INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2017

Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block]



Geographic Allocation of Income and Provision for Income Taxes
In millions	2017			2016			2015
Income (Loss) Before Income Taxes
Domestic ^{1, 2}	$	(1,973	)	$	485		$	5,313
Foreign ¹	4,772			3,928			4,617
Income Before Income Taxes	$	2,799		$	4,413		$	9,930
Current tax expense (benefit)
Federal	$	(308	)	$	91		$	583
State and local	—			21			38
Foreign	1,579			1,156			1,221
Total current tax expense	$	1,271		$	1,268		$	1,842
Deferred tax expense (benefit)
Federal ³	$	1,027		$	(1,255	)	$	358
State and local	56			(10		)	(8		)
Foreign	(150		)	6			(45		)
Total deferred tax expense (benefit)	$	933		$	(1,259	)	$	305
Provision for income taxes	$	2,204		$	9		$	2,147
Net Income	$	595		$	4,404		$	7,783


1.	In 2017, the domestic component of "Income Before Income Taxes" included approximately $308 million ($2.1 billion and $3.5 billion in 2016 and 2015, respectively) and the foreign component contained $562 million (zero and $1.1 billion in 2016 and 2015, respectively) of income from portfolio actions. See Notes 4, 5 and 7 for additional information.

In 2017, the domestic component of "Income Before Income Taxes" included approximately $2.7 billion of expense related to a goodwill impairment, non-qualified pension plan change in control charges and litigation settlements. In 2016, the domestic component of "Income Before Income Taxes" included approximately $2.6 billion of expenses related to the urethane matters class action lawsuit and opt-out cases settlements, asbestos-related charge and charges for environmental matters. See Notes 13, 16 and 19 for additional information.


3.	The 2017 amount reflects the tax impact of The Act which accelerated the utilization of tax credits and required remeasurement of all U.S. deferred tax assets and liabilities. The 2016 amount reflects the tax impact of accrued one-time items and reduced domestic income which limited the utilization of tax credits.

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]



Reconciliation to U.S. Statutory Rate	2017		2016		2015
Statutory U.S. federal income tax rate	35.0	%	35.0	%	35.0	%
Equity earnings effect	(4.2	)	(1.2	)	(1.8	)
Foreign income taxed at rates other than 35%¹	(15.9	)	(7.0	)	(4.0	)
U.S. tax effect of foreign earnings and dividends	(1.6	)	(4.6	)	1.3
Unrecognized tax benefits	1.1		(0.8	)	0.8
Acquisitions, divestitures and ownership restructuring activities ²	11.7		(21.2	)	(9.5	)
Impact of U.S. tax reform	32.7		—		—
State and local income taxes ³	3.2		0.2		0.6
Goodwill impairment	19.2		—		—
Excess tax benefits from stock compensation	(3.5	)	—		—
Other - net ³	1.0		(0.2	)	(0.8	)
Effective Tax Rate	78.7	%	0.2	%	21.6	%


1.	Includes the impact of valuation allowances in foreign jurisdictions.


2.	See Notes 4, 5 and 7 for additional information.


3.	Prior year was adjusted to conform with the current year presentation.

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]



Deferred Tax Balances at Dec 31	2017					2016
In millions	Assets			Liabilities		Assets			Liabilities
Property	$	508		$	2,474	$	307		$	2,860
Tax loss and credit carryforwards	1,734			—		2,450			—
Postretirement benefit obligations	2,442			136		3,715			75
Other accruals and reserves	1,251			146		1,964			883
Intangibles	176			1,010		128			1,536
Inventory	35			171		50			197
Investments	272			158		179			119
Other – net	420			414		737			643
Subtotal	$	6,838		$	4,509	$	9,530		$	6,313
Valuation allowances	(1,371		)	—		(1,061		)	—
Total	$	5,467		$	4,509	$	8,469		$	6,313

Summary of Operating Loss Carryforwards [Table Text Block]



Operating Loss and Tax Credit Carryforwards	2017		2016
In millions	Assets		Assets
Operating loss carryforwards
Expire within 5 years	$	246	$	176
Expire after 5 years or indefinite expiration	1,305		1,346
Total operating loss carryforwards	$	1,551	$	1,522
Tax credit carryforwards
Expire within 5 years	$	39	$	28
Expire after 5 years or indefinite expiration	144		900
Total Operating Loss and Tax Credit Carryforwards	$	183	$	928

Schedule of Total Gross Unrecognized Tax Benefits [Table Text Block]



Total Gross Unrecognized Tax Benefits
In millions	2017			2016			2015
Total unrecognized tax benefits at Jan 1	$	231		$	280		$	240
Decreases related to positions taken on items from prior years	(4		)	(12		)	(6		)
Increases related to positions taken on items from prior years ¹	37			153			92
Increases related to positions taken in the current year ²	10			135			10
Settlement of uncertain tax positions with tax authorities ¹	(12		)	(325		)	(56		)
Decreases due to expiration of statutes of limitations	(9		)	—			—
Total unrecognized tax benefits at Dec 31	$	253		$	231		$	280
Total unrecognized tax benefits that, if recognized, would impact the effective tax rate	$	243		$	223		$	206
Total amount of interest and penalties (benefit) recognized in "Provision for income taxes"	$	2		$	(55	)	$	80
Total accrual for interest and penalties recognized in the consolidated balance sheets	$	110		$	89		$	178


1.	The 2016 balance includes the impact of a settlement agreement related to a historical change in the legal ownership structure of a nonconsolidated affiliate discussed below.


2.	The 2016 balance includes $126 million assumed in the DCC Transaction.

Schedule of Tax Years Subject to Examination by Major Tax Jurisdiction

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



Tax Years Subject to Examination by Major Tax Jurisdiction at Dec 31, 2017	Earliest Open Year
Jurisdiction	Earliest Open Year
Argentina	2010
Brazil	2007
Canada	2014
China	2007
Germany	2006
Italy	2013
The Netherlands	2015
Switzerland	2014
United States:
Federal income tax	2004
State and local income tax	2004