Income Taxes

6 Months Ended

Jun. 30, 2019

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

Our effective tax rate increased to 26.2 percent for the 2019 second quarter from 23.6 percent for the 2018 second quarter, primarily due to the unfavorable impact of the non-tax deductible accrual for the Proposed ICO Fine discussed in Footnote 6. Commitments and Contingencies. The increase was partially offset by a shift in earnings to jurisdictions with lower tax rates and prior year tax expenses for dispositions.

Our effective tax rate decreased to 18.7 percent for the 2019 first half from 22.6 percent for the 2018 first half, primarily due to the prior year tax expense incurred for uncertain tax positions relating to legacy-Starwood operations, the prior year state income tax expense due to a change in our position regarding the future remittance of accumulated earnings of non-U.S. subsidiaries, prior year tax expenses for dispositions, and a shift in earnings to jurisdictions with lower tax rates. The decrease was partially offset by the 2018 release of tax reserves due to the completion of certain examinations and the unfavorable impact in the 2019 second quarter of the non-tax deductible accrual for the loss contingency related to the Proposed ICO Fine discussed in Footnote 6. Commitments and Contingencies.

We paid cash for income taxes, net of refunds, of $241 million in the 2019 first half and $489 million in the 2018 first half.