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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2015

Income Tax Data from Continuing Operations

Income tax data from our continuing operations is as follows (in millions):

	Year Ended December 31,
	2015		2014			2013
Pretax income
U.S.	$	269	$	382		$	462
Foreign		400		400			366
	$	669	$	782		$	828
Provision (benefit) for income tax
Current:
U.S. federal	$	70	$	53		$	77
State and local		—		10			3
Foreign		91		93			118
		161		156			198
Deferred:
U.S. federal		12		36			69
State and local		2		19			13
Foreign		5		(72	)		(17	)
		19		(17	)		65
	$	180	$	139		$	263

Composition of Net Deferred Tax Balances

Deferred income taxes represent the tax effect of the differences between the book and tax bases of assets and liabilities plus carryforward items. The composition of net deferred tax balances were as follows (in millions):

	December 31,
	2015			2014
Current deferred tax assets	$	—		$	199
Long-term deferred tax assets ⁽²⁾		747			596
Current deferred tax liabilities ⁽¹⁾		—			(12	)
Long-term deferred tax liabilities ⁽²⁾		(34	)		(38	)
Deferred income taxes	$	713		$	745

(1)

Included in the accrued taxes and other line item in the consolidated balance sheets.

(2)

As of December 31, 2015, our balance sheet includes the effects of the adoption of ASU No. 2015-17, “Income Taxes (Topic 740) Balance Sheet Classification of Deferred Taxes,” requiring all deferred tax assets and liabilities be classified as non-current. We adopted this ASU on a prospective basis on December 31, 2015.

Deferred Tax Assets (Liabilities)

The tax effect of the temporary differences and carryforward items that give rise to deferred tax assets (liabilities) were as follows (in millions):

	December 31,
	2015			2014
Plant, property and equipment	$	(83	)	$	(52	)
Intangibles		(41	)		(51	)
Inventories		51			61
Deferred gains		469			396
Investments		61			141
Receivables (net of reserves)		(32	)		(30	)
Accrued expenses and other reserves		139			117
Employee benefits		76			67
Net operating loss, capital loss and tax credit carryforwards		208			269
Other		103			107
		951			1,025
Less valuation allowance		(238	)		(280	)
Deferred income taxes	$	713		$	745

Reconciliation of Tax Provision

A reconciliation of our tax provision at the U.S. statutory rate to the provision for income tax as reported is as follows (in millions):

	Year Ended December 31,
	2015			2014			2013
Tax provision at U.S. statutory rate	$	234		$	274		$	290
U.S. state and local income taxes		8			17			19
Net U.S. tax on foreign earnings		—			—			5
Foreign tax rate differential		(84	)		(90	)		(81	)
Foreign withholding tax (net of foreign tax credits)		8			16			17
Change in permanent reinvestment assertion on certain foreign earnings		(10	)		(25	)		—
Change in tax law		7			2			(31	)
Change in asset basis		—			—			(2	)
Change in uncertain tax positions		35			49			20
Tax settlements		—			(51	)		—
Tax/(benefits) on asset dispositions		—			(44	)		(7	)
Change in valuation allowances		(31	)		(9	)		48
Other		13			—			(15	)
Provision for income tax	$	180		$	139		$	263

Reconciliation of Beginning and Ending Balance of Unrecognized Tax Benefits

A reconciliation of the beginning and ending balance of unrecognized tax benefits is as follows (in millions):

	Year Ended December 31,
	2015			2014			2013
Beginning of year	$	240		$	261		$	258
Additions based on tax positions related to the current year		69			37			21
Additions for tax positions of prior years		32			26			40
Settlements with tax authorities		(1	)		(81	)		—
Reductions for tax positions in prior years		(14	)		(3	)		(19	)
Reductions due to the lapse of applicable statutes of limitations		—			—			(39	)
End of year	$	326		$	240		$	261