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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Schedule of income tax provision for continuing operations

The income tax provision for continuing operations consisted of the following for the respective years:



In millions	2013			2012			2011
Current:
Federal	$	2,623		$	2,226		$	1,807
State	437			410			338
	3,060			2,636			2,145
Deferred:
Federal	(115		)	(182		)	101
State	(17		)	(18		)	12
	(132		)	(200		)	113
Total	$	2,928		$	2,436		$	2,258

Reconciliation of the statutory income tax rate to the Company's effective income tax rate for continuing operations

The following table is a reconciliation of the statutory income tax rate to the Company’s effective income tax rate for continuing operations for the respective years:



	2013		2012		2011
Statutory income tax rate	35.0	%	35.0	%	35.0	%
State income taxes, net of federal tax benefit	4.0		3.9		3.9
Other	(0.1	)	(0.3	)	0.4
Effective income tax rate	38.9	%	38.6	%	39.3	%

Summary of the significant components of the Company's deferred tax assets and liabilities

The following table is a summary of the significant components of the Company’s deferred tax assets and liabilities as of December 31:



In millions	2013			2012
Deferred tax assets:
Lease and rents	$	344		$	336
Inventories	—			141
Employee benefits	213			202
Allowance for doubtful accounts	79			137
Retirement benefits	172			115
Net operating losses	10			5
Depreciation	192			—
Other	598			430
Valuation allowance	(3		)	—
Total deferred tax assets	1,605			1,366
Deferred tax liabilities:
Inventories	(69		)	—
Depreciation and amortization	(4,512		)	(4,457		)
Total deferred tax liabilities	(4,581		)	(4,457		)
Net deferred tax liabilities	$	(2,976	)	$	(3,091	)

Schedule of net deferred tax assets (liabilities)

Net deferred tax assets (liabilities) are presented on the consolidated balance sheets as follows:



In millions	2013			2012
Deferred tax assets—current	$	902		$	693
Deferred tax assets—noncurrent (included in other assets)	23			—
Deferred tax liabilities—noncurrent	(3,901		)	(3,784		)
Net deferred tax liabilities	$	(2,976	)	$	(3,091	)

Reconciliation of the beginning and ending amount of unrecognized tax benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:



In millions	2013			2012			2011
Beginning balance	$	80		$	38		$	35
Additions based on tax positions related to the current year	19			15			3
Additions based on tax positions related to prior years	37			42			13
Reductions for tax positions of prior years	(1		)	(2		)	—
Expiration of statutes of limitation	(17		)	(12		)	(7		)
Settlements	(1		)	(1		)	(6		)
Ending balance	$	117		$	80		$	38

- Definition

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

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