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Income Taxes
9 Months Ended
Sep. 30, 2017
Income Tax Disclosure [Abstract]  
Income Taxes
INCOME TAXES
Income tax expense was $93 million for the three months ended September 30, 2017 compared to $70 million for the prior year quarter. The increase was primarily attributable to BHGE not recognizing a tax benefit on its share of U.S. losses since we have recorded valuation allowances against our U.S. tax assets, including net operating losses and foreign tax credit carryforwards. Consequently, the $93 million of income tax expense is primarily attributable to non-U.S. taxes related to our foreign subsidiaries. The positive impact of foreign tax rates lower than the U.S. rate of 35% is offset by adjustments to prior estimates, increased valuation allowances and withholding taxes. The prior year quarter reflects 100% of the taxes associated with U.S. and non-U.S. earnings of the GE O&G business.
For the nine months ended September 30, 2017, income tax expense was $122 million compared to income tax expense of $132 million for the first nine months of 2016. The $10 million net decrease in tax expense is due to a decrease in income before taxes offset by valuation allowances recorded against our share of U.S. net operating losses and other tax assets, including foreign tax credit carryforwards. The positive impact of foreign tax rates lower than the U.S. rate of 35% is offset by adjustments to prior estimates, increased valuation allowances and withholding taxes. The prior year nine months reflects 100% of the taxes associated with U.S. and non-U.S. earnings of the historic GE O&G business.