INCOME TAXES	9 Months Ended
Sep. 30, 2018
Income Tax Disclosure [Abstract]
INCOME TAXES	NOTE 18—INCOME TAXES During the three months ended September 30, 2018, we recognized income tax expense of $44 million (effective tax rate of 99.5%), compared to tax expense of $19 million (effective tax rate of 16.8%) for the third quarter of 2017. During the nine months ended September 30, 2018, we recognized an income tax benefit of $19 million (effective tax rate of 30.7%), compared to tax expense of $53 million (effective tax rate of 25.4%) for the nine months ended September 30, 2017. Tax expense for the third quarter of 2018 was negatively impacted by losses in jurisdictions with no tax benefit ($41 million), partially offset by tax benefits related to research and development credits and other incentives ($7 million). Our provision for the nine months ended September 30, 2018 benefited from the tax effect ($117 million) of the taxable sale of low tax basis, pre-Combination McDermott assets to our new Technology entity which files its U.S. income taxes separately from pre-Combination McDermott, partially offset by non-deductible transaction costs ($16 million), losses in jurisdictions with no tax benefit ($60 million) and other items ($8 million). The pre-Combination McDermott operations utilized the discrete-period method to compute its interim tax provision, and continued to do so through June 30, 2018, due to significant variations in the relationship between income tax expense and pre-tax accounting income or loss. Consequently, the actual effective rate was reported for these operations through June 30, 2018. 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 through June 30, 2018. Beginning for the third quarter of 2018, we utilized 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 closing of the Combination in the second quarter of 2018, our unrecognized tax benefits increased $17 million. We do not anticipate significant changes to this balance in the next 12 months.

NOTE 18—INCOME TAXES

During the three months ended September 30, 2018, we recognized income tax expense of $44 million (effective tax rate of 99.5%), compared to tax expense of $19 million (effective tax rate of 16.8%) for the third quarter of 2017. During the nine months ended September 30, 2018, we recognized an income tax benefit of $19 million (effective tax rate of 30.7%), compared to tax expense of $53 million (effective tax rate of 25.4%) for the nine months ended September 30, 2017.

Tax expense for the third quarter of 2018 was negatively impacted by losses in jurisdictions with no tax benefit ($41 million), partially offset by tax benefits related to research and development credits and other incentives ($7 million). Our provision for the nine months ended September 30, 2018 benefited from the tax effect ($117 million) of the taxable sale of low tax basis, pre-Combination McDermott assets to our new Technology entity which files its U.S. income taxes separately from pre-Combination McDermott, partially offset by non-deductible transaction costs ($16 million), losses in jurisdictions with no tax benefit ($60 million) and other items ($8 million).

The pre-Combination McDermott operations utilized the discrete-period method to compute its interim tax provision, and continued to do so through June 30, 2018, due to significant variations in the relationship between income tax expense and pre-tax accounting income or loss. Consequently, the actual effective rate was reported for these operations through June 30, 2018. 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 through June 30, 2018. Beginning for the third quarter of 2018, we utilized 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 closing of the Combination in the second quarter of 2018, our unrecognized tax benefits increased $17 million. We do not anticipate significant changes to this balance in the next 12 months.