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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2016
Income Tax Disclosure [Abstract] |
Components of income before income taxes | The components of Income before income taxes are as follows for the three years ended December 31:
|  | 2016 |  | 2015 |  | 2014
United States |  | $ | 1,191 |  |  | $ | 1,118 |  |  | $ | 1,094 |
International |  | 2,547 |  |  | 1,645 |  |  | 2,439 |
Total Income before income taxes |  | $ | 3,738 |  |  | $ | 2,763 |  |  | $ | 3,533 |
Provision for income taxes | The Provision for income taxes consists of the following for the three years ended December 31:
|  | 2016 |  | 2015 |  | 2014
United States |  | $ | 395 |  |  | $ | 376 |  |  | $ | 348 |
International |  | 757 |  |  | 839 |  |  | 846 |
Total Provision for income taxes |  | $ | 1,152 |  |  | $ | 1,215 |  |  | $ | 1,194 |
Schedule of components of deferred income tax benefit | Temporary differences between accounting for financial statement purposes and accounting for tax purposes result in the current provision for taxes being higher (lower) than the total Provision for income taxes as follows:
|  | 2016 |  | 2015 |  | 2014
Goodwill and intangible assets |  | $ | 18 |  |  | $ | 3 |  |  | $ | (40 | )
Property, plant and equipment |  | (3 | ) |  | (25 | ) |  | (13 | )
Pension and other retiree benefits |  | — |  |  | 36 |  |  | 19 |
Stock-based compensation |  | 15 |  |  | 11 |  |  | 11 |
Tax loss and tax credit carryforwards |  | 5 |  |  | (4 | ) |  | 5 |
Other, net |  | (106 | ) |  | 98 |  |  | (19 | )
Total deferred tax benefit (provision) |  | $ | (71 | ) |  | $ | 119 |  |  | $ | (37 | )
Effective tax rate reconciliation | The difference between the statutory U.S. federal income tax rate and the Company’s global effective tax rate as reflected in the Consolidated Statements of Income is as follows:
Percentage of Income before income taxes |  | 2016 |  | 2015 |  | 2014
Tax at United States statutory rate |  | 35.0 | % |  | 35.0 | % |  | 35.0 | %
State income taxes, net of federal benefit |  | 0.5 |  |  | 1.0 |  |  | 0.7 |
Earnings taxed at other than United States statutory rate |  | (2.7 | ) |  | (3.6 | ) |  | (2.3 | )
(Benefit) charge for previously disclosed tax matters(1) |  | (0.8 | ) |  | 0.5 |  |  | 1.9 |
(Benefit) on Venezuela remeasurement(2) |  | (5.6 | ) |  | — |  |  | — |
Tax charge on incremental repatriation of foreign earnings(2) |  | 5.6 |  |  | — |  |  | — |
Venezuela deconsolidation(3) |  | — |  |  | 12.8 |  |  | — |
Other, net |  | (1.2 | ) |  | (1.7 | ) |  | (1.5 | )
Effective tax rate |  | 30.8 | % |  | 44.0 | % |  | 33.8 | %
_________
(1) | The benefit from a previously disclosed tax matter in 2016 relates to several Supreme Court and Administrative Court rulings in a foreign jurisdiction allowing certain tax deductions which had the effect of reversing prior decisions. The charge for a previously disclosed tax matter in 2015 relates to several Supreme Court rulings in a foreign jurisdiction disallowing certain tax deductions which had the effect of reversing prior decisions. The charge for a foreign tax matter in 2014 relates to a notice of an adverse decision in a foreign court regarding a tax position taken in prior years.
(2) | The effective tax rate in 2016 included a $210 U.S. income tax benefit recognized in the first quarter of 2016 principally related to changes in Venezuela’s foreign exchange regime implemented in March 2016. Although, effective December 31, 2015, the operating results of CP Venezuela are no longer included in the Company’s Consolidated Financial Statements, under current tax rules, the Company is required to continue including CP Venezuela’s results in its consolidated U.S. federal income tax return. In order to fully recognize the $210 tax benefit in 2016, the Company repatriated an incremental $1,500 of earnings of foreign subsidiaries it previously considered indefinitely reinvested outside of the U.S., and accordingly, recorded a tax charge of $210 during the first quarter of 2016.
(3) | See Note 14, Venezuela.
Components of deferred tax assets (liabilities) | The components of deferred tax assets (liabilities) are as follows at December 31:
|  | 2016 |  | 2015
Deferred tax liabilities: |  |  |  |
Goodwill and intangible assets |  | $ | (451 | ) |  | $ | (458 | )
Property, plant and equipment |  | (380 | ) |  | (380 | )
Other |  | (202 | ) |  | (150 | )
|  | (1,033 | ) |  | (988 | )
Deferred tax assets: |  |  |  |  |  |
Pension and other retiree benefits |  | 599 |  |  | 541 |
Tax loss and tax credit carryforwards |  | 34 |  |  | 30 |
Accrued liabilities |  | 246 |  |  | 235 |
Stock-based compensation |  | 127 |  |  | 123 |
Other |  | 82 |  |  | 151 |
|  | 1,088 |  |  | 1,080 |
Net deferred income taxes |  | $ | 55 |  |  | $ | 92 |
|  | 2016 |  | 2015
Deferred taxes included within: |  |  |  |
Assets: |  |  |  |
Other current assets(1) |  | $ | — |  |  | $ | 258 |
Deferred income taxes |  | 301 |  |  | 67 |
Liabilities: |  |  |  |
Deferred income taxes |  | (246 | ) |  | (233 | )
Net deferred income taxes |  | $ | 55 |  |  | $ | 92 |
________ (1) As permitted, the Company early adopted ASU 2015-17 on March 31, 2016 on a prospective basis. The new guidance eliminated the requirement to separate deferred income taxes into current and noncurrent. See Note 2, Summary of Significant Accounting Policies for additional details.
Unrecognized tax benefits activity | Unrecognized tax benefits activity for the years ended December 31, 2016, 2015 and 2014 is summarized below:
|  | 2016 |  | 2015 |  | 2014
Unrecognized tax benefits: |  |  |  |  |  |
Balance, January 1 |  | $ | 186 |  |  | $ | 218 |  |  | $ | 199 |
Increases as a result of tax positions taken during the current year |  | 9 |  |  | 20 |  |  | 23 |
Decreases of tax positions taken during prior years |  | (45 | ) |  | (25 | ) |  | (11 | )
Increases of tax positions taken during prior years |  | 71 |  |  | 61 |  |  | 32 |
Decreases as a result of settlements with taxing authorities and the expiration of statutes of limitations |  | (18 | ) |  | (79 | ) |  | (10 | )
Effect of foreign currency rate movements |  | (2 | ) |  | (9 | ) |  | (15 | )
Balance, December 31 |  | $ | 201 |  |  | $ | 186 |  |  | $ | 218 |

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