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Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2018
Income Tax Disclosure [Abstract]  
Components Of Earnings Before Income Taxes Between Domestic and Foreign Jurisdictions The components of earnings before income taxes were:
Years ended December 31,
2018

 
2017

 
2016

U.S.

$11,166

 

$9,660

 

$5,386

Non-U.S.
438

 
447

 
397

Total

$11,604

 

$10,107

 

$5,783
Schedule Of Income Tax Expense/(Benefit) Income tax expense/(benefit) consisted of the following:
Years ended December 31,
2018

 
2017

 
2016

Current tax expense
 
 
 
 
 
U.S. federal

$1,873

 

$1,276

 

$1,193

Non-U.S.
169

 
149

 
133

U.S. state
97

 
23

 
15

Total current
2,139

 
1,448

 
1,341

Deferred tax expense
 
 
 
 
 
U.S. federal
(996
)
 
204

 
(544
)
Non-U.S.
(4
)
 
3

 
(4
)
U.S. state
5

 
(6
)
 
(44
)
Total deferred
(995
)
 
201

 
(592
)
Total income tax expense

$1,144

 

$1,649

 

$749
Reconciliation Of U.S. Federal Statutory Tax Rate To Our Effective Income Tax Rate schedule The following is a reconciliation of the U.S. federal statutory tax rate to our effective income tax rates:
Years ended December 31,
2018

 
2017

 
2016

U.S. federal statutory tax
21.0
 %
 
35.0
 %
 
35.0
 %
Foreign derived intangible income(1)
(4.7
)
 


 


Federal audit settlements(2)
(3.6
)
 


 
(3.1
)
Research and development credits
(1.8
)
 
(1.6
)
 
(5.0
)
Excess tax benefits(3)
(1.6
)
 
(2.1
)
 
(1.8
)
Other provision adjustments
1.3

 
(0.2
)
 
(0.3
)
Impact of Tax Cuts and Jobs Act(4)
(1.0
)
 
(12.6
)
 
 
Tax on non-US activities
0.3

 
(0.9
)
 
(0.5
)
Tax basis adjustment(5)


 


 
(7.6
)
U.S. manufacturing activity tax benefit

 
(1.3
)
 
(3.7
)
Effective income tax rate
9.9
 %
 
16.3
 %
 
13.0
 %


(1) 
On December 22, 2017, the Tax Cuts and Jobs Act (TCJA) was enacted. The TCJA revised the U.S. corporate income tax by, among other things, lowering the rate from 35% to 21% effective January 1, 2018, implementing a territorial tax system and imposing a one-time tax on deemed repatriated earnings of non-U.S. subsidiaries. The TCJA also enacted provisions which effectively apply a lower U.S. tax rate to intangible income derived from serving non-U.S. markets. In 2018, we recorded a $549 tax benefit related to foreign derived intangible income.
(2) 
In the third quarter of 2018, we recorded a tax benefit of $412 related to the settlement of the 2013-2014
federal tax audit. In the third quarter of 2016, a tax benefit of $177 was recorded related to the settlement of the 2011-2012 federal tax audit.
(3) 
In 2018, 2017 and 2016, we recorded excess tax benefits related to employee share-based payments of $181, $207 and $105.
(4) 
In accordance with U.S. Securities and Exchange Commission Staff Accounting Bulletin No. 118 (SAB 118), in the fourth quarter of 2017, we recorded provisional tax benefits of $1,430 related to the remeasurement of our net U.S. deferred tax liabilities to reflect the reduction in the corporate tax rate and a provisional tax expense of $159 related to tax on non-U.S. activities resulting from the TCJA. During the fourth quarter of 2018 and in accordance with SAB 118, the Company completed its accounting for the provisional amounts recognized at December 31, 2017 and recorded an incremental benefit related to refinements to these provisional amounts which was not significant.
(5) 
In the third quarter of 2016, we recorded incremental tax benefits of $440 related to the application of a 2012 Federal Court of Claims decision which held that the tax basis in certain assets could be increased (tax basis adjustment).
Significant Components Of Deferred Tax Assets Net Of Deferred Tax Liabilities Significant components of our deferred tax (liabilities)/assets at December 31 were as follows:
 
2018

 
2017

Inventory and long-term contract methods of income recognition
(5,422
)
 
(6,459
)
Pension benefits
3,344

 
3,565

Fixed assets, intangibles and goodwill (net of valuation allowance of $16 and $16)
(1,616
)
 
(1,253
)
Retiree health care benefits
1,124

 
1,304

Other employee benefits
873

 
847

Accrued expenses and reserves
411

 
334

Customer and commercial financing
(309
)
 
(369
)
Net operating loss, credit and capital loss carryovers (net of valuation allowance of $77 and $53)(1)
258

 
299

Other
(115
)
 
(135
)
Net deferred tax (liabilities)/assets(2)

($1,452
)
 

($1,867
)

(1)  
Of the deferred tax asset for net operating loss and credit carryovers, $244 expires on or before December 31, 2037 and $14 may be carried over indefinitely.
(2)  
Included in the net deferred tax (liabilities)/assets as of December 31, 2018 and 2017 are deferred tax assets in the amounts of $4,275 and $4,636 related to Accumulated other comprehensive loss.
Net Deferred Tax Assets and Liabilities Net deferred tax (liabilities)/assets at December 31 were as follows:

2018

 
2017

Deferred tax assets

$8,835

 

$8,399

Deferred tax liabilities
(10,194
)
 
(10,197
)
Valuation allowance
(93
)
 
(69
)
Net deferred tax (liabilities)/assets

($1,452
)
 

($1,867
)
Schedule Of Unrecognized Tax Benefits Roll Forward A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
 
2018

 
2017

 
2016

Unrecognized tax benefits – January 1

$1,736

 

$1,557

 

$1,617

Gross increases – tax positions in prior periods
87

 
3

 
17

Gross decreases – tax positions in prior periods
(410
)
 
(44
)
 
(348
)
Gross increases – current-period tax positions
1,208

 
220

 
344

Settlements
(206
)
 


 
(73
)
Statute Lapse
(3
)
 


 


Unrecognized tax benefits – December 31

$2,412

 

$1,736

 

$1,557