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9. Income Taxes | 9 Months Ended
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Sep. 30, 2018
Income Tax Disclosure [Abstract] |
Income Taxes | . INCOME TAXES Our effective income tax rate was 23% and 28% for the three months ended September 30, 2018 and 2017, respectively. Our effective income tax rate was 23% and 24% for the nine months ended September 30, 2018 and 2017, respectively. The effective tax rate for the three and nine months ended September 30, 2018 was driven primarily by the $318.0 million and $1.4 billion gain on equity investments, respectively, taxable at the U.S. federal and state rate of approximately 22%. The effective tax rate for the three and nine months ended September 30, 2017 was lower than the U.S. federal statutory rate of 35% due to the impact of discrete items. In accordance with SAB 118, our accounting for the following elements of the Tax Act was incomplete at December 31, 2017. However, we were able to make reasonable estimates of certain effects and, therefore, recorded provisional estimates as follows:
• | Our deferred tax assets and liabilities were remeasured at the enacted tax rate that will apply when these temporary differences are expected to be realized or settled.
• | The Tax Act imposes a Transition Tax payable over eight years. The Transition Tax is assessed on the U.S. shareholders’ share of certain foreign corporations’ accumulated untaxed foreign earnings. Earnings in the form of cash and cash equivalents are taxed at a rate of 15.5% and all other earnings are taxed at a rate of 8.0%. In December 2017, we recorded a provisional income tax expense of $55 million for Transition Tax.
• | For certain other elements of the Tax Act, our accounting was incomplete, and we were not able to make reasonable estimates of those effects. For example, we did not make a determination as to our accounting policy with respect to the new Global Intangible Low-Taxed Income ("GILTI").
During the quarter ended September 30, 2018, the Internal Revenue Service and U.S. Treasury issued proposed regulations related to Transition Tax and GILTI. While these regulations are not considered authoritative and are subject to change in the regulatory review process, they contain a number of rules that may impact us including but not limited to tax basis adjustment and anti-avoidance rules. We will continue our analysis of these provisional amounts including collecting necessary data during the measurement period, and record any adjustments to our provisional estimates in the fourth quarter. For the period ended September 30, 2018, we did not record adjustments to our provisional amounts. As regulatory guidance and interpretations become available, further adjustments may be necessary in future periods. We assess our ability to realize our net deferred tax assets on a quarterly basis and establish a valuation allowance if it is more-likely-than-not that some portion of the deferred tax assets will not be realized in the foreseeable future. Due to the weight of negative evidence, including our history of losses in certain jurisdictions, we believe that it is more-likely-than-not that certain foreign deferred tax assets will not be realized as of September 30, 2018. Accordingly, we have maintained a valuation allowance on such deferred tax assets. Our income tax returns are routinely audited by U.S. federal, state and foreign tax authorities. We are currently under examination by many of these tax authorities. There are differing interpretations of tax laws and regulations, and as a result, significant disputes may arise with these tax authorities involving issues of the timing and amount of deductions and allocations of income among various tax jurisdictions. We evaluate our exposures associated with our tax filing positions on a quarterly basis. We record liabilities for unrecognized tax benefits related to uncertain tax positions. We do not believe any currently pending uncertain tax positions will have a material adverse effect on our condensed consolidated financial statements, although an adverse resolution of one or more of these uncertain tax positions in any period may have a material impact on the results of operations for that period. As of September 30, 2018, based on the expected outcome of certain examinations or as a result of the expiration of statute of limitations for certain jurisdictions, we believe that within the next 12 months it is reasonably possible that our previously unrecognized tax benefits could decrease by up to $3 million. Substantially all such amounts will favorably impact our effective income tax rate.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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