6. Income Tax

The effective tax rate for the three months ended March 31, 2014 was 33.8%, compared to 31.7% for the same period in 2013. Compared to the U.S. statutory rate, the effective tax rate was favorably impacted in the periods by the effect of lower tax rates on income earned in foreign jurisdictions which are permanently reinvested.

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 March 31,
	2014			2013
Federal income tax at U.S. federal statutory rate	$	22		$	21
Foreign income tax rate differential		(2	)		(2	)
State income tax, net of federal benefit		1			1
Other		—			(1	)

Provision for income taxes	$	21		$	19

The Company is subject to taxation in the United States, various states and foreign jurisdictions. The Company has significant operations in the United States, Canada, the United Kingdom, Indonesia, and Norway. Tax years that remain subject to examination by major tax jurisdictions vary by legal entity, but are generally open in the U.S. for the tax years ending after 2007 and outside the U.S. for the tax years ending after 2006.

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.