INCOME TAXES

Income tax expense was $17 million and $116 million for the three and nine months ended September 30, 2015 compared to income tax expense of $26 million and $126 million in the same periods of 2014. For the three and nine months ended September 30, 2015, changes in the effective tax rate from the prior period include tax planning strategies made available in 2015 resulting in releases of tax valuation allowances. The following table summarizes the difference between income tax expense at the United States statutory rate of 35% and the income tax expense at effective worldwide tax rates for the respective periods:



	Three Months Ended September 30,						Nine Months Ended September 30,
Millions of dollars	2015			2014			2015			2014
Earnings before income taxes	$	267		$	261		$	749		$	710

Income tax expense computed at United States statutory tax rate	93			91			262			249
Valuation allowance release	(68		)	(25		)	(126		)	(38		)
U.S. foreign income items, net of credits	(18		)	(34		)	(32		)	(59		)
Foreign government tax incentive (including BEFIEX in 2014)	—			(10		)	(8		)	(20		)
Other	10			4			20			(6		)
Income tax expense computed at effective worldwide tax rates	$	17		$	26		$	116		$	126

At the end of each interim period, we make our best estimate of the effective tax rate expected to be applicable for the full fiscal year and the impact of discrete items, if any, and adjust the quarterly rate as necessary.