Income Taxes (Tables)

12 Months Ended

Dec. 31, 2015

Income Tax Disclosure [Abstract]

Taxes on income

For financial reporting purposes, income before income taxes includes the following components: 

For the Years Ended December 31,
(In millions of dollars)	2015		2014		2013
Income before income taxes:
U.S.	$	702	$	313	$	407
Other	1,605		1,744		1,566
	$	2,307	$	2,057	$	1,973
The expense for income taxes is comprised of:
Income taxes:
Current–
U.S. Federal	$	90	$	80	$	102
Other national governments	385		369		264
U.S. state and local	52		26		45
	527		475		411
Deferred–
U.S. Federal	125		27		12
Other national governments	15		62		149
U.S. state and local	4		22		22
	144		111		183
Total income taxes	$	671	$	586	$	594

Deferred income tax assets and liabilities

The significant components of deferred income tax assets and liabilities and their balance sheet classifications are as follows:

December 31,
(In millions of dollars)	2015		2014
Deferred tax assets:
Accrued expenses not currently deductible	$	586	$	572
Differences related to non-U.S. operations (a)	120		119
Accrued retirement benefits U.S.	630		638
Net operating losses (b)	70		57
Income currently recognized for tax	70		75
Foreign tax credit carryforwards	20		109
Other	49		84
	$	1,545	$	1,654

Deferred tax liabilities:
Differences related to non-U.S. operations	$	176	$	131
Depreciation and amortization	368		307
Accrued retirement & postretirement benefits - non-U.S. operations	94		41
Other	6		5
	$	644	$	484

(a) Net of valuation allowances of $9 million in 2015 and $15 millionin 2014.

(b) Net of valuation allowances of $19 million in 2015 and $82 million in 2014.

December 31,
(In millions of dollars)	2015		2014
Balance sheet classifications:
Deferred tax assets	$	1,138	$	1,358
Other liabilities	$	237	$	188

U.S. Federal statutory income tax rate

A reconciliation from the U.S. Federal statutory income tax rate to the Company’s effective income tax rate is shown below:

For the Years Ended December 31,	2015		2014		2013
U.S. Federal statutory rate	35.0	%	35.0	%	35.0	%
U.S. state and local income taxes—net of U.S. Federal income tax benefit	1.6		1.7		2.1
Differences related to non-U.S. operations	(8.0	)	(7.5	)	(6.0	)
Other	0.5		(0.7	)	(1.0	)
Effective tax rate	29.1	%	28.5	%	30.1	%

Unrecognized tax benefits

Following is a reconciliation of the Company’s total gross unrecognized tax benefits for the years ended December 31, 2015, 2014 and 2013:

(In millions of dollars)	2015			2014			2013
Balance at January 1,	$	97		$	128		$	117
Additions, based on tax positions related to current year	3			13			16
Additions for tax positions of prior years	22			3			35
Reductions for tax positions of prior years	(10		)	(29		)	(7		)
Settlements	(20		)	(4		)	(3		)
Lapses in statutes of limitation	(18		)	(14		)	(30		)
Balance at December 31,	$	74		$	97		$	128