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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2016
Income Taxes |
Components of the provision (benefit) for income taxes | he components of our provision (benefit) for income taxes were as follows (in millions):
|  | Years ended December 31, |
|  | 2016 |  | 2015 |  | 2014 |
Current tax expense |  | $ | 39 |  | $ | 254 |  | $ | 286 |
Deferred tax expense (benefit) |  |  | 68 |  |  | (134) |  |  | (194) |
Income tax expense |  | $ | 107 |  | $ | 120 |  | $ | 92 |
Reconciliation of the differences between income tax expense computed at the Swiss holding company statutory rate and the reported provision for income taxes | The following is a reconciliation of the differences between the income tax expense for our continuing operations computed at the Swiss holding company federal statutory rate and our reported provision for income taxes (in millions, except statutory tax rate):
|  | Years ended December 31, |
|  | 2016 |  | 2015 |  | 2014 |
Income tax expense, calculated at the Swiss federal statutory rate of 7.83 percent |  | $ | 72 |  | $ | 80 |  | $ | (141) |
Taxes on earnings subject to rates different than the Swiss federal statutory rate |  |  | 34 |  |  | 36 |  |  | 91 |
Taxes on impairment losses subject to rates different than the Swiss federal statutory rate |  |  | 5 |  |  | (8) |  |  | 174 |
Taxes on revaluation of Norwegian assets |  |  | 18 |  |  | 14 |  |  | 5 |
Taxes on litigation matters subject to rates different than the Swiss federal statutory rate |  |  | (1) |  |  | (9) |  |  | 5 |
Changes in unrecognized tax benefits, net |  |  | (31) |  |  | 12 |  |  | (112) |
Change in valuation allowance |  |  | 32 |  |  | 10 |  |  | 93 |
Benefit from foreign tax credits |  |  | (16) |  |  | (10) |  |  | (23) |
Other, net |  |  | (6) |  |  | (5) |  |  | — |
Income tax expense |  | $ | 107 |  | $ | 120 |  | $ | 92 |
Significant components of deferred tax assets and liabilities | The significant components of our deferred tax assets and liabilities were as follows (in millions):
|  | December 31, |
|  | 2016 |  | 2015 |
Deferred tax assets |  |  |  |  |  |  |
Net operating loss carryforwards |  | $ | 383 |  | $ | 365 |
Tax credit carryforwards |  |  | 33 |  |  | 23 |
Accrued payroll expenses not currently deductible |  |  | 110 |  |  | 128 |
Deferred income |  |  | 122 |  |  | 138 |
Loss contingencies |  |  | 68 |  |  | 72 |
Professional fees |  |  | 3 |  |  | 2 |
United Kingdom charter limitation |  |  | 33 |  |  | 69 |
Other |  |  | 37 |  |  | 36 |
Valuation allowance |  |  | (412) |  |  | (380) |
Total deferred tax assets |  |  | 377 |  |  | 453 |
Deferred tax liabilities |  |  |  |  |  |  |
Depreciation and amortization |  |  | (239) |  |  | (251) |
Other |  |  | (18) |  |  | (20) |
Total deferred tax liabilities |  |  | (257) |  |  | (271) |
Net deferred tax assets |  | $ | 120 |  | $ | 182 |
Reconciliation of unrecognized tax benefits, excluding interest and penalties | The changes to our liabilities related to unrecognized tax benefits, excluding interest and penalties that we recognize as a component of income tax expense, were as follows (in millions):
|  | Years ended December 31, |
|  |  | 2016 |  |  | 2015 |  |  | 2014 |
Balance, beginning of period |  | $ | 287 |  | $ | 272 |  | $ | 331 |
Additions for current year tax positions |  |  | 42 |  |  | 36 |  |  | 27 |
Additions for prior year tax positions |  |  | 13 |  |  | 17 |  |  | 3 |
Reductions for prior year tax positions |  |  | (34) |  |  | (27) |  |  | (19) |
Settlements |  |  | (19) |  |  | (5) |  |  | (47) |
Reductions related to statute of limitation expirations |  |  | (15) |  |  | (6) |  |  | (23) |
Balance, end of period |  | $ | 274 |  | $ | 287 |  | $ | 272 |
Schedule of unrecognized tax benefits, including related interest and penalties | The liabilities related to our unrecognized tax benefits, including related interest and penalties that we recognize as a component of income tax expense, were as follows (in millions):
|  | December 31, |
|  |  | 2016 |  |  | 2015 |
Unrecognized tax benefits, excluding interest and penalties |  | $ | 274 |  | $ | 287 |
Interest and penalties |  |  | 96 |  |  | 118 |
Unrecognized tax benefits, including interest and penalties |  | $ | 370 |  | $ | 405 |

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- Definition Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years. + References Reference 1: 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 + Details
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- Definition Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets. + References Reference 1: 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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- Definition Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32687-109319 + Details
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- Definition Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions. + References Reference 1: 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 + Details
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