INCOME TAXES (Tables)
|
12 Months Ended |
Dec. 31, 2019 |
|---|
| Income Tax Disclosure [Abstract] |
|
| Income Tax Expense Benefit |
The income tax expense (benefit) for the years ended December 31, 2019, 2018 and 2017 consists of the following (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2019 |
|
2018 |
|
2017 |
Current: |
|
|
|
|
|
U.S. Federal |
$ |
570 |
|
|
$ |
89 |
|
|
$ |
671 |
|
U.S. State and Local |
183 |
|
|
7 |
|
|
49 |
|
Non-U.S. |
359 |
|
|
374 |
|
|
288 |
|
Total Current |
1,112 |
|
|
470 |
|
|
1,008 |
|
Deferred: |
|
|
|
|
|
U.S. Federal |
255 |
|
|
668 |
|
|
1,115 |
|
U.S. State and Local |
(93 |
) |
|
75 |
|
|
118 |
|
Non-U.S. |
(62 |
) |
|
15 |
|
|
(9 |
) |
Total Deferred |
100 |
|
|
758 |
|
|
1,224 |
|
Total Income Tax Expense |
$ |
1,212 |
|
|
$ |
1,228 |
|
|
$ |
2,232 |
|
|
| Income Before Income Taxes |
Income before income taxes includes the following components (in millions):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2019 |
|
2018 |
|
2017 |
United States |
$ |
3,972 |
|
|
$ |
4,307 |
|
|
$ |
5,987 |
|
Non-U.S. |
1,680 |
|
|
1,712 |
|
|
1,150 |
|
Total Income Before Income Taxes: |
$ |
5,652 |
|
|
$ |
6,019 |
|
|
$ |
7,137 |
|
|
| 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, 2019, 2018 and 2017 consists of the following:
|
|
|
|
|
|
|
|
|
|
|
2019 |
|
2018 |
|
2017 |
Statutory U.S. federal income tax rate |
21.0 |
% |
|
21.0 |
% |
|
35.0 |
% |
U.S. state and local income taxes (net of federal benefit) |
1.4 |
|
|
1.4 |
|
|
1.5 |
|
Non-U.S. tax rate differential |
0.3 |
|
|
0.2 |
|
|
(2.0 |
) |
U.S. federal tax credits |
(1.4 |
) |
|
(1.1 |
) |
|
(1.8 |
) |
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 |
|
Non-U.S. valuation allowance release |
(1.2 |
) |
|
— |
|
|
— |
|
Other |
1.3 |
|
|
(1.1 |
) |
|
0.7 |
|
Effective income tax rate |
21.4 |
% |
|
20.4 |
% |
|
31.3 |
% |
|
| Deferred Tax Liabilities and Assets |
Deferred income tax assets and liabilities are comprised of the following at December 31, 2019 and 2018 (in millions):
|
|
|
|
|
|
|
|
|
|
2019 |
|
2018 |
Fixed assets and capitalized software |
$ |
(4,720 |
) |
|
$ |
(4,010 |
) |
Operating lease right-of-use assets |
(685 |
) |
|
— |
|
Other |
(538 |
) |
|
(493 |
) |
Deferred tax liabilities |
(5,943 |
) |
|
(4,503 |
) |
|
|
|
|
Pension and postretirement benefits |
2,522 |
|
|
1,743 |
|
Loss and credit carryforwards |
328 |
|
|
298 |
|
Insurance reserves |
413 |
|
|
437 |
|
Stock compensation |
249 |
|
|
189 |
|
Accrued employee compensation |
287 |
|
|
274 |
|
Operating lease liabilities |
691 |
|
|
— |
|
Other |
205 |
|
|
196 |
|
Deferred tax assets |
4,695 |
|
|
3,137 |
|
Deferred tax assets valuation allowance |
(54 |
) |
|
(112 |
) |
Deferred tax asset (net of valuation allowance) |
4,641 |
|
|
3,025 |
|
|
|
|
|
Net deferred tax asset (liability) |
$ |
(1,302 |
) |
|
$ |
(1,478 |
) |
|
|
|
|
Amounts recognized in the consolidated balance sheets: |
|
|
|
Deferred tax assets |
$ |
330 |
|
|
$ |
141 |
|
Deferred tax liabilities |
(1,632 |
) |
|
(1,619 |
) |
Net deferred tax asset (liability) |
$ |
(1,302 |
) |
|
$ |
(1,478 |
) |
|
| 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):
|
|
|
|
|
|
|
|
|
|
2019 |
|
2018 |
U.S. state and local operating loss carryforwards |
$ |
1,374 |
|
|
$ |
1,014 |
|
U.S. state and local credit carryforwards |
$ |
110 |
|
|
$ |
80 |
|
|
| 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, 2017 |
$ |
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 |
|
Additions for tax positions of the current year |
6 |
|
|
— |
|
|
— |
|
Additions for tax positions of prior years |
51 |
|
|
13 |
|
|
— |
|
Reductions for tax positions of prior years for: |
|
|
|
|
|
Changes based on facts and circumstances |
(45 |
) |
|
(4 |
) |
|
(1 |
) |
Settlements during the period |
(3 |
) |
|
(1 |
) |
|
— |
|
Lapses of applicable statute of limitations |
(4 |
) |
|
— |
|
|
— |
|
Balance at December 31, 2019 |
$ |
172 |
|
|
$ |
52 |
|
|
$ |
4 |
|
|