INCOME TAXES

Income tax expense was $90 million and $99 million for the three and six months ended June 30, 2015 compared to income tax expense of $50 million and $100 million in the same periods of 2014. For the three and six months ended June 30, 2015, changes in the effective tax rate from the prior period include tax planning strategies made available in the first quarter of 2015 resulting in releases of tax valuation allowances. The following table summarizes the difference between income tax expense at the United States statutory rate of 35% and the income tax expense at effective worldwide tax rates for the respective periods:



	Three Months Ended June 30,						Six Months Ended June 30,
Millions of dollars	2015			2014			2015			2014
Earnings before income taxes	$	275		$	235		$	482		$	449

Income tax expense computed at United States statutory tax rate	96			82			169			157
U.S. foreign income items, net of credits	(11		)	(13		)	(13		)	(25		)
Valuation allowance release	—			(13		)	(58		)	(13		)
Foreign government tax incentive (including BEFIEX in 2014)	(4		)	(5		)	(8		)	(11		)
Other	9			(1		)	9			(8		)
Income tax expense computed at effective worldwide tax rates	$	90		$	50		$	99		$	100

At the end of each interim period, we make our best estimate of the effective tax rate expected to be applicable for the full fiscal year and the impact of discrete items, if any, and adjust the quarterly rate as necessary.