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INCOME TAXES (Tables) | 12 Months Ended
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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 |

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