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INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense (Benefit)

Income tax expense consisted of the following (in millions of dollars):

	For the Years Ended December 31,
	2018				2017				2016
Current income tax expense:
U.S. Federal	$	166			$	248			$	311
U.S. State	32				29				38
Foreign	47				22				25
Total current	245				299				374
Deferred income tax expense	13				14				12
Total income tax expense	$	258			$	313			$	386

Schedule of Income before Income Tax, Domestic and Foreign

Earnings (losses) before income taxes by geographical area consisted of the following (in millions of dollars):

	For the Years Ended December 31,
	2018				2017				2016
U.S.	$	1,163			$	971			$	1,074
Foreign	(82		)		(35		)		(55		)
	$	1,081			$	936			$	1,019

Schedule of Deferred Tax Assets and Liabilities

The income tax effects of temporary differences that gave rise to the net deferred tax asset (liability) as of December 31, 2018 and 2017 were as follows (in millions of dollars):

	As of December 31,
	2018				2017
Deferred tax assets:
Inventory	$	4			$	14
Accrued expenses	35				44
Accrued employment-related benefits	49				63
Foreign operating loss carryforwards	64				72
Tax credit carryforward	22				20
Other	7				8
Deferred tax assets	181				221
Less valuation allowance	(72		)		(84		)
Deferred tax assets, net of valuation allowance	$	109			$	137
Deferred tax liabilities:
Property, buildings and equipment	(29		)		(33		)
Intangibles	(105		)		(119		)
Software	(15		)		(20		)
Prepaids	(6		)		(6		)
Other	(8		)		(4		)
Deferred tax liabilities	(163		)		(182		)
Net deferred tax liability	$	(54	)		$	(45	)
The net deferred tax asset (liability) is classified as follows:
Noncurrent assets	$	12			$	22
Noncurrent liabilities (foreign)	(66		)		(67		)
Net deferred tax liability	$	(54	)		$	(45	)

Summary of Valuation Allowance Changes

The Company's valuation allowance changed as follows (in millions of dollars):

	For the Years Ended December 31,
	2018				2017
Balance at beginning of period	$	(84	)		$	(73	)
Increases primarily related to foreign NOLs	(3		)		(13		)
Releases related to foreign NOLs	16				8
Other changes, net	—				5
Increase related to U.S. foreign tax credits	(1		)		(11		)
Balance at end of period	$	(72	)		$	(84	)

Reconciliation of Income Tax Statutory Rate

A reconciliation of income tax expense with federal income taxes at the statutory rate follows (in millions of dollars):

	For the Years Ended December 31,
	2018				2017				2016
Federal income tax	$	227			$	327			$	357
State income taxes, net of federal income tax benefit	32				20				26
Clean energy credit	(20		)		(38		)		(29		)
Foreign rate difference	20				10				21
Goodwill impairment	20				—				—
U.S. tax legislation impact (see note below)	—				(3		)		—
Excess tax benefits from stock-based compensation	(15		)		(14		)		—
Other - net	(6		)		11				11
Income tax expense	$	258			$	313			$	386
Effective tax rate	23.9		%		33.5		%		37.9		%

Reconciliation of Income Tax Contingencies

The changes in the liability for tax uncertainties, excluding interest, are as follows (in millions of dollars):

	For the Years Ended December 31,
	2018				2017				2016
Balance at beginning of year	$	45			$	59			$	61
Additions for tax positions related to the current year	4				4				14
Additions for tax positions of prior years	3				5				13
Reductions for tax positions of prior years	(5		)		(13		)		(15		)
Reductions due to statute lapse	(9		)		(5		)		(1		)
Settlements, audit payments, refunds - net	(1		)		(5		)		(13		)
Balance at end of year	$	37			$	45			$	59

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Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years.

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Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets.

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Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations.

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Tabular disclosure of income before income tax between domestic and foreign jurisdictions.

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Tabular disclosure for tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities and other income tax contingencies. Includes, but is not limited to, interest and penalties, reconciliation of unrecognized tax benefits, unrecognized tax benefits that would affect the effective tax rate, tax years that remain subject to examination by tax jurisdictions, and information about positions for which it is reasonably possible that amounts unrecognized will significantly change within 12 months.

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Tabular disclosure of valuation allowances to reduce deferred tax assets to net realizable value, including identification of the deferred tax asset more likely than not will not be fully realized and the corresponding amount of the valuation allowance.

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