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Income Taxes | 12 Months Ended
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Dec. 31, 2016
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The components of income before income taxes were as follows:
| 2016 |  | 2015 |  | 2014
U.S. | $ | (3 | ) |  | $ | 18 |  |  | $ | 83 |
Foreign | 772 |  |  | 621 |  |  | 438 |
| $ | 769 |  |  | $ | 639 |  |  | $ | 521 |
The provision for income taxes consisted of the following:
| 2016 |  | 2015 |  | 2014
Current tax: |  |  |  |  |
U.S. federal | $ | (1 | ) |  | $ | 6 |  |  | $ | 11 |
State and foreign | 171 |  |  | 147 |  |  | 113 |
| $ | 170 |  |  | $ | 153 |  |  | $ | 124 |
Deferred tax: |  |  |  |  |
U.S. federal | $ | 19 |  |  | $ | 12 |  |  | $ | 30 |
State and foreign | (3 | ) |  | 13 |  |  | (111 | )
| 16 |  |  | 25 |  |  | (81 | )
Total | $ | 186 |  |  | $ | 178 |  |  | $ | 43 |
The provision for income taxes differs from the amount of income tax determined by applying the U.S. statutory federal income tax rate to pre-tax income as a result of the following items:
| 2016 |  | 2015 |  | 2014
U.S. statutory rate at 35% | $ | 269 |  |  | $ | 224 |  |  | $ | 182 |
Tax on foreign income | (88 | ) |  | (74 | ) |  | (67 | )
Valuation allowance | (14 | ) |  | 21 |  |  | (70 | )
Tax contingencies | 11 |  |  | 13 |  |  | (1 | )
Non-deductible impairment charges | — |  |  | — |  |  | 18 |
Tax law changes | 3 |  |  | 4 |  |  | (17 | )
Other items, net | 5 |  |  | (10 | ) |  | (2 | )
Income tax provision | $ | 186 |  |  | $ | 178 |  |  | $ | 43 |
The Company benefits from certain incentives in Brazil which allow it pay reduced income taxes. The incentives expire at various dates beginning in 2018. These incentives increased net income attributable to the Company by $13, $8 and $12 in 2016, 2015 and 2014. The Company paid taxes of $158, $137 and $109 in 2016, 2015 and 2014. The components of deferred taxes at December 31 are:
| 2016 |  | 2015
| Assets |  | Liabilities |  | Assets |  | Liabilities
Tax loss and credit carryforwards | $ | 480 |  |  | $ | — |  |  | $ | 535 |  |  | $ | — |
Postretirement and postemployment benefits | 63 |  |  | — |  |  | 65 |  |  | — |
Pensions | 220 |  |  | 62 |  |  | 223 |  |  | 38 |
Property, plant and equipment | 17 |  |  | 150 |  |  | 19 |  |  | 167 |
Intangible assets | — |  |  | 128 |  |  | — |  |  | 158 |
Asbestos | 128 |  |  | — |  |  | 132 |  |  | — |
Accruals and other | 125 |  |  | 78 |  |  | 131 |  |  | 98 |
Valuation allowances | (225 | ) |  | — |  |  | (241 | ) |  | — |
Total | $ | 808 |  |  | $ | 418 |  |  | $ | 864 |  |  | $ | 461 |
Tax loss and credit carryforwards expire as follows:
Year |  | Amount |
2017 |  | $ | 5 |
2018 |  | 21 |
2019 |  | 30 |
2020 |  | 44 |
2021 |  | 48 |
Thereafter |  | 253 |
Unlimited |  | 79 |
Tax loss and credit carryforwards expiring after 2021 include $135 of U.S. state tax loss carryforwards and $92 of U.S. federal foreign tax credits. The unlimited category includes $59 of French tax loss carryforwards. The carryforwards presented above exclude $60 of windfall tax benefits that have not been realized. Realization of any portion of the Company’s deferred tax assets is dependent upon the availability of taxable income in the relevant jurisdictions. The Company considers all sources of taxable income, including (i) taxable income in any available carry back period, (ii) the reversal of taxable temporary differences, (iii) tax-planning strategies, and (iv) taxable income expected to be generated in the future other than from reversing temporary differences. The Company also considers whether there have been cumulative losses in recent years. The Company records a valuation allowance when it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company’s valuation allowances at December 31, 2016 include $204 related to the portion of U.S. state tax loss carryforwards that the Company does not believe are more likely than not to be utilized prior to their expiration. The Company’s ability to utilize state tax loss carryforwards is impacted by several factors including taxable income, expiration dates, limitations imposed by certain states on the amount of loss carryforwards that can be used in a given year to offset taxable income and whether the state permits the Company to file a combined return. In 2016, the Company recorded a net benefit of $31 to release the valuation allowance against its net deferred tax assets in Canada. The Company's operations in Canada recently returned to profitability in part due to benefits from recent restructuring actions and improved cost performance. Based on current projections, the Company believes it is more