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Tax | 9 Months Ended
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Sep. 30, 2016
Income Tax Disclosure [Abstract] |
Tax | 8. Tax The effective tax rate for the three and nine months ended September 30, 2016 was (9.6)% and 6.5%, respectively, compared to 18.8% and 30.4% for the same periods in 2015. Impairment of goodwill not deductible for tax purposes, lower tax rates on losses incurred in foreign jurisdictions, and an increase in valuation allowance on deferred taxes, which, when applied to losses generated during the nine-month period resulted in a lower effective tax rate than the U.S. statutory rate. Included in the increase in valuation allowance is $213 million recorded against excess foreign tax credits that are not expected to be realized before expiration. The lower effective tax rate was partially offset by benefits from foreign dividends net of foreign tax credits. 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, |
|  | 2016 |  |  | 2015 |  |  | 2016 |  |  | 2015 |
Federal income tax at U.S. federal statutory rate |  | $ | (436 | ) |  | $ | 67 |  |  | $ | (637 | ) |  | $ | 380 |
Foreign income tax rate differential |  |  | 38 |  |  |  | (30 | ) |  |  | 14 |  |  |  | (117 | )
Nondeductible expenses |  |  | 2 |  |  |  | — |  |  |  | 23 |  |  |  | 17 |
Foreign dividends, net of foreign tax credits |  |  | (28 | ) |  |  | (1 | ) |  |  | (47 | ) |  |  | 14 |
Tax impact of foreign exchange |  |  | 9 |  |  |  | (4 | ) |  |  | 2 |  |  |  | (22 | )
Change in valuation allowance |  |  | 238 |  |  |  | — |  |  |  | 259 |  |  |  | — |
Goodwill impairment |  |  | 273 |  |  |  | — |  |  |  | 273 |  |  |  | — |
Tax rate change on temporary differences |  |  | (2 | ) |  |  | 1 |  |  |  | (5 | ) |  |  | (2 | )
Change in tax reserves |  |  | 39 |  |  |  | (2 | ) |  |  | 19 |  |  |  | 67 |
Other |  |  | (13 | ) |  |  | 5 |  |  |  | (20 | ) |  |  | (7 | )
Provision for income taxes |  | $ | 120 |  |  | $ | 36 |  |  | $ | (119 | ) |  | $ | 330 |
The balance of unrecognized tax benefits at September 30, 2016 was $66 million. The Company does not anticipate its total unrecognized tax benefits at September 30, 2016 to significantly change due to the settlement of audits or the expiration of statutes of limitation within 12 months of this reporting date. For the three and nine months ended September 30, 2016, the Company is utilizing the discrete-period method to compute its interim tax provision due to significant variations in the relationship between income tax expense and pre-tax accounting income or loss; consequently, the actual effective rate for the interim period is being reported. The discrete-period method is applied when the application of the estimated annual effective tax rate is impractical because it is not possible to reliably estimate the annual effective tax rate. For the three and nine months ended September 30, 2015, the Company utilized the estimated annual effective tax rate method in computing its interim tax provisions. The relationship between pre-tax accounting income and income tax for these periods allowed the Company to estimate the annual effective tax rate to be applied to year-to-date income in those periods. On January 1, 2016, the Company adopted Accounting Standard Update No. 2015-17, “Balance Sheet Classification of Deferred Taxes” on a retrospective basis. Rather than classify deferred tax assets and liabilities as current and non-current, this update requires that deferred tax assets and liabilities be classified as non-current in the Consolidated Balance Sheet. Adoption of this standard resulted in a reclassification of our current deferred tax assets and liabilities to non-current deferred tax assets and liabilities in our Consolidated Balance Sheet. Prior periods have been retrospectively adjusted. At December 31, 2015, $376 million of current deferred tax assets have been reclassified to non-current deferred tax liabilities, $358 million of non-current deferred tax assets have been reclassified to non-current deferred tax liabilities, and $291 million of current deferred tax liabilities have been reclassified to non-current deferred tax liabilities.

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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=65882285&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=65882285&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=65882285&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=65882285&loc=d3e32537-109319 + Details
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