Income Taxes (Tables)

12 Months Ended

Dec. 31, 2016

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)	2016		2015		2014
Income before income taxes:
U.S.	$	725	$	702	$	313
Other	1,755		1,605		1,744
	$	2,480	$	2,307	$	2,057
The expense for income taxes is comprised of:
Income taxes:
Current–
U.S. Federal	$	208	$	90	$	80
Other national governments	366		385		369
U.S. state and local	43		52		26
	617		527		475
Deferred–
U.S. Federal	26		125		27
Other national governments	32		15		62
U.S. state and local	10		4		22
	68		144		111
Total income taxes	$	685	$	671	$	586

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)	2016		2015
Deferred tax assets:
Accrued expenses not currently deductible	$	582	$	586
Differences related to non-U.S. operations (a)	127		120
Accrued U.S. retirement benefits	629		630
Net operating losses (b)	56		70
Income currently recognized for tax	71		70
Foreign tax credit carryforwards	—		20
Other	50		49
	$	1,515	$	1,545

Deferred tax liabilities:
Differences related to non-U.S. operations	$	217	$	176
Depreciation and amortization	377		368
Accrued retirement & postretirement benefits - non-U.S. operations	10		94
Other	14		6
	$	618	$	644

(a) Net of valuation allowances of $3 million in 2016 and $9 millionin 2015.

(b) Net of valuation allowances of $17 million in 2016 and $19 million in 2015.

December 31,
(In millions of dollars)	2016		2015
Balance sheet classifications:
Deferred tax assets	$	1,097	$	1,138
Other liabilities	$	200	$	237

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,	2016		2015		2014
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	1.5		1.6		1.7
Differences related to non-U.S. operations	(9.2	)	(8.0	)	(7.5	)
Other	0.3		0.5		(0.7	)
Effective tax rate	27.6	%	29.1	%	28.5	%

Unrecognized tax benefits

Following is a reconciliation of the Company’s total gross unrecognized tax benefits for the years ended December 31, 2016, 2015 and 2014:

(In millions of dollars)	2016			2015			2014
Balance at January 1,	$	74		$	97		$	128
Additions, based on tax positions related to current year	2			3			13
Additions for tax positions of prior years	6			22			3
Reductions for tax positions of prior years	(6		)	(10		)	(29		)
Settlements	(7		)	(20		)	(4		)
Lapses in statutes of limitation	(4		)	(18		)	(14		)
Balance at December 31,	$	65		$	74		$	97