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Income Taxes | 12 Months Ended
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Dec. 31, 2015
Income Tax Disclosure [Abstract] |
Income Taxes | 14. Income Taxes The domestic and foreign components of income before income taxes were as follows (in millions):
|  | Years Ended December 31, |
|  | 2015 |  |  | 2014 |  |  | 2013 |
Domestic |  | $ | (1,577 | ) |  | $ | 1,415 |  |  | $ | 1,362 |
Foreign |  |  | 988 |  |  |  | 2,079 |  |  |  | 1,762 |
|  | $ | (589 | ) |  | $ | 3,494 |  |  | $ | 3,124 |
The components of the provision for income taxes consisted of (in millions):
|  | Years Ended December 31, |
|  | 2015 |  |  | 2014 |  |  | 2013 |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | 30 |  |  | $ | 681 |  |  | $ | 632 |
State |  |  | (58 | ) |  |  | 43 |  |  |  | 55 |
Foreign |  |  | 464 |  |  |  | 615 |  |  |  | 592 |
Total current income tax provision |  |  | 436 |  |  |  | 1,339 |  |  |  | 1,279 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | (41 | ) |  |  | (309 | ) |  |  | (157 | )
State |  |  | (38 | ) |  |  | (5 | ) |  |  | (12 | )
Foreign |  |  | (179 | ) |  |  | 14 |  |  |  | (167 | )
Total deferred income tax benefit |  |  | (258 | ) |  |  | (300 | ) |  |  | (336 | )
Total income tax provision |  | $ | 178 |  |  | $ | 1,039 |  |  | $ | 943 |
The difference between the effective tax rate reflected in the provision for income taxes and the U.S. federal statutory rate was as follows (in millions):
|  | Years Ended December 31, |
|  | 2015 |  |  | 2014 |  |  | 2013 |
Federal income tax at U.S. statutory rate |  | $ | (206 | ) |  | $ | 1,223 |  |  | $ | 1,093 |
Foreign income tax rate differential |  |  | (110 | ) |  |  | (261 | ) |  |  | (216 | )
State income tax, net of federal benefit |  |  | (4 | ) |  |  | 25 |  |  |  | 27 |
Nondeductible expenses |  |  | 528 |  |  |  | 24 |  |  |  | 26 |
Tax benefit of manufacturing deduction |  |  | (1 | ) |  |  | (37 | ) |  |  | (33 | )
Foreign dividends, net of foreign tax credits |  |  | 28 |  |  |  | 132 |  |  |  | 32 |
Tax rate change on timing differences |  |  | (45 | ) |  |  | (2 | ) |  |  | (22 | )
Change in tax reserve |  |  | 69 |  |  |  | (11 | ) |  |  | (1 | )
Prior years taxes |  |  | (47 | ) |  |  | (11 | ) |  |  | (40 | )
Foreign exchange losses |  |  | (46 | ) |  |  | 28 |  |  |  | 25 |
Change in deferred tax valuation allowance |  |  | 15 |  |  |  | (83 | ) |  |  | 40 |
Other |  |  | (3 | ) |  |  | 12 |  |  |  | 12 |
Total income tax provision |  | $ | 178 |  |  | $ | 1,039 |  |  | $ | 943 |
Significant components of our deferred tax assets and liabilities were as follows (in millions):
|  | December 31, |
|  | 2015 |  |  | 2014 |  |  | 2013 |
Deferred tax assets: |  |  |  |  |  |  |  |  |  |  |  |
Allowances and operating liabilities |  | $ | 491 |  |  | $ | 542 |  |  | $ | 439 |
Net operating loss carryforwards |  |  | 170 |  |  |  | 118 |  |  |  | 51 |
Postretirement benefits |  |  | 79 |  |  |  | 79 |  |  |  | 49 |
Foreign tax credit carryforwards |  |  | 166 |  |  |  | 244 |  |  |  | 300 |
Other |  |  | 21 |  |  |  | 15 |  |  |  | 39 |
|  |  | 927 |  |  |  | 998 |  |  |  | 878 |
Valuation allowance for deferred tax assets |  |  | (63 | ) |  |  | (48 | ) |  |  | (133 | )
Total deferred tax assets |  |  | 864 |  |  |  | 950 |  |  |  | 745 |
Deferred tax liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Tax over book depreciation |  |  | 277 |  |  |  | 236 |  |  |  | 306 |
Intangible assets |  |  | 1,323 |  |  |  | 1,304 |  |  |  | 1,757 |
Deferred income |  |  | 232 |  |  |  | 257 |  |  |  | 285 |
Accrued U.S. tax on unremitted earnings |  |  | 55 |  |  |  | 107 |  |  |  | 92 |
Other |  |  | 209 |  |  |  | 377 |  |  |  | 164 |
Total deferred tax liabilities |  |  | 2,096 |  |  |  | 2,281 |  |  |  | 2,604 |
Net deferred tax liability |  | $ | 1,232 |  |  | $ | 1,331 |  |  | $ | 1,859 |
The balance of unrecognized tax benefits at December 31, 2015 and 2014 was $46 million and $115 million, respectively. Included in the increase in the balance of unrecognized tax benefits for the period ended December 31, 2015 was an uncertain tax position identified in a foreign jurisdiction totaling $69 million, of which the Company has settled and paid $69 million in the period. There was an increase of $14 million of unrecognized tax benefits associated with potential transfer pricing adjustments between foreign jurisdictions and certain operating expenses that may not be deductible in foreign jurisdictions. A $75 million reduction in the balance resulted from the completion of audits in foreign jurisdictions, and an $8 million reduction in the balance resulted from the lapse of applicable statutes of limitations in the U.S. and foreign jurisdictions. Of the decrease of $152 million in the balance of unrecognized tax benefits, $14 million was recorded as a reduction of income tax expense in the current year and is reflected in the “Change in tax reserve” category in the income tax rate schedule above. These unrecognized tax benefits are included in the balance of other liabilities in the Consolidated Balance Sheet at December 31, 2015. If the $46 million of unrecognized tax benefits accrued at December 31, 2015 are ultimately realized, the entire $46 million would be recorded as a reduction of income tax expense. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in millions):
|  | 2015 |  |  | 2014 |  |  | 2013 |
