Income Taxes (Notes)

9 Months Ended

Sep. 30, 2015

Income Tax Disclosure [Abstract]

Income Taxes [Text Block]

Income Taxes

For interim income tax reporting we estimate our annual effective tax rate and apply it to our year to date ordinary income (loss). Tax jurisdictions with a projected or year to date loss for which a tax benefit cannot be realized are excluded. The tax effects of unusual or infrequently occurring items, including changes in judgment about valuation allowances and effects of changes in tax laws or rates, are reported in the interim period in which they occur.

In the three months ended September 30, 2015 income tax expense of $165 million resulted from tax expense attributable to entities included in our effective tax rate calculation of $608 million, partially offset by net favorable discrete adjustments related to tax settlements, a valuation allowance reversal and other items. In the three months ended September 30, 2014 income tax expense of $427 million resulted from tax expense attributable to entities included in our effective tax rate calculation of $787 million, partially offset by a net tax benefit from various tax settlements and other items.

In the nine months ended September 30, 2015 income tax expense of $1.3 billion resulted from tax expense attributable to entities included in our effective tax rate calculation of $1.9 billion, partially offset by net favorable discrete adjustments related to tax settlements, a valuation allowance reversal and other items. In the nine months ended September 30, 2014 income tax benefit of $51 million resulted from tax expense attributable to entities included in our effective tax rate calculation of $799 million, more than offset by a net tax benefit from various tax settlements and other items.

The $900 million charge recorded in the three months ended September 30, 2015 for the financial penalty under the DPA is not deductible for income tax purposes. Refer to Note 10 for additional information on the DPA.

At September 30, 2015 we had $33.2 billion of net deferred tax assets consisting of: (1) net operating losses and income tax credits; (2) capitalized research expenditures; and (3) other timing differences that are available to offset future income tax liabilities.