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Income Taxes
3 Months Ended
Jun. 30, 2016
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes
During the first quarters of 2017 and 2016, income tax expense related to continuing operations was $239 million and $256 million and included net discrete tax benefits of $35 million and $5 million. Our discrete tax benefits for the 2017 first quarter include a $37 million tax benefit related to the adoption of the amended accounting guidance on employee share-based compensation. Our reported income tax rates for the first quarters of 2017 and 2016 were 26.2% and 29.9%. The fluctuations in our reported income tax rates are primarily due to changes within our business mix, including varying proportions of income attributable to foreign countries that have lower income tax rates and discrete items.
As of June 30, 2016, we had $414 million of unrecognized tax benefits, of which $274 million would reduce income tax expense and the effective tax rate, if recognized. Based on the information currently available, we do not anticipate a significant increase or decrease to our unrecognized tax benefits within the next 12 months. However, this may change as we continue to have ongoing negotiations with various taxing authorities throughout the year.
We report interest and penalties on tax deficiencies as income tax expense. We recognized an income tax benefit of $3 million and tax expense of $6 million during the first quarters of 2017 and 2016, before any tax benefit, related to interest and penalties in our condensed consolidated statements of operations. At June 30, 2016 and 2015, before any tax benefits, our accrued interest and penalties on unrecognized tax benefits amounted to $49 million and $75 million.
We file income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions and various foreign jurisdictions. During the first quarter of 2017, we reached an agreement with the Internal Revenue Service (“IRS”) to settle all outstanding issues relating to the fiscal years 2007 through 2009. This settlement did not have a material impact on our provision for income taxes for the current quarter. We are subject to audit by the IRS for fiscal years 2010 through the current fiscal year. We are generally subject to audit by taxing authorities in various U.S. states and in foreign jurisdictions for fiscal years 2006 through the current fiscal year.