company also had federal general business tax credit carryforwards of approximately $20 million expiring primarily from 2021 to 2036, and federal alternative minimum tax credits of approximately $5 million that carry forward without expiration. The Company had state net operating loss carryforwards as of December 31, 2016 of approximately $9.1 billion expiring in years 2017 to 2036. As of December 31, 2016, the Company had foreign net operating loss carryforwards of approximately $3.1 billion that expire at various times beginning in 2017 and some of which carry forward without expiration, and tax credits available in foreign jurisdictions of approximately $32 million, $22 million of which expire in 2021 and $8 million of which carryforward without expiration. Valuation allowances decreased $18 million during 2016 to $876 million at December 31, 2016. This net decrease was primarily the result of valuation allowance releases and foreign exchange gains at certain of our Brazil subsidiaries. Valuation allowances decreased $103 million during 2015 to $894 million at December 31, 2015. This net decrease was primarily the result of foreign exchange losses and valuation allowance releases at certain of our Brazil and Vietnam subsidiaries. The Company believes that it is more likely than not that the net deferred tax assets as shown below will be realized when future taxable income is generated through the reversal of existing taxable temporary differences and income that is expected to be generated by businesses that have long-term contracts or a history of generating taxable income. The Company continues to monitor the utilization of its deferred tax asset for its U.S. consolidated net operating loss carryforward. Although management believes it is more likely than not that this deferred tax asset will be realized through generation of sufficient taxable income or reversal of deferred tax liabilities prior to expiration of the loss carryforwards, such realization is not assured. The following table summarizes deferred tax assets and liabilities, as of the periods indicated (in millions):
December 31, |  | 2016 |  | 2015
Differences between book and tax basis of property |  | $ | (2,071 | ) |  | $ | (2,199 | )
Other taxable temporary differences |  | (80 | ) |  | (328 | )
Total deferred tax liability |  | (2,151 | ) |  | (2,527 | )
Operating loss carryforwards |  | 2,116 |  |  | 2,107 |
Capital loss carryforwards |  | 59 |  |  | 66 |
Bad debt and other book provisions |  | 182 |  |  | 156 |
Retirement costs |  | 306 |  |  | 146 |
Tax credit carryforwards |  | 54 |  |  | 55 |
Other deductible temporary differences |  | 287 |  |  | 211 |
Total gross deferred tax asset |  | 3,004 |  |  | 2,741 |
Less: valuation allowance |  | (876 | ) |  | (894 | )
Total net deferred tax asset |  | 2,128 |  |  | 1,847 |
Net deferred tax (liability) |  | $ | (23 | ) |  | $ | (680 | )
The Company considers undistributed earnings of certain foreign subsidiaries to be indefinitely reinvested outside of the U.S. and, accordingly, no U.S. deferred taxes have been recorded with respect to such earnings in accordance with the relevant accounting guidance for income taxes. Should the earnings be remitted as dividends, the Company may be subject to additional U.S. taxes, net of allowable foreign tax credits. As of December 31, 2016, the cumulative amount of foreign un-remitted earnings upon which U.S. income taxes have not been provided is approximately $4 billion. It is not practicable to estimate the amount of any additional taxes which may be payable on the undistributed earnings. Income from operations in certain countries is subject to reduced tax rates as a result of satisfying specific commitments regarding employment and capital investment. The Company's income tax benefits related to the tax status of these operations are estimated to be $20 million, $21 million and $38 million for the years ended December 31, 2016, 2015 and 2014, respectively. The per share effect of these benefits after noncontrolling interests was $0.02, $0.02 and $0.04 for the years ended December 31, 2016, 2015 and 2014, respectively. Included in the Company's income tax benefits is the benefit related to our operations in Vietnam, which is estimated to be $15 million and $8 million for the years ended December 31, 2016 and 2015, respectively. The per share effect of these benefits related to our operations in Vietnam after noncontrolling interest was $0.01 and $0.01 for the years ended December 31, 2016 and 2015, respectively. The following table shows the income (loss) from continuing operations, before income taxes, net equity in earnings of affiliates and noncontrolling interests, for the periods indicated (in millions):
