Halliburton 2015 Annual Report Download - page 53

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36
Corporate and other expenses were $184 million in 2014 compared to $1.5 billion in 2013. The significant decrease
was primarily due to Macondo-related items. In 2013, we recorded a $1.0 billion increase to our loss contingency for the
Macondo well incident, while in 2014 we recorded a reduction of our loss contingency liability and an expected insurance
recovery totaling $195 million. We recorded $17 million of costs in 2014 related to the pending Baker Hughes acquisition and a
$55 million charge in 2013 related to a charitable contribution to the National Fish and Wildlife Foundation. See Note 9 to the
consolidated financial statements for further information regarding the Macondo well incident.
Impairments and other charges. Primarily as a result of the downturn in the energy market and its corresponding
impact on the company’s business outlook, we recorded a total of approximately $129 million in company-wide charges during
2014, which consisted of fixed asset impairments and write-offs, inventory write-downs, impairments of intangible assets,
severance costs, and other charges. See Note 3 to the consolidated financial statements for further information.
NONOPERATING ITEMS
Interest expense, net increased $52 million in 2014, compared to 2013, primarily due to higher interest expense as a
result of the issuance of $3.0 billion aggregate principal amount of senior notes in August 2013.
Effective tax rate. Our effective tax rate was 27.1% for 2014 and 23.5% for 2013. The effective tax rate for 2014 was
positively impacted by a $201 million net operating loss valuation allowance released as a result of a reorganization of our legal
entity structure in Brazil, as well as lower tax rates in certain foreign jurisdictions. Partially offsetting these items were tax
expenses related to Macondo items recorded during 2014, which was tax-effected at the United States statutory rate, as well as
total charges of approximately $150 million for a write-off of certain prepaid tax assets recorded in Iraq, additional tax
expenses related to the settlement of a research and development credit with the United States tax authorities, and tax expenses
related to other unrecognized tax benefits. Our effective tax rate for 2013 was also positively impacted by lower tax rates in
certain foreign jurisdictions; federal tax benefits of approximately $50 million due to the reinstatement of certain tax benefits
and credits related to the first quarter of 2013 enactment of the American Taxpayer Relief Act of 2012; and the tax impact
related to an increase of our Macondo-related loss contingency recorded during 2013, which was tax-effected at the United
States statutory rate. See Note 10 to the consolidated financial statements for further information regarding income taxes.