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Income Taxes | 12 Months Ended
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Dec. 31, 2016
Income Tax Disclosure [Abstract] |
Income Taxes | 14. Income Taxes The domestic and foreign components of income before income taxes were as follows (in millions):
|  | Years Ended December 31, |
|  | 2016 |  |  | 2015 |  |  | 2014 |
Domestic |  | $ | (2,095 | ) |  | $ | (1,577 | ) |  | $ | 1,415 |
Foreign |  |  | (528 | ) |  |  | 988 |  |  |  | 2,079 |
|  | $ | (2,623 | ) |  | $ | (589 | ) |  | $ | 3,494 |
The components of the provision for income taxes consisted of (in millions):
|  | Years Ended December 31, |
|  | 2016 |  |  | 2015 |  |  | 2014 |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | (79 | ) |  | $ | 30 |  |  | $ | 681 |
State |  |  | (4 | ) |  |  | (58 | ) |  |  | 43 |
Foreign |  |  | 74 |  |  |  | 464 |  |  |  | 615 |
Total current income tax provision |  |  | (9 | ) |  |  | 436 |  |  |  | 1,339 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | (132 | ) |  |  | (41 | ) |  |  | (309 | )
State |  |  | (7 | ) |  |  | (38 | ) |  |  | (5 | )
Foreign |  |  | (59 | ) |  |  | (179 | ) |  |  | 14 |
Total deferred income tax benefit |  |  | (198 | ) |  |  | (258 | ) |  |  | (300 | )
Total income tax provision |  | $ | (207 | ) |  | $ | 178 |  |  | $ | 1,039 |
The difference between the effective tax rate reflected in the provision for income taxes and the U.S. federal statutory rate was as follows (in millions):
|  | Years Ended December 31, |
|  | 2016 |  |  | 2015 |  |  | 2014 |
Federal income tax at U.S. statutory rate |  | $ | (918 | ) |  | $ | (206 | ) |  | $ | 1,223 |
Foreign income tax rate differential |  |  | 32 |  |  |  | (110 | ) |  |  | (261 | )
Goodwill impairment |  |  | 271 |  |  |  | 462 |  |  |  | — |
Nondeductible expenses |  |  | 30 |  |  |  | 66 |  |  |  | 24 |
Foreign dividends, net of foreign tax credits |  |  | (25 | ) |  |  | 28 |  |  |  | 132 |
Tax rate change on timing differences |  |  | (8 | ) |  |  | (45 | ) |  |  | (2 | )
Change in tax reserve |  |  | 11 |  |  |  | 69 |  |  |  | (11 | )
Prior years taxes |  |  | (29 | ) |  |  | (47 | ) |  |  | (11 | )
Tax impact on foreign exchange |  |  | (4 | ) |  |  | (46 | ) |  |  | 28 |
Change in deferred tax valuation allowance |  |  | 476 |  |  |  | 15 |  |  |  | (83 | )
Other |  |  | (43 | ) |  |  | (8 | ) |  |  | — |
Total income tax provision |  | $ | (207 | ) |  | $ | 178 |  |  | $ | 1,039 |
The effective tax rate for the year ended December 31, 2016 was 7.9%, compared to (30.2)% for 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 period, resulted in a lower effective tax rate than the U.S. statutory rate. Included in the increase in valuation allowance is $404 million recorded against excess foreign tax credits that are not expected to be realized before expiration in the current depressed market conditions. Significant components of our deferred tax assets and liabilities were as follows (in millions):
|  | December 31, |
|  | 2016 |  |  | 2015 |
Deferred tax assets: |  |  |  |  |  |  |  |
Allowances and operating liabilities |  | $ | 534 |  |  | $ | 491 |
Net operating loss carryforwards |  |  | 153 |  |  |  | 170 |
Postretirement benefits |  |  | 60 |  |  |  | 79 |
Tax credit carryforwards |  |  | 405 |  |  |  | 166 |
Other |  |  | 164 |  |  |  | 21 |
Valuation allowance |  |  | (544 | ) |  |  | (63 | )
Total deferred tax assets |  |  | 772 |  |  |  | 864 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Tax over book depreciation |  |  | 267 |  |  |  | 277 |
Intangible assets |  |  | 1,148 |  |  |  | 1,323 |
Deferred income |  |  | 185 |  |  |  | 232 |
Accrued U.S. tax on unremitted earnings |  |  | 53 |  |  |  | 55 |
Other |  |  | 97 |  |  |  | 209 |
Total deferred tax liabilities |  |  | 1,750 |  |  |  | 2,096 |
Net deferred tax liability |  | $ | 978 |  |  | $ | 1,232 |
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-currentin 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. The balance of unrecognized tax benefits at December 31, 2016 and 2015 was $78 million and $46 million, respectively. For the year ended December 31, 2015 a $69 million uncertain tax position was identified in a foreign jurisdiction that was included as an increase and settlement during the year and the completion of audits in foreign jurisdictions resulted in a $75 million decrease in uncertain tax positions. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in millions):
