Annual report pursuant to Section 13 and 15(d)

INCOME TAXES (Tables)

v3.8.0.1
INCOME TAXES (Tables)
 12 Months Ended
Dec. 31, 2017
Income Tax Disclosure [Abstract]  
Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block] The following table summarizes income before income taxes:
 

Years ended December 31,
In millions

2017

2016

2015
U.S. income

$
1,237


$
995


$
1,275

Foreign income

1,128


935


750

Income before income taxes

$
2,365


$
1,930


$
2,025

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block] Income tax expense (benefit) consists of the following:
 
 
Years ended December 31,
In millions
 
2017
 
2016
 
2015
Current
 
 
 
 
 
 
U.S. federal and state
 
$
355

 
$
211

 
$
516

Foreign
 
289

 
213

 
147

Impact of tax legislation
 
349

 
—

 
—

Total current
 
993

 
424

 
663

Deferred
 
 
 
 
 
 
U.S. federal and state
 
(42
)
 
57

 
(151
)
Foreign
 
(12
)
 
(7
)
 
43

Impact of tax legislation
 
432

 
—

 
—

Total deferred
 
378

 
50

 
(108
)
Income tax expense
 
$
1,371

 
$
474

 
$
555

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]
 
 
Years ended December 31,
 
 
2017
 
2016
 
2015
Statutory U.S. federal income tax rate
 
35.0
 %
 
35.0
 %
 
35.0
 %
State income tax, net of federal effect
 
0.6

 
0.8

 
1.2

Differences in rates and taxability of foreign subsidiaries and joint ventures
 
(6.4
)
 
(7.2
)
 
(6.6
)
Research tax credits
 
(1.4
)
 
(1.7
)
 
(1.4
)
Impact of tax legislation
 
33.1

 
—

 
—

Other, net
 
(2.9
)
 
(2.3
)
 
(0.8
)
Effective tax rate
 
58.0
 %
 
24.6
 %
 
27.4
 %
Schedule of Deferred Tax Assets and Liabilities [Table Text Block] Carryforward tax benefits and the tax effect of temporary differences between financial and tax reporting that give rise to net deferred tax (liabilities) assets were as follows:
 
 
December 31,
In millions
 
2017
 
2016
Deferred tax assets
 
 
 
 
U.S. state carryforward benefits
 
$
200

 
$
159

Foreign carryforward benefits
 
159

 
154

Employee benefit plans
 
274

 
401

Warranty expenses
 
300

 
405

Accrued expenses
 
95

 
107

Other
 
70

 
64

Gross deferred tax assets
 
1,098

 
1,290

Valuation allowance
 
(347
)
 
(307
)
Total deferred tax assets
 
751

 
983

Deferred tax liabilities
 
 
 
 
Property, plant and equipment
 
(250
)
 
(319
)
Unremitted income of foreign subsidiaries and joint ventures
 
(331
)
 
(59
)
Employee benefit plans
 
(224
)
 
(213
)
Other
 
(31
)
 
(48
)
Total deferred tax liabilities
 
(836
)
 
(639
)
Net deferred tax (liabilities) assets
 
$
(85
)
 
$
344

Tax Related Line Items on the Consolidated Balance Sheets [Table Text Block] Our Consolidated Balance Sheets contain the following tax related items:
 
 
December 31,
In millions
 
2017
 
2016
Prepaid and other current assets
 
 
 
 
Refundable income taxes
 
$
152

 
$
192

Other assets
 
 
 
 
Deferred income tax assets
 
306

 
420

Long-term refundable income taxes
 
6

 
22

Accrued expenses
 
 
 
 
Income tax payable
 
77

 
48

Other liabilities and deferred revenue
 
 
 
 
Income tax payable
 
281

 
—

Deferred income tax liabilities
 
391

 
76

Schedule of Unrecognized Tax Benefits Roll Forward [Table Text Block] A reconciliation of unrecognized tax benefits for the years ended December 31, 2017, 2016 and 2015 was as follows:
 
 
December 31,
In millions
 
2017
 
2016
 
2015
Balance at beginning of year
 
$
59

 
$
135

 
$
174

Additions to current year tax positions
 
11

 
10

 
8

Additions to prior years' tax positions
 
9

 
18

 
24

Reductions to prior years' tax positions
 
(3
)
 
—

 
—

Reductions for tax positions due to settlements with taxing authorities
 
(35
)
 
(104
)
 
(71
)
Balance at end of year
 
$
41

 
$
59

 
$
135