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 ("U.S."). 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 June 30,				Six Months Ended June 30,
In millions	2017		2016		2017		2016
Effective tax rate	(33.3	)%	24.7	%	(20.0	)%	55.0	%

For the three and six months ended June 30, 2017, no material non-recurring discrete tax items were recorded. Discrete tax items related to interest accruals on uncertain tax positions and equity based compensation resulted in income tax expense of $1 million, on a pre-tax net loss of $3 million and $5 million for the three and six months ended June 30 2017, causing a negative tax rate of (33.3)% and (20.0)% for the respective periods.

For the three months ended June 30, 2016, there was a $1.0 million favorable tax benefit recognized due to the release of a reserve taken for a previously uncertain tax position. For the six months ended June 30, 2016, there were discrete tax items resulting from the $76 million intangible asset impairment recorded in the first quarter of 2016, of which $57 million was related to non-deductible goodwill and $19 million was related to intangible assets for which $6 million of deferred tax benefit had been recorded. In addition, there was a $2 million favorable tax benefit recognized due to the release of a reserve taken for a previously uncertain tax position.