Income Taxes (Tables)

12 Months Ended

Dec. 31, 2015

Domestic and Foreign Components of Income Before 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

Components of Provision for Income Taxes

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

Difference Between Effective Tax Rate

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 Deferred Tax Assets and Liability

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

Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits

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