Income Taxes (Tables)

12 Months Ended

Dec. 31, 2015

Table Text Block [Abstract]

Components of income tax expense

The components of income tax expense for the years ended December 31 included in the Consolidated Statements of Income were as follows:

(Millions)				2015		2014		2013
Current income tax expense:
	U.S. federal		$	2,107	$	2,136	$	1,730
	U.S. state and local			335		264		288
	Non-U.S.			416		412		514
		Total current income tax expense		2,858		2,812		2,532
Deferred income tax expense (benefit):
	U.S. federal			(23)		352		113
	U.S. state and local			(5)		39		4
	Non-U.S.			(55)		(97)		(120)
		Total deferred income tax expense		(83)		294		(3)
Total income tax expense			$	2,775	$	3,106	$	2,529

Effective income tax rate

A reconciliation of the U.S. federal statutory rate of 35 percent to the Company’s actual income tax rate for the years ended December 31 on continuing operations was as follows:

			2015		2014		2013
U.S. statutory federal income tax rate			35.0	%	35.0	%	35.0	%
(Decrease) increase in taxes resulting from:
	Tax-exempt income		(1.7)		(1.5)		(1.6)
	State and local income taxes, net of federal benefit		2.8		2.7		3.1
	Non-U.S. subsidiaries earnings(a)		(1.8)		(2.2)		(2.8)
	Tax settlements(b)		(0.2)		(0.5)		(1.9)
	Non deductible expenses(c)		0.9		―		―
	All other		―		1.0		0.3
		Actual tax rates(a)	35.0	%	34.5	%	32.1	%

• Results for all years primarily included tax benefits associated with the undistributed earnings of certain non-U.S. subsidiaries that were deemed to be reinvested indefinitely.
• Relates to the resolution of tax matters in various jurisdictions.
• Relates to the nondeductible portion of the EG goodwill impairment.

Components of deferred tax assets and liabilities

The significant components of deferred tax assets and liabilities as of December 31 are reflected in the following table:

(Millions)				2015		2014
Deferred tax assets:
	Reserves not yet deducted for tax purposes		$	3,771	$	3,926
	Employee compensation and benefits			648		789
	Other			520		266
		Gross deferred tax assets		4,939		4,981
		Valuation allowance		(58)		(75)
		Deferred tax assets after valuation allowance		4,881		4,906
Deferred tax liabilities:
	Intangibles and fixed assets			1,547		1,597
	Deferred revenue			509		498
	Deferred interest			323		350
	Asset securitization			―		162
	Investment in joint ventures			231		223
	Other			120		62
		Gross deferred tax liabilities		2,730		2,892
Net deferred tax assets			$	2,151	$	2,014

Changes in unrecognized tax benefits

The following table presents changes in unrecognized tax benefits:

(Millions)			2015		2014		2013
Balance, January 1		$	909	$	1,044	$	1,230
Increases:
	Current year tax positions		81		4		124
	Tax positions related to prior years		177		111		176
Decreases:
	Tax positions related to prior years		(256)		(181)		(371)
	Settlements with tax authorities		(15)		(67)		(94)
	Lapse of statute of limitations		(26)		(1)		(21)
	Effects of foreign currency translations		―		(1)		―
Balance, December 31		$	870	$	909	$	1,044