|  | 2016 |  |  | 2015 |  |  | 2014 |
Unrecognized tax benefit at beginning of year |  | $ | 46 |  |  | $ | 115 |  |  | $ | 127 |
Gross increase for current period tax positions |  |  | 3 |  |  |  | 8 |  |  |  | 3 |
Gross increase for tax positions in prior years |  |  | 65 |  |  |  | 75 |  |  |  | — |
Gross decrease for tax positions in prior years |  |  | (21 | ) |  |  | (75 | ) |  |  | — |
Settlements |  |  | (3 | ) |  |  | (69 | ) |  |  | — |
Lapse of statute of limitations |  |  | (12 | ) |  |  | (8 | ) |  |  | (15 | )
Unrecognized tax benefit at end of year |  | $ | 78 |  |  | $ | 46 |  |  | $ | 115 |
Substantially all of the unrecognized tax benefits, if ultimately realized, would be recorded as a benefit to the effective tax rate. The Company anticipates that it is reasonably possible that the amount of unrecognized tax benefits may decrease by up to $15 million in the next twelve months due to settlements and conclusions of tax examinations. 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 consistent with the Company’s policy. For the years ended December 31, 2016, 2015 and 2014, we recorded income tax expense of $10 million, $1 million and $1 million, respectively, for interest and penalty related to unrecognized tax benefits. As of December 31, 2016 and 2015, the Company had accrued $15 million and $5 million, respectively, of interest and penalty relating to unrecognized tax benefits. The Company is subject to taxation in the United States, various states and foreign jurisdictions. The Company has significant operations in the United States, Norway, Canada, the United Kingdom, the Netherlands, France and Denmark. Tax years that remain subject to examination by major tax jurisdictions vary by legal entity, but are generally open in the U.S. for tax years ending after 2012 and outside the U.S. for tax years ending after 2010. Net operating loss carryforwards by jurisdiction and expiration as of December 31, 2016 were as follows (in millions):
|  | Federal |  |  | State |  |  | Foreign |  |  | Total |
2017 - 2021 Expiration |  | $ | 8 |  |  | $ | 1 |  |  | $ | 78 |  |  | $ | 87 |
2022 - 2033 Expiration |  |  | 16 |  |  |  | 14 |  |  |  | 102 |  |  |  | 132 |
2034 - 2036 Expiration |  |  | — |  |  |  | 154 |  |  |  | 65 |  |  |  | 219 |
Unlimited Expiration |  |  | — |  |  |  | — |  |  |  | 261 |  |  |  | 261 |
Total Net Operating Loss (NOL) |  | $ | 24 |  |  | $ | 169 |  |  | $ | 506 |  |  | $ | 699 |
Tax Effected NOL |  | $ | 8 |  |  | $ | 9 |  |  | $ | 136 |  |  | $ | 153 |
Valuation Allowance (VA) |  |  | (7 | ) |  |  | (1 | ) |  |  | (112 | ) |  |  | (120 | )
NOL Net of VA |  | $ | 1 |  |  | $ | 8 |  |  | $ | 24 |  |  | $ | 33 |
The Company has $404 million of excess foreign tax credits in the United States as of December 31, 2016, of which $11 million, $141 million and $252 million will expire in 2020, 2022 and 2026, respectively. As of December 31, 2016 the Company has remaining tax deductible goodwill of $175 million, resulting from acquisitions. The amortization of this goodwill is deductible over various periods ranging up to 15 years. Undistributed earnings of certain of the Company’s foreign subsidiaries amounted to $5,673 million at December 31, 2016. Those earnings are considered to be indefinitely reinvested and no provision for U.S. federal and state income taxes has been made. Distribution of these earnings in the form of dividends or otherwise could result in U.S. federal taxes (subject to an adjustment for foreign tax credits) and withholding taxes payable in various foreign countries. Determination of the amount of unrecognized deferred U.S. income tax liability is not practical; however, unrecognized foreign tax credit carryforwards would be available to reduce some portion of the U.S. liability.

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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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