Income Taxes

9 Months Ended

Sep. 30, 2017

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

	Quarter ended						Year to date
	2017			2016			2017			2016
Income tax provision	$	106		$	83		$	278		$	263
Effective tax rate	20.2		%	27.5		%	23.5		%	27.0		%

Our effective tax rate is lower than the U.S. federal statutory rate of 35% primarily due to the majority of our income being earned outside the U.S. where tax rates are generally lower than the U.S. rate.

Our third quarter and year to date effective tax rates were lower than the prior year primarily due to the inclusion of approximately $40 million and $100 million of excess tax benefits on share-based payments for the quarter and year to date ended September 30, 2017, respectively. See Note 1 for discussion related to the adoption of a new accounting standard on share-based payments in the quarter ended March 31, 2017. These excess benefits were largely associated with the deferred compensation payouts to recently retired employees. Our effective tax rates were also favorably impacted by previously recorded pre-tax losses for which we were able to recognize a tax benefit in the quarter ended September 30, 2017 as a result of an international refranchising transaction. These favorable impacts were partially offset by the unfavorable impacts of the repatriation of foreign earnings and our planned, full year 2017 refranchising gains, which will largely be taxed at the U.S. rate.