Unrecognized tax benefit at beginning of year |  | $ | 115 |  |  | $ | 127 |  |  | $ | 128 |
Additions based on tax positions related to the current year |  |  | 83 |  |  |  | 3 |  |  |  | — |
Reductions for tax positions of prior years |  |  | (75 | ) |  |  | — |  |  |  | — |
Settlements of audits |  |  | (69 | ) |  |  | — |  |  |  | — |
Reductions for lapse of applicable statutes of limitations |  |  | (8 | ) |  |  | (15 | ) |  |  | (1 | )
Unrecognized tax benefit at end of year |  | $ | 46 |  |  | $ | 115 |  |  | $ | 127 |
The Company does not anticipate that the total unrecognized tax benefits will significantly change due to the settlement of audits or the expiration of statutes of limitation within 12 months of this reporting date. To the extent penalties and interest would be assessed on any underpayment of income tax, such accrued amounts have been classified as a component of income tax expense in the financial statements consistent with the Company’s policy. During the year ended December 31, 2015, the Company recorded as an increase of income tax expense a $0.6 million net increase of accrued interest and penalties related to uncertain tax positions. At December 31, 2015, the Company has accrued approximately $3.8 million of interest and penalties relating to unrecognized tax benefits. These interest and penalties are included in the balance of other liabilities in the Consolidated Balance Sheet at December 31, 2015. The Company is subject to taxation in the United States, various states and foreign jurisdictions. The Company has significant operations in the United States, Norway, Canada, the United Kingdom, the Netherlands, France and Denmark. Tax years that remain subject to examination by major tax jurisdictions vary by legal entity, but are generally open in the U.S. for the tax years ending after 2009 and outside the U.S. for the tax years ending after 2008. In the United States, the Company has $21 million of net operating loss carryforwards as of December 31, 2015, of which $5 million will expire in 2020, $1 million will expire in 2024, $13 million will expire in 2025, $1 million will expire in 2026, and $1 million will expire in 2028. The potential benefit of $7 million has been reduced by a $5 million valuation allowance. Future income tax payments will be reduced in the event the Company ultimately realizes the benefit of these net operating losses. If the Company ultimately realizes the benefit of these net operating loss carryforwards, the valuation allowance of $5 million would reduce future income tax expense. Outside the United States, the Company has $765 million of net operating loss carryforwards as of December 31, 2015, of which $9 million will expire in 2016, $34 million will expire in 2017, $31 million will expire in 2018, $5 million will expire in 2019, $20 million will expire in 2020, $20 million will expire in 2021, $6 million will expire in 2022, $9 million will expire in 2023, $208 million will expire in 2024, $67 million will expire in 2025, $4 million will expire in 2034, $43 million will expire in 2035 and $309 million will carry forward indefinitely. The potential benefit of $162 million has been reduced by a $58 million valuation allowance. Future income tax payments will be reduced in the event the Company ultimately realizes the benefit of these net operating losses. If the Company ultimately realizes the benefit of these net operating loss carryforwards, the valuation allowance of $58 million would reduce future income tax expense. Also in the United States, the Company has $166 million of excess foreign tax credits as of December 31, 2015, of which $24 million will expire in 2020 and $142 million will expire in 2022. Undistributed earnings of certain of the Company’s foreign subsidiaries amounted to $8,187 million and $5,874 million at December 31, 2015 and 2014, respectively. Those earnings are considered to be permanently reinvested and no provision for U.S. federal and state income taxes has been made. Distribution of these earnings in the form of dividends or otherwise could result in U.S. federal taxes (subject to an adjustment for foreign tax credits) and withholding taxes payable in various foreign countries. Determination of the amount of unrecognized deferred U.S. income tax liability is not practical; however, unrecognized foreign tax credit carryforwards would be available to reduce some portion of the U.S. liability. Because of the number of tax jurisdictions in which the Company operates, its effective tax rate can fluctuate as operations and the local country tax rates fluctuate. The Company is also subject to audits by federal, state and foreign jurisdictions which may result in proposed assessments. The Company’s future tax provision will reflect any favorable or unfavorable adjustments to its estimated tax liabilities when resolved. The Company is unable to predict the outcome of these matters. However, the Company believes that none of these matters will have a material adverse effect on the results of operations or financial condition of the Company.

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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=6907707&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=6907707&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=6907707&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=6907707&loc=d3e32537-109319 + Details
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