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Baker Hughes Incorporated
Notes to Consolidated Financial Statements
67
The following table presents the changes in our gross unrecognized tax benefits and associated interest and
penalties included in the consolidated balance sheets.
Gross Unrecognized
Tax
Benefits, Excluding
Interest and Penalties Interest and
Penalties
Total Gross
Unrecognized Tax
Benefits
Balance at December 31, 2012 $ 196 $ 71 $ 267
Increase (decrease) in prior year tax positions 20 (2) 18
Increase in current year tax positions 44 1 45
Decrease related to settlements with taxing authorities (15) (4) (19)
Decrease related to lapse of statute of limitations (17) (10) (27)
Decrease due to effects of foreign currency translation — (2) (2)
Balance at December 31, 2013 228 54 282
(Decrease) increase in prior year tax positions (7) 1 (6)
Increase in current year tax positions 39 2 41
Decrease related to settlements with taxing authorities (5) (1) (6)
Decrease related to lapse of statute of limitations (6) (3) (9)
Decrease due to effects of foreign currency translation (7) (4) (11)
Balance at December 31, 2014 242 49 291
Increase in prior year tax positions 19 15 34
Increase in current year tax positions 26 1 27
Decrease related to settlements with taxing authorities (8) (2) (10)
Decrease related to lapse of statute of limitations (11) (7) (18)
Decrease due to effects of foreign currency translation (8) (4) (12)
Balance at December 31, 2015 $ 260 $ 52 $ 312
It is expected that the amount of unrecognized tax benefits will change in the next twelve months due to
expiring statutes, audit activity, tax payments, competent authority proceedings related to transfer pricing or final
decisions in matters that are the subject of litigation in various taxing jurisdictions in which we operate. At
December 31, 2015, we had approximately $80 million of tax liabilities, net of $13 million of tax assets, related to
uncertain tax positions, each of which are individually insignificant, and each of which are reasonably possible of
being settled within the next twelve months.
At December 31, 2015, approximately $219 million of tax liabilities for total gross unrecognized tax benefits
were included in the noncurrent portion of our income tax liabilities, for which the settlement period cannot be
determined; however, it is not expected to be within the next twelve months.
We operate in more than 80 countries and are subject to income taxes in most taxing jurisdictions in which we
operate. The following table summarizes the earliest tax years that remain subject to examination by the major
taxing jurisdictions in which we operate. In addition to the U.S., we include foreign jurisdictions that we project to
have the highest tax liability for 2016.
Jurisdiction Earliest Open Tax Period Jurisdiction Earliest Open Tax Period
Argentina 2008 Norway 2005
Ecuador 2012 Saudi Arabia 2004
Netherlands 2010 U.S. 2010