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INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2018

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 provision for (benefit from) U.S. and other income taxes from operations follow:

	For years ended December 31,
(Dollars in millions)	2018				2017				2016
Earnings before income taxes
United States	$	718			$	654			$	422
Outside the United States	592				635				627
Total	$	1,310			$	1,289			$	1,049
Provision for (benefit from) income taxes
United States Federal
Current (1)	$	161			$	220			$	(80	)
Deferred (2)	(11		)		(383		)		214
Outside the United States
Current	86				62				91
Deferred	(22		)		2				(18		)
State and other
Current	30				13				2
Deferred	(18		)		(13		)		(19		)
Total	$	226			$	(99	)		$	190

⁽¹⁾  A one-time transition tax of $71 million on deferred foreign income tax is included for 2017.

⁽²⁾  Includes a 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 for 2017.

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)	2018				2017				2016
Defined benefit pension and other postretirement benefit plans	$	(10	)		$	(16	)		$	21
Derivatives and hedging	3				8				105
Total	$	(7	)		$	(8	)		$	126

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

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

	For years ended December 31,
(Dollars in millions)	2018				2017				2016
Earnings before income taxes	$	226			$	(99	)		$	190
Other comprehensive income	(7		)		(8		)		126
Total	$	219			$	(107	)		$	316

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

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

	For years ended December 31,
(Dollars in millions)	2018				2017				2016
Amount computed using the statutory rate	$	274			$	450			$	366
State income taxes, net	6				(4		)		(18		)
Foreign rate variance	(52		)		(150		)		(121		)
Domestic manufacturing deduction	—				(18		)		(7		)
Change in reserves for tax contingencies	21				20				—
General business credits	(60		)		(65		)		(20		)
U.S. tax on foreign earnings	8				29				25
Foreign tax credits	(12		)		(26		)		(10		)
Tax law changes and tax loss from outside-U.S. entity reorganizations (1)	20				(339		)		—
Other	21				4				(25		)
Provision for (benefit from) income taxes	$	226			$	(99	)		$	190
Effective income tax rate	17		%		(8		)%		18		%

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)	2018				2017
Deferred tax assets
Post-employment obligations	$	230			$	242
Net operating loss carryforwards	708				690
Tax credit carryforwards	239				202
Environmental reserves	70				72
Unrealized derivative loss	18				17
Other	94				90
Total deferred tax assets	1,359				1,313
Less: Valuation allowance	466				410
Deferred tax assets less valuation allowance	$	893			$	903
Deferred tax liabilities
Property, plant, and equipment	$	(856	)		$	(835	)
Intangible assets	(473		)		(535		)
Investments	(274		)		(274		)
Other	(131		)		(131		)
Total deferred tax liabilities	$	(1,734	)		$	(1,775	)
Net deferred tax liabilities	$	(841	)		$	(872	)
As recorded in the Consolidated Statements of Financial Position:
Other noncurrent assets	$	43			$	21
Deferred income tax liabilities	(884		)		(893		)
Net deferred tax liabilities	$	(841	)		$	(872	)

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)	2018				2017
Miscellaneous receivables	$	135			$	215
Payables and other current liabilities	$	43			$	58
Other long-term liabilities	162				137
Total income taxes payable	$	205			$	195

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)	2018				2017				2016
Balance at January 1	$	142			$	114			$	125
Adjustments based on tax positions related to current year	44				29				(7		)
Lapse of statute of limitations	(4		)		(1		)		(4		)
Balance at December 31	$	182			$	142			$	114

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