likely than not that it will realize the deferred tax assets. The Company's loss carryforwards in Canada expire at various dates beginning in 2026. If future changes impact the Company's profitability in Canada, it is possible that the Company may record an additional valuation allowance in the future. In 2014, the Company recognized an income tax benefit of $86 to fully release the valuation allowance against its net deferred tax assets in France. In recent years, the Company's operating profits in France were offset by interest expense. In the third quarter of 2014, the Company refinanced bonds issued by a French subsidiary resulting in significant interest savings. The impact of the refinancing and current low interest rate environment has significantly lowered the Company's interest expense in France. As the Company is currently generating taxable income in France and is projecting future taxable income in France, the Company fully released its valuation allowance. Due to the Company's high level of debt in France, a significant increase in interest rates could cause the Company to incur losses which may result in recording additional valuation allowance in the future. The Company's loss carryforwards in France do not expire. Management’s estimates of the appropriate valuation allowance in any jurisdictions involve a number of assumptions and judgments, including the amount and timing of future taxable income. Should future results differ from management’s estimates, it is possible there could be future adjustments to the valuation allowances that would result in an increase or decrease in tax expense in the period such changes in estimates are made. The Company has not provided deferred taxes on approximately $1,000 of earnings in certain non-U.S. subsidiaries because such earnings are indefinitely reinvested in its international operations. Upon distribution of such earnings in the form of dividends or otherwise, the Company would be subject to incremental tax. It is not practicable to estimate the amount of tax that might be payable. A reconciliation of unrecognized tax benefits follows:
| 2016 |  | 2015 |  | 2014
Balance at January 1 | $ | 28 |  |  | $ | 26 |  |  | $ | 31 |
Additions for prior year tax positions | 13 |  |  | 13 |  |  | — |
Lapse of statute of limitations | (2 | ) |  | — |  |  | (1 | )
Settlements | (12 | ) |  | (9 | ) |  | — |
Foreign currency translation | — |  |  | (2 | ) |  | (4 | )
Balance at December 31 | $ | 27 |  |  | $ | 28 |  |  | $ | 26 |
The Company’s unrecognized tax benefits include potential liabilities related to transfer pricing, foreign withholding taxes, and non-deductibility of expenses and exclude $1 of interest and penalties as of December 31, 2016. In 2016, the Spanish tax authorities concluded audits of Mivisa's Spanish tax operations for the years 2009 to 2014. In connection with the audits, the Company recognized a charge of $8 to settle certain tax contingencies. In 2015, the increase for prior year positions related to an unfavorable tax court ruling in Spain. The total interest and penalties recorded in income tax expense was less than $1 in 2016, $3 in 2015 and less than $1 in 2014. As of December 31, 2016, unrecognized tax benefits of $27, if recognized, would affect the Company's effective tax rate. The Company’s unrecognized tax benefits are not expected to increase over the next twelve months and are expected to decrease as open tax years lapse or claims are settled. The Company is unable to estimate a range of reasonably possible changes in its unrecognized tax benefits in the next twelve months as it is unable to predict when, or if, the tax authorities will commence their audits, the time needed for the audits, and the audit findings that will require settlement with the applicable tax authorities, if any. The tax years that remained subject to examination by major tax jurisdictions as of December 31, 2016 were, 2006 and subsequent years for the U.K.; 2009 and subsequent years for Spain; 2010 and subsequent years for Germany; 2011 and subsequent years for Mexico; 2012 and subsequent years for Italy and Brazil; 2013 and subsequent years for Canada; and 2014 and subsequent years for France and the U.S.. In addition, tax authorities in certain jurisdictions, including France and the U.S., may examine earlier years when tax carryforwards that were generated in those years are subsequently utilized.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32559-109319 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32718-109319 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32537-109319 + Details
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