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INCOME TAXES (Tables)
12 Months Ended
Dec. 31, 2018
Income Taxes [Abstract]  
Income by region
Income before taxes
Years Ended December 31,
201820172016
U.S.$2,919$2,873$2,981
Non-U.S.4,5684,0773,471
$7,487$6,950$6,452
Tax Expense Current and Deferred
Tax expense (benefit)
Years Ended December 31,
201820172016
Tax expense (benefit) consists of
Current:
U.S. Federal$(21)$2,061$869
U.S. State896297
Non-U.S.1,177787559
$1,245$2,910$1,525
Deferred:
U.S. Federal$396$190$40
U.S. State813917
Non-U.S.(990)2,12321
(586)2,45278
$659$5,362$1,603
Effective income tax rate reconciliation
Years Ended December 31,
201820172016
The U.S. federal statutory income tax rate is reconciled to our effective income tax rate as follows:
U.S. federal statutory income tax rate 21.0%35.0%35.0%
Taxes on non-U.S. earnings(1)(2)0.2(12.8)(8.0)
U.S. state income taxes(1)1.61.41.1
Reserves for tax contingencies0.31.61.2
Employee share-based payments(0.7)(2.9)(2.0)
U.S. Tax Reform(5.8)56.0-
Reduction of taxes on unremitted earnings(14.2)--
Separation tax costs5.5--
All other items—net0.9(1.1)(2.5)
8.8%77.2%24.8%
(1) Net of changes in valuation allowance
(2) Includes U.S. taxes on non-U.S. earnings
Deferred Tax Assets, Liabilities
December 31,
Deferred tax assets:20182017
Postretirement benefits other than pensions120177
Asbestos and environmental589570
Employee compensation and benefits262218
Other accruals and reserves336376
Net operating and capital losses688632
Tax credit carryforwards154510
Gross deferred tax assets2,1492,483
Valuation allowance(689)(663)
Total deferred tax assets$1,460$1,820
Deferred tax liabilities:
Pension……………………………………………….$(40)$(40)
Property, plant and equipment(422)(439)
Intangibles(1,553)(1,326)
Unremitted earnings of foreign subsidiaries(616)(2,151)
Other asset basis differences(110)(210)
Other(50)(67)
Total deferred tax liabilities(2,791)(4,233)
Net deferred tax liability$(1,331)$(2,413)
Summary of Operating Loss Carryforwards
Net Operating
Expirationand Capital LossTax Credit
JurisdictionPeriodCarryforwardsCarryforwards
U.S. Federal2038$9$22
U.S. State203840618
Non-U.S. 2038310117
Non-U.S. Indefinite2,353-
$3,078$157
Change in unrecognized tax benefits
201820172016
Change in unrecognized tax benefits:
Balance at beginning of year $947$877$765
Gross increases related to current period tax positions3709496
Gross increases related to prior periods tax positions8215388
Gross decreases related to prior periods tax positions(201)(91)(33)
Decrease related to resolutions of audits with tax authorities(40)(76)(3)
Expiration of the statute of limitations for the assessment of taxes(50)(54)(10)
Foreign currency translation(19)44(26)
Balance at end of year$1,089$947$877
Summary of Income Tax Examinations
Open Tax Years
Based on Originally Filed Returns
JurisdictionExamination inExamination not yet
progressinitiated
U.S. Federal2015 - 20162015, 2017 - 2018
U.S. State2011 - 20172012 - 2018
Australia N/A2016 - 2018
Canada(1)2010 - 20162017 - 2018
China 2003 - 20172018
France 2008 - 20172018
Germany(1)2007 - 2018N/A
India 1998 - 20162017 - 2018
Switzerland(1)2013 - 20142017 - 2018
United Kingdom 2013 - 20172018
(1) Includes provincial or similar local jurisdictions, as applicable.