Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

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)	2017		2016		2015
Income before income taxes:
U.S.	$	819	$	725	$	702
Other	1,824		1,755		1,605
	$	2,643	$	2,480	$	2,307
The expense for income taxes is comprised of:
Current–
U.S. Federal	$	313	$	208	$	90
Other national governments	388		366		385
U.S. state and local	36		43		52
	737		617		527
Deferred–
U.S. Federal	286		26		125
Other national governments	72		32		15
U.S. state and local	38		10		4
	396		68		144
Total income taxes	$	1,133	$	685	$	671

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)	2017		2016
Deferred tax assets:
Accrued expenses not currently deductible	$	369	$	582
Differences related to non-U.S. operations (a)	139		127
Accrued U.S. retirement benefits	394		629
Net operating losses (b)	67		56
Income currently recognized for tax	49		71
Other	31		50
	$	1,049	$	1,515

Deferred tax liabilities:
Differences related to non-U.S. operations	$	235	$	217
Depreciation and amortization	338		377
Accrued retirement & postretirement benefits - non-U.S. operations	172		10
Other	16		14
	$	761	$	618

(a) Net of valuation allowances of $18 million in 2017 and $3 millionin 2016.

(b) Net of valuation allowances of $11 million in 2017 and $17 million in 2016.

December 31,
(In millions of dollars)	2017		2016
Balance sheet classifications:
Deferred tax assets	$	669	$	1,097
Other liabilities	$	381	$	200

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,	2017		2016		2015
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		1.5		1.6
Differences related to non-U.S. operations	(8.6	)	(9.2	)	(8.0	)
U.S. Tax Reform	17.4		—		—
Equity compensation	(2.6	)	—		—
Other	0.2		0.3		0.5
Effective tax rate	42.9	%	27.6	%	29.1	%

Unrecognized tax benefits

Following is a reconciliation of the Company’s total gross unrecognized tax benefits for the years ended December 31, 2017, 2016 and 2015:

(In millions of dollars)	2017			2016			2015
Balance at January 1,	$	65		$	74		$	97
Additions, based on tax positions related to current year	1			2			3
Additions for tax positions of prior years	14			6			22
Reductions for tax positions of prior years	(6		)	(6		)	(10		)
Settlements	—			(7		)	(20		)
Lapses in statutes of limitation	(3		)	(4		)	(18		)
Balance at December 31,	$	71		$	65		$	74