INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2013

Income Tax Disclosure [Abstract]

Income Tax Expense Benefit

The income tax expense (benefit) for the years ended December 31 consists of the following (in millions):

	2013			2012			2011
Current:
U.S. Federal	$	2,181		$	1,901		$	1,371
U.S. State and Local	205			182			121
Non-U.S.	162			167			166
Total Current	2,548			2,250			1,658
Deferred:
U.S. Federal	(242		)	(1,871		)	262
U.S. State and Local	(22		)	(201		)	44
Non-U.S.	18			(11		)	8
Total Deferred	(246		)	(2,083		)	314
Total	$	2,302		$	167		$	1,972

Income Before Income Taxes

Income before income taxes includes the following components (in millions):

	2013		2012		2011
United States	$	6,040	$	384	$	5,309
Non-U.S.	634		590		467
	$	6,674	$	974	$	5,776

Reconciliation of Statutory Federal Income Tax Rate to Effective Income Tax Rate

A reconciliation of the statutory federal income tax rate to the effective income tax rate for the years ended December 31 consists of the following:

	2013		2012		2011
Statutory U.S. federal income tax rate	35.0	%	35.0	%	35.0	%
U.S. state and local income taxes (net of federal benefit)	2.1		—		2.0
Non-U.S. tax rate differential	(1.3	)	(6.1	)	(0.4	)
Nondeductible/nontaxable items	(0.2	)	(0.4	)	(0.1	)
U.S. federal tax credits	(1.2	)	(7.4	)	(1.7	)
Other	0.1		(4.0	)	(0.7	)
Effective income tax rate	34.5	%	17.1	%	34.1	%

Deferred Tax Liabilities and Assets

Deferred tax liabilities and assets are comprised of the following at December 31 (in millions):

	2013			2012
Property, plant and equipment	$	(3,613	)	$	(3,624	)
Goodwill and intangible assets	(1,116		)	(1,035		)
Other	(651		)	(617		)
Deferred tax liabilities	(5,380		)	(5,276		)
Pension and postretirement benefits	3,086			4,608
Loss and credit carryforwards (non-U.S. and state)	279			258
Insurance reserves	765			737
Vacation pay accrual	224			209
Stock compensation	70			159
Other	709			708
Deferred tax assets	5,133			6,679
Deferred tax assets valuation allowance	(251		)	(220		)
Deferred tax asset (net of valuation allowance)	4,882			6,459
Net deferred tax asset (liability)	$	(498	)	$	1,183
Amounts recognized in the consolidated balance sheets:
Current deferred tax assets	$	684		$	583
Current deferred tax liabilities (included in other current liabilities)	(48		)	(36		)
Non-current deferred tax assets	110			684
Non-current deferred tax liabilities	(1,244		)	(48		)
Net deferred tax asset (liability)	$	(498	)	$	1,183

U.S. State and Local Operating Loss and Credit Carryforwards

We have U.S. state and local operating loss and credit carryforwards as follows (in millions):

	2013		2012
U.S. state and local operating loss carryforwards	$	546	$	608
U.S. state and local credit carryforwards	$	42	$	61

Summarized Activity Related to Unrecognized Tax Benefits

The following table summarizes the activity related to our unrecognized tax benefits (in millions):

	Tax			Interest			Penalties
Balance at January 1, 2011	$	284		$	95		$	7
Additions for tax positions of the current year	13			—			—
Additions for tax positions of prior years	17			6			—
Reductions for tax positions of prior years for:
Changes based on facts and circumstances	(50		)	(9		)	(2		)
Settlements during the period	(11		)	(19		)	(1		)
Lapses of applicable statute of limitations	(1		)	—			(1		)
Balance at December 31, 2011	252			73			3
Additions for tax positions of the current year	13			—			—
Additions for tax positions of prior years	7			9			1
Reductions for tax positions of prior years for:
Changes based on facts and circumstances	(22		)	(18		)	—
Settlements during the period	(3		)	(7		)	—
Lapses of applicable statute of limitations	(15		)	(4		)	—
Balance at December 31, 2012	232			53			4
Additions for tax positions of the current year	15			—			—
Additions for tax positions of prior years	20			9			2
Reductions for tax positions of prior years for:
Changes based on facts and circumstances	(67		)	(23		)	(1		)
Settlements during the period	(8		)	1			—
Lapses of applicable statute of limitations	(1		)	—			(1		)
Balance at December 31, 2013	$	191		$	40		$	4