XML 69 R42.htm IDEA: XBRL DOCUMENT v3.8.0.1
Income taxes (Tables)
 12 Months Ended
Dec. 31, 2017
Income Tax Disclosure [Abstract]  
Components of profit (loss) before taxes
The components of profit (loss) before taxes were: 
 
 
 
 
 
 
 
 
Years ended December 31,
(Millions of dollars)
 
2017
 
2016
 
2015
U.S.
 
$
240

 
$
(2,053
)
 
$
636

Non-U.S.
 
3,842

 
2,192

 
2,803

 
 
$
4,082

 
$
139

 
$
3,439

 
 
 
 
 
 
 
Components of the provision (benefit) for income taxes
The components of the provision (benefit) for income taxes were:
 
 
 
 
 
 
 
 
Years ended December 31,
(Millions of dollars)
 
2017
 
2016
 
2015
Current tax provision (benefit):
 
 

 
 

 
 

U.S.1
 
$
963

 
$
(90
)
 
$
525

Non-U.S.
 
1,124

 
718

 
656

State (U.S.)
 
39

 
(5
)
 
42

 
 
2,126

 
623

 
1,223

 
 
 
 
 
 
 
Deferred tax provision (benefit):
 
 

 
 

 
 

U.S.1
 
1,385

 
(544
)
 
(367
)
Non-U.S.
 
(17
)
 
(108
)
 
66

State (U.S.)
 
(155
)
 
221

 
(6
)
 
 
1,213

 
(431
)
 
(307
)
Total provision (benefit) for income taxes
 
$
3,339

 
$
192

 
$
916

1 Includes U.S. taxes related to non-U.S. earnings.
 
 
 
 
 
 
 
Reconciliation of the U.S. federal statutory rate to effective rate
Reconciliation of the U.S. federal statutory rate to effective rate:

 
 
Years ended December 31,
(Millions of dollars)
 
2017
 
2016
 
2015
Taxes at U.S. statutory rate
 
$
1,429

 
35.0
 %
 
$
49

 
35.0
 %
 
$
1,203

 
35.0
 %
(Decreases) increases resulting from:
 
 

 
 

 
 

 
 

 
 

 
 

Non-U.S. subsidiaries taxed at other than 35%
 
(282
)
 
(6.9
)%
 
(119
)
 
(85.6
)%
 
(236
)
 
(6.9
)%
State and local taxes, net of federal 1
 
27

 
0.7
 %
 
(1
)
 
(0.7
)%
 
24

 
0.7
 %
Interest and penalties, net of tax
 
28

 
0.7
 %
 
24

 
17.2
 %
 
12

 
0.4
 %
U.S. research and production incentives
 
(52
)
 
(1.3
)%
 
(52
)
 
(37.4
)%
 
(95
)
 
(2.7
)%
ESOP dividend tax benefit
 
(21
)
 
(0.5
)%
 
(27
)
 
(19.4
)%
 
(27
)
 
(0.8
)%
Net excess tax benefits from stock-based compensation
 
(64
)
 
(1.6
)%
 
—

 
—
 %
 
—

 
—
 %
U.S. deferred tax rate change
 
596

 
14.6
 %
 
—

 
—
 %
 
—

 
—
 %
Mandatory deemed repatriation of non-U.S. earnings
 
1,775

 
43.5
 %
 
—

 
—
 %
 
—

 
—
 %
Valuation allowances
 
(111
)
 
(2.7
)%
 
141

 
101.4
 %
 
—

 
—
 %
Nondeductible goodwill 2
 
—

 
—
 %
 
191

 
137.4
 %
 
—

 
—
 %
Prior year tax and interest adjustments
 
—

 
—
 %
 
—

 
—
 %
 
42

 
1.2
 %
Other—net
 
14

 
0.3
 %
 
(14
)
 
(10.1
)%
 
(7
)
 
(0.2
)%
Provision (benefit) for income taxes
 
$
3,339

 
81.8
 %
 
$
192

 
137.8
 %
 
$
916

 
26.7
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
1 Excludes amounts included in valuation allowances and mandatory deemed repatriation of non-U.S. earnings.
 
 
2 Portion of Surface Mining & Technology goodwill impairment not deductible for tax purposes. See Note 10 for further discussion.
Deferred income tax assets and liabilities
The amount of deferred income taxes at December 31, included on the following lines in Statement 3, are as follows:
 
 
 
December 31,
(Millions of dollars)
 
2017
 
2016
Assets:
 
 

 
 

Noncurrent deferred and refundable income taxes
 
1,569

 
2,683

Liabilities:
 
 

 
 

Other liabilities
 
281

 
237

Deferred income taxes—net
 
$
1,288

 
$
2,446

 
 
 
 
 
 
Deferred income tax assets and liabilities:
 
 
 
 
 
 
December 31,
(Millions of dollars)
 
2017
 
2016
Deferred income tax assets:
 
 

 
 

Tax carryforwards
 
$
1,286

 
$
1,999

Pension
 
980

 
1,887

Postemployment benefits other than pensions
 
841

 
1,318

Warranty reserves
 
226

 
339

Stock-based compensation
 
135

 
316

Allowance for credit losses
 
149

 
209

Post sale discounts
 
160

 
207

Other employee compensation and benefits
 
203

 
262

Other—net
 
302

 
569

 
 
4,282

 
7,106

 
 
 
 
 
Deferred income tax liabilities:
 
 

 
 

Capital and intangible assets
 
(1,360
)
 
(2,455
)
Bond discount
 
(133
)
 
(223
)
Translation
 
(165
)
 
(368
)
Other outside basis differences
 
(205
)
 
(227
)
Undistributed profits of non-U.S. subsidiaries
 
(138
)
 
(285
)
 
 
(2,001
)
 
(3,558
)
Valuation allowance for deferred tax assets
 
(993
)
 
(1,102
)
Deferred income taxes—net
 
$
1,288

 
$
2,446

 
 
 
 
 
 
Summary of net operating loss carryforwards
At December 31, 2017, amounts and expiration dates of net operating loss carryforwards in various non-U.S. taxing jurisdictions were:
 
(Millions of dollars)
2018
 
2019
 
2020
 
2021-2023
 
2024-2038
 
Unlimited
 
Total
$
23

 
$
133

 
$
212

 
$
272

 
$
223

 
$
3,625

 
$
4,488

 
Reconciliation of unrecognized tax benefits
Reconciliation of unrecognized tax benefits: 1
 
 
 
 
 
 
Years ended December 31,
(Millions of dollars)
 
2017
 
2016
Balance at January 1,
 
$
1,032

 
$
968

 
 
 
 
 
Additions for tax positions related to current year
 
270

 
73

Additions for tax positions related to prior years
 
20

 
55

Reductions for tax positions related to prior years
 
(27
)
 
(36
)
Reductions for settlements 2 
 
(9
)
 
(24
)
Reductions for expiration of statute of limitations
 
—

 
(4
)
 
 
 
 
 
Balance at December 31,
 
$
1,286

 
$
1,032

 
 
 
 
 
Amount that, if recognized, would impact the effective tax rate
 
$
1,209

 
$
963


1 
Foreign currency impacts are included within each line as applicable.
2 
Includes cash payment or other reduction of assets to settle liability.