United states securities and exchange commission

As a result of the Merger and subsequent change in ownership, certain net operating loss carryforwards available for Dow's consolidated German tax group were derecognized. In addition, the sale of stock between two Dow consolidated subsidiaries in 2014 created a gain that was initially deferred for tax purposes. This deferred gain became taxable as a result of activities executed in anticipation of the Intended Business Separations. As a result, in 2017, the Company decreased “Deferred income tax assets” in the consolidated balance sheets and recorded a charge to “Provision (Credit) for income taxes on continuing operations” in the consolidated statements of income of $267 million .

Operating Loss and Tax Credit Carryforwards		Deferred Tax Asset
In millions		2017			2016
Operating loss carryforwards
Expire within 5 years 1		$	288		$	176
Expire after 5 years or indefinite expiration 1		2,788			1,346
Total operating loss carryforwards		$	3,076		$	1,522
Tax credit carryforwards
Expire within 5 years		$	49		$	28
Expire after 5 years or indefinite expiration		300			900
Total tax credit carryforwards		$	349		$	928
Total Operating Loss and Tax Credit Carryforwards		$	3,425		$	2,450
1.	Prior year was adjusted to conform with the current year presentation.

Undistributed earnings of foreign subsidiaries and related companies that are deemed to be permanently invested amounted to $22,460 million at December 31, 2017 and $18,668 million at December 31, 2016 . The Act imposed U.S. tax on all foreign unrepatriated earnings. These undistributed earnings are still subject to certain taxes upon repatriation, primarily where foreign withholding taxes apply. It is not practicable to calculate the unrecognized deferred tax liability on undistributed earnings.

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The following table provides a reconciliation of the Company's unrecognized tax benefits:

Total Gross Unrecognized Tax Benefits
In millions			2017			2016			2015
Total unrecognized tax benefits at Jan 1			$	231		$	280		$	240
Decreases related to positions taken on items from prior years			(6		)	(12		)	(6		)
Increases related to positions taken on items from prior years 1			46			153			92
Increases related to positions taken in the current year 2			465			135			10
Settlement of uncertain tax positions with tax authorities 1			(11		)	(325		)	(56		)
Decreases due to expiration of statutes of limitations			(14		)	—			—
Exchange loss			1			—			—
Total unrecognized tax benefits at Dec 31			$	712		$	231		$	280
Total unrecognized tax benefits that, if recognized, would impact the effective tax rate			$	319		$	223		$	206
Total amount of interest and penalties (benefit) recognized in "Provision (Credit) for income taxes on continuing operations"			$	3		$	(55	)	$	80
Total accrual for interest and penalties associated with unrecognized tax benefits			$	135		$	89		$	178
1.	The 2016 balance includes the impact of a settlement agreement related to a historical change in the legal ownership structure of a nonconsolidated affiliate discussed below.
2.		The 2017 balance includes $436 million assumed in the Merger. The 2016 balance includes $126 million assumed in the DCC Transaction.

On January 9, 2017, the U.S. Supreme Court denied certiorari in Dow’s tax treatment of partnerships and transactions associated with Chemtech, a wholly owned subsidiary of Dow. Dow has fully accrued the position and does not expect a future impact to “Provision (Credit) for income taxes on continuing operations” in the consolidated statements of income as a result of the ruling. 

In the fourth quarter of 2016, a settlement of $206 million was reached on a tax matter associated with a historical change in the legal ownership structure of a nonconsolidated affiliate of Dow. As a result of the settlement, Dow recorded a net decrease in uncertain tax positions of $67 million , included in “Other noncurrent obligations” in the consolidated balance sheets, and an unfavorable impact of $13 million to “Provision (Credit) for income taxes on continuing operations” in the consolidated statements of income.
Each year Dow, DuPont and/or the Company file tax returns in the various national, state and local income taxing jurisdictions in which it operates. These tax returns are subject to examination and possible challenge by the tax authorities. Positions challenged by the tax authorities may be settled or appealed by the Company. As a result, there is an uncertainty in income taxes recognized in the Company’s financial statements in accordance with accounting for income taxes and accounting for uncertainty in income taxes. The impact on the Company’s results of operations is not expected to be material.
Tax years that remain subject to examination for the Company’s major tax jurisdictions are shown below:

Tax Years Subject to Examination by Major Tax Jurisdiction at Dec 31, 2017	Earliest Open Year
Jurisdiction
Argentina	2010
Brazil	2007
Canada	2011
China	2007
Denmark	2003
Germany	2006
India	2001
Italy	2012
The Netherlands	2014
Switzerland	2012
United States:
Federal income tax	2004
State and local income tax	2004

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NOTE 9 - EARNINGS PER SHARE CALCULATIONS

The following tables provide earnings per share calculations for the years ended December 31, 2017 , 2016 , and 2015 :

Net Income for Earnings Per Share Calculations - Basic	2017			2016			2015
In millions
Income from continuing operations, net of tax	$	1,669		$	4,404		$	7,783
Net income attributable to noncontrolling interests	(132		)	(86		)	(98		)
Preferred stock dividends 1	—			(340		)	(340		)
Net income attributable to participating securities 2	(13		)	(22		)	(51		)
Income from continuing operations attributable to common stockholders	$	1,524		$	3,956		$	7,294
Loss from discontinued operations, net of tax	(77		)	—			—
Net income attributable to common stockholders	$	1,447		$	3,956		$	7,294

Earnings Per Share Calculations - Basic	2017			2016			2015
Dollars per share
Income from continuing operations attributable to common stockholders	$	0.97		$	3.57		$	6.45
Loss from discontinued operations, net of tax	(0.05		)	—			—
Net income attributable to common stockholders	$	0.92		$	3.57		$	6.45