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Income Taxes | 12 Months Ended
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Dec. 31, 2015
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Income from continuing operations before taxes consisted of the following:
| Years Ended December 31,
| 2015 |  | 2014 |  | 2013
U.S. | $ | 516,233 |  |  | $ | 356,017 |  |  | $ | 288,660 |
International | 94,592 |  |  | 75,179 |  |  | 95,294 |
Total | $ | 610,825 |  |  | $ | 431,196 |  |  | $ | 383,954 |
The provision for income taxes from continuing operations consisted of the following:
| Years Ended December 31,
| 2015 |  | 2014 |  | 2013
U.S. Federal: |  |  |  |  |
Current | $ | 115,557 |  |  | $ | 71,683 |  |  | $ | 78,315 |
Deferred | 19,941 |  |  | 6,941 |  |  | (19,754 | )
| 135,498 |  |  | 78,624 |  |  | 58,561 |
U.S. State and Local: |  |  |  |  |
Current | 11,243 |  |  | 7,186 |  |  | 5,359 |
Deferred | 16,094 |  |  | (9,307 | ) |  | (8,026 | )
| 27,337 |  |  | (2,121 | ) |  | (2,667 | )
International: |  |  |  |  |
Current | 22,794 |  |  | 32,492 |  |  | 28,063 |
Deferred | 4,149 |  |  | 3,820 |  |  | (5,990 | )
| 26,943 |  |  | 36,312 |  |  | 22,073 |
Total current | 149,594 |  |  | 111,361 |  |  | 111,737 |
Total deferred | 40,184 |  |  | 1,454 |  |  | (33,770 | )
Total provision for income taxes | $ | 189,778 |  |  | $ | 112,815 |  |  | $ | 77,967 |
Effective tax rate | 31.1 | % |  | 26.2 | % |  | 20.3 | %
The effective tax rate for 2015 includes tax benefits of $20 million from the disposition of Imagitas and $3 million from the retroactive effect of 2015 tax legislation. The effective tax rate for 2014 includes tax benefits of $22 million from the resolution of tax examinations and $5 million from the retroactive effect of 2014 U.S. tax legislation. The effective tax rate for 2013 includes tax benefits of $13 million from an affiliate reorganization, $17 million from tax planning initiatives and $5 million from the adjustment of non-U.S. tax accounts from prior periods and the retroactive effect of 2013 U.S. tax legislation. The items accounting for the difference between income taxes computed at the federal statutory rate and our provision for income taxes consist of the following:
| Years Ended December 31,
| 2015 |  | 2014 |  | 2013
Federal statutory provision | $ | 213,789 |  |  | $ | 150,920 |  |  | $ | 134,389 |
State and local income taxes | 17,769 |  |  | (1,379 | ) |  | (1,733 | )
Other impact of foreign operations | (6,492 | ) |  | (12,668 | ) |  | (28,238 | )
Tax exempt income/reimbursement | (1,171 | ) |  | (1,327 | ) |  | (1,672 | )
Federal income tax credits/incentives | (10,959 | ) |  | (17,905 | ) |  | (10,282 | )
Unrealized stock compensation benefits | 2,658 |  |  | 2,318 |  |  | 2,292 |
Resolution of U.S. tax examinations | — |  |  | (5,856 | ) |  | (3,853 | )
Outside basis differences | (27,110 | ) |  | — |  |  | (13,214 | )
Other, net | 1,294 |  |  | (1,288 | ) |  | 278 |
Provision for income taxes | $ | 189,778 |  |  | $ | 112,815 |  |  | $ | 77,967 |
Other impacts of foreign operations include income of foreign affiliates taxed at rates other than the 35% U.S. statutory rate, the accrual or release of tax uncertainty amounts related to foreign operations, the tax impacts of foreign earnings repatriation and the U.S. foreign tax credit impacts of foreign income taxed in the U.S. Deferred tax liabilities and assets at December 31, 2015 and 2014 consisted of the following:
| December 31,
| 2015 |  | 2014
Deferred tax liabilities: |  |  |
Depreciation | $ | (69,622 | ) |  | $ | (60,282 | )
Deferred profit (for tax purposes) on sale to finance subsidiary | (108,061 | ) |  | (114,633 | )
Lease revenue and related depreciation | (188,231 | ) |  | (205,683 | )
Amortizable intangibles | (119,453 | ) |  | (74,034 | )
Other | (41,149 | ) |  | (64,900 | )
Gross deferred tax liabilities | (526,516 | ) |  | (519,532 | )
Deferred tax assets: |  |  |
Nonpension postretirement benefits | 79,861 |  |  | 82,181 |
Pension | 104,166 |  |  | 141,492 |
Inventory and equipment capitalization | 14,934 |  |  | 18,502 |
Restructuring charges | 14,238 |  |  | 35,432 |
Long-term incentives | 22,111 |  |  | 25,718 |
Net operating loss | 111,351 |  |  | 102,686 |
Tax credit carry forwards | 54,183 |  |  | 47,493 |
Tax uncertainties gross-up | 21,191 |  |  | 22,851 |
Other | 96,412 |  |  | 125,512 |
Gross deferred tax assets | 518,447 |  |  | 601,867 |
Less: Valuation allowance | (132,624 | ) |  | (116,935 | )
Net deferred tax assets | 385,823 |  |  | 484,932 |
Total deferred taxes, net | $ | (140,693 | ) |  | $ | (34,600 | )
