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PROVISION FOR INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Schedule of Components of Earnings (Loss) from Continuing Operations and Provisions for Income Taxes

Components of earnings before income taxes and the (benefit from) provision for U.S. and other income taxes from operations follow:

	For years ended December 31,
(Dollars in millions)	2017				2016				2015
Earnings before income taxes
United States	$	654			$	422			$	618
Outside the United States	635				627				511
Total	$	1,289			$	1,049			$	1,129
(Benefit from) provision for income taxes
United States Federal
Current (1)	$	220			$	(80	)		$	87
Deferred (2)	(383		)		214				119
Outside the United States
Current	62				91				59
Deferred	2				(18		)		16
State and other
Current	13				2				22
Deferred	(13		)		(19		)		(28		)
Total	$	(99	)		$	190			$	275

⁽¹⁾  Includes a one-time transition tax of $71 million on deferred foreign income.

⁽²⁾  Includes one-time benefit of $517 million primarily due to the re-measurement of certain net deferred tax liabilities using the lower U.S. corporate income tax rate and a one-time $72 million valuation allowance on deferred tax assets for foreign tax credit carryforwards.

Schedule of Deferred Tax Charge (Benefit) Recorded as a Component of Accumulated Other Comprehensive Loss

The following represents the deferred tax (benefit) charge recorded as a component of AOCI in the Consolidated Statements of Financial Position:

	For years ended December 31,
(Dollars in millions)	2017				2016				2015
Defined benefit pension and other postretirement benefit plans	$	(16	)		$	21			$	42
Derivatives and hedging	8				105				21
Total	$	(8	)		$	126			$	63

Schedule of Income Tax Expense (Benefit) Included in Consolidated Financial Statement

Total income tax (benefit) expense included in the consolidated financial statements was composed of the following:

	For years ended December 31,
(Dollars in millions)	2017				2016				2015
Earnings before income taxes	$	(99	)		$	190			$	275
Other comprehensive income	(8		)		126				63
Total	$	(107	)		$	316			$	338

Schedule of Reconciliation of Income Taxes on Earnings from Continuing Operations at Federal Statutory Income Tax Rate

Differences between the (benefit from) provision for income taxes and income taxes computed using the U.S. Federal statutory income tax rate follow:

	For years ended December 31,
(Dollars in millions)	2017				2016				2015
Amount computed using the statutory rate	$	450			$	366			$	393
State income taxes, net	(4		)		(18		)		(3		)
Foreign rate variance	(150		)		(121		)		(93		)
Domestic manufacturing deduction	(18		)		(7		)		(12		)
Change in reserves for tax contingencies	20				—				(7		)
General business credits	(65		)		(20		)		(15		)
U.S. tax on foreign earnings	29				25				7
Foreign tax credits	(26		)		(10		)		(9		)
Tax law changes and tax loss from outside-U.S. entity reorganizations (1)	(339		)		—				—
Other	4				(25		)		14
(Benefit from) provision for income taxes	$	(99	)		$	190			$	275
Effective income tax rate	(8		)%		18		%		24		%

Schedule of Significant Components of Deferred Tax Assets and Liabilities

The significant components of deferred tax assets and liabilities follow:

	December 31,
(Dollars in millions)	2017				2016
Deferred tax assets
Post-employment obligations	$	242			$	378
Net operating loss carryforwards	690				337
Tax credit carryforwards	202				248
Environmental reserves	72				119
Unrealized derivative loss	17				50
Other	90				186
Total deferred tax assets	1,313				1,318
Less: Valuation allowance	410				278
Deferred tax assets less valuation allowance	$	903			$	1,040
Deferred tax liabilities
Property, plant, and equipment	$	(835	)		$	(1,237	)
Intangible assets	(535		)		(847		)
Investments	(274		)		—
Other	(131		)		(128		)
Total deferred tax liabilities	$	(1,775	)		$	(2,212	)
Net deferred tax liabilities	$	(872	)		$	(1,172	)
As recorded in the Consolidated Statements of Financial Position:
Other noncurrent assets	$	21			$	34
Deferred income tax liabilities	(893		)		(1,206		)
Net deferred tax liabilities	$	(872	)		$	(1,172	)

Schedule of Tax Receivables and Payables

Amounts due to and from tax authorities as recorded in the Consolidated Statements of Financial Position:

	December 31,
(Dollars in millions)	2017				2016
Miscellaneous receivables	$	215			$	235
Payables and other current liabilities	$	58			$	56
Other long-term liabilities	137				60
Total income taxes payable	$	195			$	116

Schedule of Reconciliation of Beginning and Ending Amounts of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:

(Dollars in millions)	2017				2016				2015
Balance at January 1	$	114			$	125			$	117
Adjustments based on tax positions related to current year	29				(7		)		(12		)
Additions based on acquisitions	—				—				27
Lapse of statute of limitations	(1		)		(4		)		(7		)
Balance at December 31	$	142			$	114			$	125

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- Definition

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

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