December 31, |  | 2016 |  | 2015 |  | 2014
U.S. |  | $ | (1,305 | ) |  | $ | (612 | ) |  | $ | (560 | )
Non-U.S. |  | 1,442 |  |  | 1,766 |  |  | 2,003 |
Total |  | $ | 137 |  |  | $ | 1,154 |  |  | $ | 1,443 |
Uncertain Tax Positions — Uncertain tax positions have been classified as noncurrent income tax liabilities unless they are expected to be paid in one year. The Company's policy for interest and penalties related to income tax exposures is to recognize interest and penalties as a component of the provision for income taxes in the Consolidated Statements of Operations. The following table shows the total amount of gross accrued income tax included in the Consolidated Balance Sheets for the periods indicated (in millions):
December 31, |  | 2016 |  | 2015
Interest related |  | $ | 10 |  |  | $ | 8 |
Penalties related |  | 1 |  |  | — |
The following table shows the total expense/(benefit) related to unrecognized tax benefits for the periods indicated (in millions):
December 31, |  | 2016 |  | 2015 |  | 2014
Total expense for interest related to unrecognized tax benefits |  | $ | 4 |  |  | $ | — |  |  | $ | 2 |
Total benefit for penalties related to unrecognized tax benefits |  | — |  |  | — |  |  | (1 | )
We are potentially subject to income tax audits in numerous jurisdictions in the U.S. and internationally until the applicable statute of limitations expires. Tax audits by their nature are often complex and can require several years to complete. The following is a summary of tax years potentially subject to examination in the significant tax and business jurisdictions in which we operate:
Jurisdiction |  | Tax Years Subject to Examination
Argentina |  | 2010-2016
Brazil |  | 2011-2016
Chile |  | 2013-2016
Colombia |  | 2014-2016
Dominican Republic |  | 2013-2016
El Salvador |  | 2014-2016
Netherlands |  | 2014-2016
Philippines |  | 2013-2016
United Kingdom |  | 2010-2016
United States (Federal) |  | 2013-2016
As of December 31, 2016, 2015 and 2014, the total amount of unrecognized tax benefits was $369 million, $373 million and $394 million, respectively. The total amount of unrecognized tax benefits that would benefit the effective tax rate as of December 31, 2016, 2015 and 2014 is $332 million, $343 million and $366 million, respectively, of which $24 million, $24 million and $24 million, respectively, would be in the form of tax attributes that would warrant a full valuation allowance. The total amount of unrecognized tax benefits anticipated to result in a net decrease to unrecognized tax benefits within 12 months of December 31, 2016 is estimated to be up to $10 million, primarily relating to statute of limitation lapses and tax exam settlements. The following is a reconciliation of the beginning and ending amounts of unrecognized tax benefits for the periods indicated (in millions):
December 31, |  | 2016 |  | 2015 |  | 2014
Balance at January 1 |  | $ | 373 |  |  | $ | 394 |  |  | $ | 392 |
Additions for current year tax positions |  | 8 |  |  | 7 |  |  | 7 |
Additions for tax positions of prior years |  | 1 |  |  | 12 |  |  | 14 |
Reductions for tax positions of prior years |  | (1 | ) |  | (7 | ) |  | (2 | )
Effects of foreign currency translation |  | 2 |  |  | (7 | ) |  | (3 | )
Settlements |  | (13 | ) |  | (19 | ) |  | (2 | )
Lapse of statute of limitations |  | (1 | ) |  | (7 | ) |  | (12 | )
Balance at December 31 |  | $ | 369 |  |  | $ | 373 |  |  | $ | 394 |
The Company and certain of its subsidiaries are currently under examination by the relevant taxing authorities for various tax years. The Company regularly assesses the potential outcome of these examinations in each of the taxing jurisdictions when determining the adequacy of the amount of unrecognized tax benefit recorded. While it is often difficult to predict the final outcome or the timing of resolution of any particular uncertain tax position, we believe we have appropriately accrued for our uncertain tax benefits. However, audit outcomes and the timing of audit settlements and future events that would impact our previously recorded unrecognized tax benefits and the range of anticipated increases or decreases in unrecognized tax benefits are subject to significant uncertainty. It is possible that the ultimate outcome of current or future examinations may exceed our provision for current unrecognized tax benefits in amounts that could be material, but cannot be estimated as of December 31, 2016. Our effective tax rate and net income in any given future period could therefore be materially impacted.

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