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Tax | 9 Months Ended
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Sep. 30, 2015
Income Tax Disclosure [Abstract] |
Tax |
9. | Tax
The effective tax rate for the three and nine months ended September 30, 2015 was 18.8% and 30.4%, respectively, compared to 28.8% and 30.3% for the same periods in 2014. Compared to the U.S. statutory rate, the effective tax rate was positively impacted in the periods by the effect of lower tax rates on income earned in foreign jurisdictions, and foreign exchange losses for tax reporting in Norway. The effective tax rate was negatively impacted by foreign dividends net of foreign tax credits, nondeductible expenses and a foreign audit settlement during the nine months ended September 30, 2015. Excluding discrete items, the effective tax rate for the three and nine months ended September 30, 2015 was 20.3% and 27.8%, respectively. The difference between the effective tax rate reflected in the provision for income taxes and the U.S. federal statutory rate of 35% was as follows (in millions):
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2015 |  |  | 2014 |  |  | 2015 |  |  | 2014 |
Federal income tax at U.S. federal statutory rate |  | $ | 67 |  |  | $ | 344 |  |  | $ | 380 |  |  | $ | 932 |
Foreign income tax rate differential |  |  | (30 | ) |  |  | (91 | ) |  |  | (117 | ) |  |  | (189 | )
State income tax, net of federal benefit |  |  | — |  |  |  | 8 |  |  |  | 3 |  |  |  | 23 |
Nondeductible expenses |  |  | — |  |  |  | 1 |  |  |  | 17 |  |  |  | 20 |
Tax benefit of manufacturing deduction |  |  | 7 |  |  |  | (13 | ) |  |  | (3 | ) |  |  | (31 | )
Foreign dividends, net of foreign tax credits |  |  | (1 | ) |  |  | 113 |  |  |  | 14 |  |  |  | 134 |
Tax impact of foreign exchange |  |  | (4 | ) |  |  | 16 |  |  |  | (22 | ) |  |  | 14 |
Change in valuation allowance |  |  | — |  |  |  | (94 | ) |  |  | — |  |  |  | (92 | )
Change in tax reserves |  |  | (2 | ) |  |  | — |  |  |  | 67 |  |  |  | — |
Other |  |  | (1 | ) |  |  | (1 | ) |  |  | (9 | ) |  |  | (5 | )
Provision for income taxes |  | $ | 36 |  |  | $ | 283 |  |  | $ | 330 |  |  | $ | 806 |
The balance of unrecognized tax benefits at September 30, 2015 was $113 million, $40 million of which if ultimately realized, would be recorded as an income tax benefit. Included in the change in the balance of unrecognized tax benefits is an uncertain tax position identified in a foreign jurisdiction totaling $69 million, of which the Company has settled and paid $69 million as of September 30, 2015. The Company does not anticipate that its total unrecognized tax benefits at September 30, 2015 will significantly change due to the settlement of audits or the expiration of statutes of limitation within 12 months of this reporting date. The Company is subject to taxation in the U.S., various states and foreign jurisdictions. The Company has significant operations in the United States, Canada, the United Kingdom, the Netherlands and Norway. Tax years that remain subject to examination by major tax jurisdiction vary by legal entity, but are generally open in the U.S. for tax years after 2009 and outside the U.S. for tax years after 2007. To the extent penalties and interest would be assessed on any underpayment of income tax, such accrued amounts have been classified as a component of income tax expense in the financial statements.

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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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 + Details
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