Annual report pursuant to Section 13 and 15(d)

INCOME TAXES (Tables)

v3.6.0.2
INCOME TAXES (Tables)
 12 Months Ended
Dec. 31, 2016
Income Tax Disclosure [Abstract]  
Income Tax Expense Benefit
The income tax expense (benefit) for the years ended December 31 consists of the following (in millions):
 
2016
 
2015
 
2014
Current:
 
 
 
 
 
U.S. Federal
$
1,338

 
$
1,634

 
$
932

U.S. State and Local
67

 
88

 
103

Non-U.S.
177

 
236

 
185

Total Current
1,582

 
1,958

 
1,220

Deferred:
 
 
 
 
 
U.S. Federal
103

 
469

 
427

U.S. State and Local
31

 
65

 
(11
)
Non-U.S.
(11
)
 
6

 
(31
)
Total Deferred
123

 
540

 
385

Total Income Tax Expense
$
1,705

 
$
2,498

 
$
1,605

Income Before Income Taxes
Income before income taxes includes the following components (in millions):
 
2016
 
2015
 
2014
United States
$
4,322

 
$
6,348

 
$
3,819

Non-U.S.
814

 
994

 
818

Total Income Before Income Taxes:
$
5,136

 
$
7,342

 
$
4,637

Reconciliation of Statutory Federal Income Tax Rate to Effective Income Tax Rate
A reconciliation of the statutory federal income tax rate to the effective income tax rate for the years ended December 31 consists of the following:
 
2016
 
2015
 
2014
Statutory U.S. federal income tax rate
35.0
 %
 
35.0
 %
 
35.0
 %
U.S. state and local income taxes (net of federal benefit)
1.5

 
1.7

 
1.2

Non-U.S. tax rate differential
(2.4
)
 
(1.2
)
 
(2.4
)
Nondeductible/nontaxable items
0.8

 
0.2

 
1.3

U.S. federal tax credits
(1.2
)
 
(1.3
)
 
(1.5
)
Other
(0.5
)
 
(0.4
)
 
1.0

Effective income tax rate
33.2
 %
 
34.0
 %
 
34.6
 %
Deferred Tax Liabilities and Assets
Deferred income tax assets and liabilities are comprised of the following at December 31 (in millions):
 
2016
 
2015
Fixed assets and capitalized software
$
(4,782
)
 
$
(4,776
)
Other
(756
)
 
(699
)
Deferred tax liabilities
(5,538
)
 
(5,475
)
 
 
 
 
Pension and postretirement benefits
4,236

 
3,915

Loss and credit carryforwards
229

 
261

Insurance reserves
733

 
730

Stock compensation
297

 
256

Other
681

 
650

Deferred tax assets
6,176

 
5,812

Deferred tax assets valuation allowance
(159
)
 
(197
)
Deferred tax asset (net of valuation allowance)
6,017

 
5,615

 
 
 
 
Net deferred tax asset
$
479

 
$
140

 
 
 
 
Amounts recognized in the consolidated balance sheets:
 
 
 
Deferred tax assets
$
591

 
$
255

Deferred tax liabilities
(112
)
 
(115
)
Net deferred tax asset
$
479

 
$
140

U.S. State and Local Operating Loss and Credit Carryforwards
 
2016
 
2015
U.S. state and local operating loss carryforwards
$
603

 
$
894

U.S. state and local credit carryforwards
$
70

 
$
53

Summarized Activity Related to Unrecognized Tax Benefits
The following table summarizes the activity related to our unrecognized tax benefits (in millions):
 
Tax
 
Interest
 
Penalties
Balance at January 1, 2014
$
191

 
$
40

 
$
4

Additions for tax positions of the current year
15

 
—

 
—

Additions for tax positions of prior years
51

 
13

 
—

Reductions for tax positions of prior years for:
 
 
 
 
 
Changes based on facts and circumstances
(74
)
 
(8
)
 
—

Settlements during the period
(10
)
 
(2
)
 
—

Lapses of applicable statute of limitations
(1
)
 
(1
)
 
(1
)
Balance at December 31, 2014
172

 
42

 
3

Additions for tax positions of the current year
24

 
—

 
—

Additions for tax positions of prior years
45

 
21

 
3

Reductions for tax positions of prior years for:
 
 
 
 
 
Changes based on facts and circumstances
(85
)
 
(8
)
 
—

Settlements during the period
(6
)
 
(2
)
 
—

Lapses of applicable statute of limitations
(2
)
 
—

 
—

Balance at December 31, 2015
148

 
53

 
6

Additions for tax positions of the current year
17

 
—

 
—

Additions for tax positions of prior years
20

 
10

 
—

Reductions for tax positions of prior years for:
 
 
 
 
 
Changes based on facts and circumstances
(41
)
 
(13
)
 
—

Settlements during the period
—

 
—

 
—

Lapses of applicable statute of limitations
—

 
—

 
—

Balance at December 31, 2016
$
144

 
$
50

 
$
6