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Income Taxes | 9 Months Ended
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Sep. 30, 2018
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES Income tax expense was $7 million and $52 million for the three and nine months ended September 30, 2018, respectively, compared to income tax benefit of $4 million and expense of $69 million in the same periods of 2017. For the three and nine months ended September 30, 2018, changes in the effective tax rate from the prior period include lower earnings, U.S. tax reform impacts (including the reduction in U.S. tax rate from 35% to 21% and transition tax), the impact of non-deductible goodwill impairments and government payment accruals and recording of valuation allowances. The following table summarizes the difference between income tax expense (benefit) at the U.S. statutory rate of 21% and 35%, respectively, and the income tax expense (benefit) at effective worldwide tax rates for the respective periods:
|  | Three Months Ended September 30, |  | Nine Months Ended September 30,
Millions of dollars |  | 2018 |  | 2017 |  | 2018 |  | 2017
Earnings (loss) before income taxes |  | $ | 223 |  |  | $ | 268 |  |  | $ | (277 | ) |  | $ | 678 |
Income tax (benefit) expense computed at United States statutory tax rate |  | 47 |  |  | 94 |  |  | (58 | ) |  | 237 |
Valuation allowances (releases) |  | 4 |  |  | (84 | ) |  | 43 |  |  | (77 | )
U.S. transition tax |  | 78 |  |  | — |  |  | 78 |  |  | — |
U.S. foreign income items, net of credits |  | (108 | ) |  | (17 | ) |  | (146 | ) |  | (70 | )
Changes in enacted rates |  | (54 | ) |  | — |  |  | (54 | ) |  | — |
Non deductible impairments |  | — |  |  | — |  |  | 138 |  |  | — |
Non deductible government payments |  | — |  |  | — |  |  | 37 |  |  | — |
Other |  | 40 |  |  | 3 |  |  | 14 |  |  | (21 | )
Income tax (benefit) expense computed at effective worldwide tax rates |  | $ | 7 |  |  | $ | (4 | ) |  | $ | 52 |  |  | $ | 69 |
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. United States Government Tax Legislation On December 22, 2017, H.R.1 (the “Tax Cuts and Jobs Act”) was signed into law. Significant provisions include the reduction in the U.S. federal corporate income tax rate from 35% to 21%, the requirement for companies to pay a onetime transition tax on earnings of certain foreign subsidiaries that were previously tax deferred and the creation of new taxes on certain foreign sourced earnings. We are applying the guidance in SAB 118 when accounting for the enactment-date effects of the Tax Cuts and Jobs Act. At September 30, 2018, we have not completed our accounting for all of the tax effects of the Tax Cuts and Jobs Act. During the three months ended September 30, 2018, we recognized an additional $78 million of tax expense related to U.S. transition tax, increasing the total provisional amount to $268 million. During the same period, we made a $358 million contribution to our pension plan that resulted in a 2017 tax deduction at a 35% tax rate. As a result, we recognized an effective tax rate benefit in the current period largely attributable to the difference between the 35% and current enacted rate of 21%. We will continue to make and refine our calculations as additional analysis is completed. Our estimates may also be affected as we gain a more thorough understanding of the tax law and as interpretive guidance is issued by the U.S. government. These changes could have a material impact in future periods.

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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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