INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Schedule of geographic allocation of income

Geographic Allocation of Income and Provision for Income Taxes
In millions	2019			2018			2017
Income (loss) before income taxes
Domestic	$	696		$	1,305		$	856
Foreign	(5		)	(3		)	(6		)
Income before income taxes	$	691		$	1,302		$	850
Current tax expense
Federal	$	70		$	166		$	226
State and local	4			6			2
Foreign	—			40			3
Total current tax expense	$	74		$	212		$	231
Deferred tax expense (benefit)
Federal 1	$	(9	)	$	27		$	392
State and local	(1		)	8			22
Total deferred tax expense (benefit)	$	(10	)	$	35		$	414
Provision for income taxes	$	64		$	247		$	645
Net income	$	627		$	1,055		$	205

1. 2018 and 2017 include the impact of The Act.

Schedule of Effective Income Tax Rate Reconciliation

Reconciliation to U.S. Statutory Rate	2019		2018		2017
Statutory U.S. federal income tax rate	21.0	%	21.0	%	35.0	%
Unrecognized tax benefits	(1.0	)	(0.3	)	(0.4	)
Foreign Derived Intangible Income ("FDII") deduction	(1.3	)	(2.2	)	—
Federal tax accrual adjustments	1.7		(0.3	)	(1.1	)
Impact of U.S. tax reform	—		(0.2	)	29.4
Restoration of tax basis	(12.2	)	—		—
Deferred intercompany gain	—		—		11.4
State and local tax impact	0.9		1.0		2.2
Other - net	0.2		—		(0.6	)
Effective Tax Rate 1	9.3	%	19.0	%	75.9	%

1. The tax rate for 2019 was favorably impacted by the restoration of tax basis in assets, driven by a recent court judgment that did not involve the Corporation. The tax rate for 2018 was favorably impacted by The Act and the FDII deduction. The tax rate for 2017 was unfavorably impacted by The Act and the recognition of a deferred gain.

Schedule of Deferred Tax Assets and Liabilities

Deferred Tax Balances at Dec 31	2019					2018
In millions	Assets			Liabilities		Assets			Liabilities
Property	$	14		$	145	$	—		$	129
Tax loss and credit carryforwards	39			—		42			—
Postretirement benefit obligations	275			—		234			—
Other accruals and reserves	320			—		326			8
Inventory	5			—		8			—
Other - net	20			—		11			2
Subtotal	$	673		$	145	$	621		$	139
Valuation allowances 1	(21		)	—		(19		)	—
Total	$	652		$	145	$	602		$	139

1. Primarily related to the realization of recorded tax benefits on state tax loss carryforwards from operations in the United States.

Summary of Operating Loss Carryforwards

Operating Loss and Tax Credit Carryforwards at Dec 31	2019		2018
In millions	Asset		Asset
Operating loss carryforwards
Expire within 5 years	$	26	$	31
Expire after 5 years or indefinite expiration	7		5
Total operating loss carryforwards	$	33	$	36
Tax credit carryforwards
Expire after 5 years or indefinite expiration	$	6	$	6
Total tax credit carryforwards	$	6	$	6

Schedule of Total Gross Unrecognized Tax Benefits

The following table provides a reconciliation of the Corporation's unrecognized tax benefits:

Total Gross Unrecognized Tax Benefits
In millions	2019			2018			2017
Total unrecognized tax benefits at Jan 1	$	1		$	1		$	1
Total unrecognized tax benefits at Dec 31	$	1		$	1		$	1
Total unrecognized tax benefits that, if recognized, would impact the effective tax rate	$	1		$	1		$	1
Total amount of interest and penalties (benefit) recognized in "Provision for income taxes"	$	(7	)	$	(5	)	$	(6	)

Schedule of Tax Years Subject to Examination by Major Tax Jurisdiction

Tax years that remain subject to examination for the Corporation's major tax jurisdictions are shown below:

Tax Years Subject to Examination by Major Tax Jurisdiction at Dec 31, 2019	Earliest Open Year
Jurisdiction
United States:
Federal income tax	2004
State and local income tax	2004