Income Taxes

Income tax provisions for interim periods are based on estimated annual income tax rates, adjusted to reflect the effects of any significant infrequent or unusual items which are required to be discretely recognized within the current interim period. The Company’s intention is to permanently reinvest its foreign earnings outside of the United States. As a result, the effective tax rates in the periods presented are largely based upon the forecasted pre-tax earnings mix and allocation of certain expenses in various taxing jurisdictions where the Company conducts its business that apply a broad range of statutory income tax rates, a large majority of which are less than the U.S. statutory rate.

The effective tax rate is as follows:



	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2016		2015		2016		2015
Effective tax rate	45.6	%	29.1	%	48.5	%	(51.4	)%

For the three months ended September 30, 2016, there was a $22 million discrete tax expense related to the sale of the marketing applications business that occurred on July 1, 2016. For the three months ended September 30, 2015, there were no material discrete tax items. The increase in the effective tax rate was driven by the discrete tax impact from the sale of the marketing applications business.

For the nine months ended September 30, 2016, there were discrete tax items resulting from the $76 million impairment recorded in the first quarter, of which $57 million is related to non-deductible goodwill and $19 million is related to intangible assets for which $6 million of deferred tax benefit has been recorded, as well as the $22 million discrete tax impact from the sale of the marketing applications business recognized in the third quarter.

For the nine months ended September 30, 2015, the effective tax rate included a discrete tax item resulting from the $340 million goodwill impairment recorded in the second quarter, of which $318 million related to non-deductible goodwill and $22 million was for tax deductible goodwill for which $8 million of deferred tax benefit has been recorded. The increase in the effective tax rate was primarily driven by the differential in the discrete tax impact of the goodwill impairment period over period and the tax impact from the sale of the marketing applications business recorded in the third quarter of 2016.