INCOME TAXES	6 Months Ended
Jun. 30, 2018
Income Tax Disclosure [Abstract]
INCOME TAXES	NOTE 17—INCOME TAXES During the three months ended June 30, 2018, we recognized an income tax benefit of $84 million (effective tax rate of 215.4%), compared to tax expense of $23 million (effective tax rate of 38.3%) for the second quarter of 2017. Our provision for the second quarter of 2018 benefited from the release of a valuation allowance ($117 million) as a result of the taxable sale of low tax basis, pre-Combination McDermott assets to our new Technology entity that files its U.S. income taxes separately from pre-Combination McDermott. The pre-Combination McDermott U.S. net operating loss carryforwards utilized by this transaction previously had been offset by a valuation allowance. This benefit was partially offset by non-deductible transaction costs ($16 million), changes in other valuation allowances ($12 million) and state tax and other items ($15 million combined). During the six months ended June 30, 2018, we recognized an income tax benefit of $63 million (effective tax rate of 393.8%), compared to tax expense of $34 million (effective tax rate of 35.4%) for the six months ended June 30, 2017. Our provision for the six months ended June 30, 2018 benefited from the tax effect ($117 million) of the sale described above, partially offset by non-deductible transaction costs ($16 million), changes in valuation allowances ($19 million) and state tax and other items ($15 million combined). For the three-months ended June 30, 2018, the pre-Combination McDermott operations continued to utilize the discrete-period method to compute its interim tax provision, due to significant variations in the relationship between income tax expense and pre-tax accounting income or loss; consequently, the actual effective rate for the interim period is reported. The discrete-period method is applied when the application of the estimated annual effective tax rate is impractical, because it is not possible to reliably estimate the annual effective tax rate. The pre-Combination CB&I operations used the estimated annual effective tax rate approach to calculate its interim tax provision related to ordinary income and continued to use this method for the three months ended June 30, 2018. We are currently assessing the timeframe and process to implement an estimated annual effective tax rate approach on a combined company basis. Due to the impact of ongoing tax losses in the U.S. and the corresponding valuation allowance on our U.S. net deferred tax asset position, the new provisions from the Tax Reform Act taking effect in 2018 are not expected to have a material impact on our 2018 tax position. See Note 2, Basis of Presentation and Significant Accounting Policies, for further discussion. As a result of the Combination, our unrecognized tax benefits increased $17 million during the second quarter of 2018. We do not anticipate significant changes to this balance in the next twelve months.

NOTE 17—INCOME TAXES

During the three months ended June 30, 2018, we recognized an income tax benefit of $84 million (effective tax rate of 215.4%), compared to tax expense of $23 million (effective tax rate of 38.3%) for the second quarter of 2017. Our provision for the second quarter of 2018 benefited from the release of a valuation allowance ($117 million) as a result of the taxable sale of low tax basis, pre-Combination McDermott assets to our new Technology entity that files its U.S. income taxes separately from pre-Combination McDermott. The pre-Combination McDermott U.S. net operating loss carryforwards utilized by this transaction previously had been offset by a valuation allowance. This benefit was partially offset by non-deductible transaction costs ($16 million), changes in other valuation allowances ($12 million) and state tax and other items ($15 million combined).

During the six months ended June 30, 2018, we recognized an income tax benefit of $63 million (effective tax rate of 393.8%), compared to tax expense of $34 million (effective tax rate of 35.4%) for the six months ended June 30, 2017. Our provision for the six months ended June 30, 2018 benefited from the tax effect ($117 million) of the sale described above, partially offset by non-deductible transaction costs ($16 million), changes in valuation allowances ($19 million) and state tax and other items ($15 million combined).

For the three-months ended June 30, 2018, the pre-Combination McDermott operations continued to utilize the discrete-period method to compute its interim tax provision, due to significant variations in the relationship between income tax expense and pre-tax accounting income or loss; consequently, the actual effective rate for the interim period is reported. The discrete-period method is applied when the application of the estimated annual effective tax rate is impractical, because it is not possible to reliably estimate the annual effective tax rate. The pre-Combination CB&I operations used the estimated annual effective tax rate approach to calculate its interim tax provision related to ordinary income and continued to use this method for the three months ended June 30, 2018. We are currently assessing the timeframe and process to implement an estimated annual effective tax rate approach on a combined company basis.

Due to the impact of ongoing tax losses in the U.S. and the corresponding valuation allowance on our U.S. net deferred tax asset position, the new provisions from the Tax Reform Act taking effect in 2018 are not expected to have a material impact on our 2018 tax position. See Note 2, Basis of Presentation and Significant Accounting Policies, for further discussion.

As a result of the Combination, our unrecognized tax benefits increased $17 million during the second quarter of 2018. We do not anticipate significant changes to this balance in the next twelve months.