Annual report pursuant to Section 13 and 15(d)

INCOME TAXES (Tables)

v2.4.0.8
INCOME TAXES (Tables)
 12 Months Ended
Dec. 31, 2013
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):
 
2013
 
2012
 
2011
Current:
 
 
 
 
 
U.S. Federal
$
2,181

 
$
1,901

 
$
1,371

U.S. State and Local
205

 
182

 
121

Non-U.S.
162

 
167

 
166

Total Current
2,548

 
2,250

 
1,658

Deferred:
 
 
 
 
 
U.S. Federal
(242
)
 
(1,871
)
 
262

U.S. State and Local
(22
)
 
(201
)
 
44

Non-U.S.
18

 
(11
)
 
8

Total Deferred
(246
)
 
(2,083
)
 
314

Total
$
2,302

 
$
167

 
$
1,972

Income Before Income Taxes
Income before income taxes includes the following components (in millions):
 
2013
 
2012
 
2011
United States
$
6,040

 
$
384

 
$
5,309

Non-U.S.
634

 
590

 
467

 
$
6,674

 
$
974

 
$
5,776

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:
 
2013
 
2012
 
2011
Statutory U.S. federal income tax rate
35.0
 %
 
35.0
 %
 
35.0
 %
U.S. state and local income taxes (net of federal benefit)
2.1

 
—

 
2.0

Non-U.S. tax rate differential
(1.3
)
 
(6.1
)
 
(0.4
)
Nondeductible/nontaxable items
(0.2
)
 
(0.4
)
 
(0.1
)
U.S. federal tax credits
(1.2
)
 
(7.4
)
 
(1.7
)
Other
0.1

 
(4.0
)
 
(0.7
)
Effective income tax rate
34.5
 %
 
17.1
 %
 
34.1
 %
Deferred Tax Liabilities and Assets
Deferred tax liabilities and assets are comprised of the following at December 31 (in millions):
 
2013
 
2012
Property, plant and equipment
$
(3,613
)
 
$
(3,624
)
Goodwill and intangible assets
(1,116
)
 
(1,035
)
Other
(651
)
 
(617
)
Deferred tax liabilities
(5,380
)
 
(5,276
)
Pension and postretirement benefits
3,086

 
4,608

Loss and credit carryforwards (non-U.S. and state)
279

 
258

Insurance reserves
765

 
737

Vacation pay accrual
224

 
209

Stock compensation
70

 
159

Other
709

 
708

Deferred tax assets
5,133

 
6,679

Deferred tax assets valuation allowance
(251
)
 
(220
)
Deferred tax asset (net of valuation allowance)
4,882

 
6,459

Net deferred tax asset (liability)
$
(498
)
 
$
1,183

 
 
 
 
Amounts recognized in the consolidated balance sheets:
 
 
 
Current deferred tax assets
$
684

 
$
583

Current deferred tax liabilities (included in other current liabilities)
(48
)
 
(36
)
Non-current deferred tax assets
110

 
684

Non-current deferred tax liabilities
(1,244
)
 
(48
)
Net deferred tax asset (liability)
$
(498
)
 
$
1,183

U.S. State and Local Operating Loss and Credit Carryforwards
We have U.S. state and local operating loss and credit carryforwards as follows (in millions):
 
2013
 
2012
U.S. state and local operating loss carryforwards
$
546

 
$
608

U.S. state and local credit carryforwards
$
42

 
$
61

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, 2011
$
284

 
$
95

 
$
7

Additions for tax positions of the current year
13

 
—

 
—

Additions for tax positions of prior years
17

 
6

 
—

Reductions for tax positions of prior years for:
 
 
 
 
 
Changes based on facts and circumstances
(50
)
 
(9
)
 
(2
)
Settlements during the period
(11
)
 
(19
)
 
(1
)
Lapses of applicable statute of limitations
(1
)
 
—

 
(1
)
Balance at December 31, 2011
252

 
73

 
3

Additions for tax positions of the current year
13

 
—

 
—

Additions for tax positions of prior years
7

 
9

 
1

Reductions for tax positions of prior years for:
 
 
 
 
 
Changes based on facts and circumstances
(22
)
 
(18
)
 
—

Settlements during the period
(3
)
 
(7
)
 
—

Lapses of applicable statute of limitations
(15
)
 
(4
)
 
—

Balance at December 31, 2012
232

 
53

 
4

Additions for tax positions of the current year
15

 
—

 
—

Additions for tax positions of prior years
20

 
9

 
2

Reductions for tax positions of prior years for:
 
 
 
 
 
Changes based on facts and circumstances
(67
)
 
(23
)
 
(1
)
Settlements during the period
(8
)
 
1

 
—

Lapses of applicable statute of limitations
(1
)
 
—

 
(1
)
Balance at December 31, 2013
$
191

 
$
40

 
$
4