INCOME TAXES (Tables)
|
12 Months Ended |
Dec. 31, 2018 |
|---|
| Income Tax Disclosure [Abstract] |
|
| Income Tax Expense Benefit |
The income tax expense (benefit) for the years ended December 31, 2018, 2017 and 2016 consists of the following (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2018 |
|
2017 |
|
2016 |
Current: |
|
|
|
|
|
U.S. Federal |
$ |
89 |
|
|
$ |
671 |
|
|
$ |
1,338 |
|
U.S. State and Local |
7 |
|
|
49 |
|
|
67 |
|
Non-U.S. |
374 |
|
|
288 |
|
|
177 |
|
Total Current |
470 |
|
|
1,008 |
|
|
1,582 |
|
Deferred: |
|
|
|
|
|
U.S. Federal |
668 |
|
|
1,115 |
|
|
98 |
|
U.S. State and Local |
75 |
|
|
118 |
|
|
30 |
|
Non-U.S. |
15 |
|
|
(9 |
) |
|
(11 |
) |
Total Deferred |
758 |
|
|
1,224 |
|
|
117 |
|
Total Income Tax Expense |
$ |
1,228 |
|
|
$ |
2,232 |
|
|
$ |
1,699 |
|
|
| Income Before Income Taxes |
Income before income taxes includes the following components (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2018 |
|
2017 |
|
2016 |
United States |
$ |
4,307 |
|
|
$ |
5,987 |
|
|
$ |
4,307 |
|
Non-U.S. |
1,712 |
|
|
1,150 |
|
|
814 |
|
Total Income Before Income Taxes: |
$ |
6,019 |
|
|
$ |
7,137 |
|
|
$ |
5,121 |
|
|
| 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, 2018, 2017 and 2016 consists of the following:
|
|
|
|
|
|
|
|
|
|
|
2018 |
|
2017 |
|
2016 |
Statutory U.S. federal income tax rate |
21.0 |
% |
|
35.0 |
% |
|
35.0 |
% |
U.S. state and local income taxes (net of federal benefit) |
1.4 |
|
|
1.5 |
|
|
1.5 |
|
Non-U.S. tax rate differential |
0.2 |
|
|
(2.0 |
) |
|
(2.4 |
) |
U.S. federal tax credits |
(1.1 |
) |
|
(1.8 |
) |
|
(1.2 |
) |
Income tax benefit from the Tax Cuts and Jobs Act and other non-U.S. tax law changes |
— |
|
|
(3.6 |
) |
|
— |
|
Defined benefit plans mark-to-market charge tax rate differential (1)
|
— |
|
|
1.5 |
|
|
— |
|
Other |
(1.1 |
) |
|
0.7 |
|
|
0.3 |
|
Effective income tax rate |
20.4 |
% |
|
31.3 |
% |
|
33.2 |
% |
|
| Deferred Tax Liabilities and Assets |
Deferred income tax assets and liabilities are comprised of the following at December 31, 2018 and 2017 (in millions):
|
|
|
|
|
|
|
|
|
|
2018 |
|
2017 |
Fixed assets and capitalized software |
$ |
(4,010 |
) |
|
$ |
(3,288 |
) |
Other |
(493 |
) |
|
(532 |
) |
Deferred tax liabilities |
(4,503 |
) |
|
(3,820 |
) |
|
|
|
|
Pension and postretirement benefits |
1,743 |
|
|
1,877 |
|
Loss and credit carryforwards |
298 |
|
|
323 |
|
Insurance reserves |
437 |
|
|
449 |
|
Stock compensation |
189 |
|
|
182 |
|
Accrued employee compensation |
274 |
|
|
266 |
|
Other |
196 |
|
|
359 |
|
Deferred tax assets |
3,137 |
|
|
3,456 |
|
Deferred tax assets valuation allowance |
(112 |
) |
|
(126 |
) |
Deferred tax asset (net of valuation allowance) |
3,025 |
|
|
3,330 |
|
|
|
|
|
Net deferred tax asset (liability) |
$ |
(1,478 |
) |
|
$ |
(490 |
) |
|
|
|
|
Amounts recognized in the consolidated balance sheets: |
|
|
|
Deferred tax assets |
$ |
141 |
|
|
$ |
266 |
|
Deferred tax liabilities |
(1,619 |
) |
|
(756 |
) |
Net deferred tax asset (liability) |
$ |
(1,478 |
) |
|
$ |
(490 |
) |
|
| U.S. State and Local Operating Loss and Credit Carryforwards |
In addition, we have U.S. state and local operating loss and credit carryforwards as follows (in millions):
|
|
|
|
|
|
|
|
|
|
2018 |
|
2017 |
U.S. state and local operating loss carryforwards |
$ |
1,014 |
|
|
$ |
1,215 |
|
U.S. state and local credit carryforwards |
$ |
80 |
|
|
$ |
83 |
|
|
| Summarized Activity Related to Unrecognized Tax Benefits |
The following table summarizes the activity related to our uncertain tax positions (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax |
|
Interest |
|
Penalties |
Balance at January 1, 2016 |
$ |
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 |
|
Additions for tax positions of the current year |
16 |
|
|
— |
|
|
— |
|
Additions for tax positions of prior years |
33 |
|
|
14 |
|
|
3 |
|
Reductions for tax positions of prior years for: |
|
|
|
|
|
Changes based on facts and circumstances |
(24 |
) |
|
(18 |
) |
|
— |
|
Settlements during the period |
(6 |
) |
|
(3 |
) |
|
— |
|
Lapses of applicable statute of limitations |
(3 |
) |
|
— |
|
|
— |
|
Balance at December 31, 2017 |
160 |
|
|
43 |
|
|
9 |
|
Additions for tax positions of the current year |
47 |
|
|
— |
|
|
1 |
|
Additions for tax positions of prior years |
7 |
|
|
10 |
|
|
— |
|
Reductions for tax positions of prior years for: |
|
|
|
|
|
Changes based on facts and circumstances |
(43 |
) |
|
(8 |
) |
|
(5 |
) |
Settlements during the period |
(1 |
) |
|
(1 |
) |
|
— |
|
Lapses of applicable statute of limitations |
(3 |
) |
|
— |
|
|
— |
|
Balance at December 31, 2018 |
$ |
167 |
|
|
$ |
44 |
|
|
$ |
5 |
|
|