XML 77 R36.htm IDEA: XBRL DOCUMENT
v2.4.1.9

Income Taxes (Tables) | 12 Months Ended
--- | ---
Dec. 31, 2014
Income Tax Disclosure [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 at effective worldwide tax rates for the respective periods:
Millions of dollars |  | 2014 |  | 2013 |  | 2012
Earnings before income taxes |  |  |  |  |  |
United States |  | $ | 325 |  |  | $ | 149 |  |  | $ | 113 |
Foreign |  | 556 |  |  | 768 |  |  | 445 |
Earnings before income taxes |  | 881 |  |  | 917 |  |  | 558 |
Income tax computed at United States statutory rate |  | 308 |  |  | 321 |  |  | 195 |
U.S. government tax incentives, including Energy Tax Credits |  | (10 | ) |  | (142 | ) |  | — |
Foreign government tax incentives, including BEFIEX |  | (46 | ) |  | (63 | ) |  | (38 | )
Foreign tax rate differential |  | (17 | ) |  | (17 | ) |  | (2 | )
U.S. foreign tax credits |  | (148 | ) |  | (231 | ) |  | (31 | )
Valuation allowances |  | 9 |  |  | 16 |  |  | (86 | )
State and local taxes, net of federal tax benefit |  | 5 |  |  | 7 |  |  | 2 |
Foreign withholding taxes |  | 16 |  |  | 29 |  |  | 12 |
U.S. tax on foreign dividends and subpart F income |  | 56 |  |  | 195 |  |  | 57 |
Settlement of global tax audits |  | (5 | ) |  | (54 | ) |  | 18 |
Other items, net |  | 21 |  |  | 7 |  |  | 6 |
Income tax computed at effective worldwide tax rates |  | $ | 189 |  |  | $ | 68 |  |  | $ | 133 |
Schedule of Components of Income Tax Expense (Benefit) | The following table summarizes our income tax (benefit) provision for 2014, 2013 and 2012:
|  | 2014 |  | 2013 |  | 2012
Millions of dollars |  | Current |  | Deferred |  | Current |  | Deferred |  | Current |  | Deferred
United States |  | $ | 7 |  |  | $ | 8 |  |  | $ | (60 | ) |  | $ | (57 | ) |  | $ | 18 |  |  | $ | 24 |
Foreign |  | 182 |  |  | 12 |  |  | 187 |  |  | (9 | ) |  | 189 |  |  | (96 | )
State and local |  | (2 | ) |  | (18 | ) |  | 2 |  |  | 5 |  |  | 7 |  |  | (9 | )
|  | $ | 187 |  |  | $ | 2 |  |  | $ | 129 |  |  | $ | (61 | ) |  | $ | 214 |  |  | $ | (81 | )
Total income tax expense |  |  |  | $ | 189 |  |  |  |  | $ | 68 |  |  |  |  | $ | 133 |
Schedule of Deferred Tax Assets and Liabilities | The following table summarizes the significant components of our deferred tax liabilities and assets at December 31, 2014 and 2013:
Millions of dollars |  | 2014 |  | 2013
Deferred tax liabilities |  |  |  |
Intangibles |  | $ | 800 |  |  | $ | 517 |
Property, net |  | 156 |  |  | 141 |
LIFO inventory |  | 45 |  |  | 49 |
Other |  | 193 |  |  | 201 |
Total deferred tax liabilities |  | 1,194 |  |  | 908 |
Deferred tax assets |  |  |  |
U.S. general business credit carryforwards, including Energy Tax Credits |  | 1,005 |  |  | 1,050 |
Pensions |  | 316 |  |  | 311 |
Loss carryforwards |  | 650 |  |  | 467 |
Inventory prepayment |  | — |  |  | 93 |
Postretirement obligations |  | 199 |  |  | 177 |
Foreign tax credit carryforwards |  | 249 |  |  | 243 |
Research and development capitalization |  | 358 |  |  | 239 |
Employee payroll and benefits |  | 141 |  |  | 138 |
Accrued expenses |  | 110 |  |  | 102 |
Product warranty accrual |  | 62 |  |  | 58 |
Receivable and inventory allowances |  | 73 |  |  | 51 |
Other |  | 300 |  |  | 233 |
Total deferred tax assets |  | 3,463 |  |  | 3,162 |
Valuation allowances for deferred tax assets |  | (308 | ) |  | (186 | )
Deferred tax assets, net of valuation allowances |  | 3,155 |  |  | 2,976 |
Net deferred tax assets |  | $ | 1,961 |  |  | $ | 2,068 |
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 |  | 2014 |  | 2013 |  | 2012
Balance, January 1 |  | $ | 113 |  |  | $ | 178 |  |  | $ | 178 |
Additions for tax positions of the current year |  | 17 |  |  | 17 |  |  | 13 |
Additions for tax positions of prior years |  | 4 |  |  | 6 |  |  | 16 |
Reductions for tax positions of prior years |  | (23 | ) |  | (81 | ) |  | (15 | )
Settlements during the period |  | (11 | ) |  | (3 | ) |  | (5 | )
Positions assumed in acquisitions |  | 42 |  |  | — |  |  | — |
Lapses of applicable statute of limitation |  | (1 | ) |  | (4 | ) |  | (9 | )
Balance, December 31 |  | $ | 141 |  |  | $ | 113 |  |  | $ | 178 |

X
- Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition 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. + References Reference 1: 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=6907707&loc=d3e32639-109319 + Details
Name: | us-gaap_ScheduleOfComponentsOfIncomeTaxExpenseBenefitTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition 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. + References Reference 1: 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=6907707&loc=d3e32537-109319 + Details
Name: | us-gaap_ScheduleOfDeferredTaxAssetsAndLiabilitiesTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition 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. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32687-109319 + Details
Name: | us-gaap_ScheduleOfEffectiveIncomeTaxRateReconciliationTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of the change in unrecognized tax benefits, excluding amounts pertaining to examined tax returns. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15A -URI http://asc.fasb.org/extlink&oid=6907707&loc=SL6600010-109319 + Details
Name: | us-gaap_ScheduleOfUnrecognizedTaxBenefitsExcludingAmountsPertainingToExaminedTaxReturnsRollForwardTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration