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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Effective Income Tax Rate Reconciliation, Amount [Abstract]

Schedule of Effective Income Tax Rate Reconciliation

The following table summarizes the difference between income tax expense at the United States statutory rate of 35% and the income tax expense (benefit) at effective worldwide tax rates for the respective periods:

Millions of dollars		2013				2012				2011
Earnings (loss) before income taxes
United States		$	149			$	113			$	(240	)
Foreign		768				445				212
Earnings (loss) before income taxes		917				558				(28		)
Income tax computed at United States statutory rate		321				195				(10		)
U.S. government tax incentives, including Energy Tax Credits		(142		)		—				(379		)
Foreign government tax incentives, including BEFIEX		(63		)		(38		)		(100		)
Foreign tax rate differential		(17		)		(2		)		(13		)
U.S. foreign tax credits		(231		)		(31		)		(37		)
Valuation allowances		16				(86		)		11
State and local taxes, net of federal tax benefit		7				2				(4		)
Foreign withholding taxes		29				12				10
Non-deductible government settlements		—				—				30
U.S. tax on foreign dividends and subpart F income		195				57				26
Settlement of global tax audits		(54		)		18				10
Other items, net		7				6				20
Income tax computed at effective worldwide tax rates		$	68			$	133			$	(436	)

Schedule of Components of Income Tax Expense (Benefit)

The following table summarizes our income tax (benefit) provision for 2013, 2012 and 2011:

		2013								2012								2011
Millions of dollars		Current				Deferred				Current				Deferred				Current				Deferred
United States		$	(60	)		$	(57	)		$	18			$	24			$	(18	)		$	(464	)
Foreign		187				(9		)		189				(96		)		114				(64		)
State and local		2				5				7				(9		)		(1		)		(3		)
		$	129			$	(61	)		$	214			$	(81	)		$	95			$	(531	)
Total income tax expense (benefit)						$	68							$	133							$	(436	)

Schedule of Deferred Tax Assets and Liabilities

The following table summarizes the significant components of our deferred tax liabilities and assets at December 31, 2013 and 2012:

Millions of dollars		2013				2012
Deferred tax liabilities
Intangibles		$	517			$	513
Property, net		141				138
LIFO inventory		49				54
Other		201				194
Total deferred tax liabilities		908				899
Deferred tax assets
U.S. general business credit carryforwards, including Energy Tax Credits		1,050				917
Pensions		311				557
Loss carryforwards		467				410
Inventory prepayment		93				307
Postretirement obligations		177				174
Foreign tax credit carryforwards		243				98
Research and development capitalization		239				190
Employee payroll and benefits		138				174
Accrued expenses		102				82
Product warranty accrual		58				58
Receivable and inventory allowances		51				54
Other		233				170
Total deferred tax assets		3,162				3,191
Valuation allowances for deferred tax assets		(186		)		(130		)
Deferred tax assets, net of valuation allowances		2,976				3,061
Net deferred tax assets		$	2,068			$	2,162

Unrecognized tax benefits

The following table represents a reconciliation of the beginning and ending amount of unrecognized tax benefits that if recognized would impact the effective tax rate, excluding federal benefits of state and local tax positions, and interest and penalties:

Millions of dollars		2013				2012				2011
Balance, January 1		$	178			$	178			$	190
Additions for tax positions of the current year		17				13				9
Additions for tax positions of prior years		6				16				10
Reductions for tax positions of prior years		(81		)		(15		)		(24		)
Settlements during the period		(3		)		(5		)		(1		)
Lapses of applicable statute of limitation		(4		)		(9		)		(6		)
Balance, December 31		$	113			$	178			$	178

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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 the change in unrecognized tax benefits, excluding amounts pertaining to examined tax returns.

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