A valuation allowance is recognized to reduce the total deferred tax assets to an amount that will more-likely-than-not be realized. The valuation allowance relates primarily to certain foreign, state and local net operating loss and tax credit carryforwards that are more-likely-than-not to expire unutilized. We have net operating loss carryforwards of $310 million as of December 31, 2015, of which, $251 million can be carried forward indefinitely and the remainder expire over the next 15 years. In addition, we have tax credit carryforwards of $54 million, of which $39 million can be carried forward indefinitely and the remainder expire over the next 10 to 15 years. As of December 31, 2015 we have not provided for income taxes on $860 million of cumulative undistributed earnings of subsidiaries outside the U.S. as these earnings will be either indefinitely reinvested or remitted substantially free of additional tax. However, we estimate that withholding taxes on such remittances would be $13 million. Determination of the liability that would be incurred if these earnings were remitted to the U.S. is not practicable as there is a significant amount of uncertainty with respect to determining the amount of foreign tax credits and other indirect tax consequences that may arise from the distribution of these earnings. Uncertain Tax Positions A reconciliation of the amount of unrecognized tax benefits is as follows:
| 2015 |  | 2014 |  | 2013
Balance at beginning of year | $ | 132,495 |  |  | $ | 172,594 |  |  | $ | 151,098 |
Increases from prior period positions | 7,637 |  |  | 9,090 |  |  | 15,777 |
Decreases from prior period positions | (16,753 | ) |  | (33,692 | ) |  | (6,908 | )
Increases from current period positions | 23,533 |  |  | 17,704 |  |  | 23,549 |
Decreases relating to settlements with tax authorities | (3,831 | ) |  | (22,127 | ) |  | (482 | )
Reductions from lapse of applicable statute of limitations | (3,832 | ) |  | (11,074 | ) |  | (10,440 | )
Balance at end of year | $ | 139,249 |  |  | $ | 132,495 |  |  | $ | 172,594 |
The amount of the unrecognized tax benefits at December 31, 2015, 2014 and 2013 that would affect the effective tax rate if recognized was $117 million, $109 million and $148 million, respectively. On a regular basis, we conclude tax return examinations, statutes of limitations expire, and court decisions interpret tax law. We regularly assess tax uncertainties in light of these developments. As a result, it is reasonably possible that the amount of our unrecognized tax benefits will decrease in the next 12 months, and we expect this change could be up to 15% of our unrecognized tax benefits. We recognize interest and penalties related to uncertain tax positions in our provision for income taxes. We recognized interest and penalties of $(4) million, $2 million and $27 million related to uncertain tax positions in our provision for income taxes for the years ended December 31, 2015, 2014 and 2013, respectively. We had $10 million and $11 million accrued for the payment of interest and penalties at December 31, 2015 and 2014, respectively. Other Tax Matters As is the case with other large corporations, our tax returns are examined each year by tax authorities in the U.S. and other global taxing jurisdictions in which we have operations. The IRS examinations of our consolidated U.S. income tax returns for tax years prior to 2012 are closed to audit. Additionally, in the U.S. we are subject to examination on various post-2005 State and Local taxes. In Canada, the examination of our tax filings prior to 2009 are closed to audit, except for the pending application of legal principles to specific issues arising in earlier years. Other significant jurisdictions in which we have, or have recently completed, tax examinations include France, closed through the end of 2012, Germany closed through the end of 2011 and except for an item under appeal the U.K. closed through the end of 2011. We have other less significant tax filings currently subject to examination. We regularly assess the likelihood of tax adjustments in each of the tax jurisdictions in which we have operations and account for the related financial statement implications. We believe we have established tax reserves that are appropriate given the possibility of tax adjustments. However, determining the appropriate level of tax reserves requires judgment regarding the uncertain application of tax law and the possibility of tax adjustments. Future changes in tax reserve requirements could have a material impact, positive or negative, on our results of operations, financial position and cash flows.

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