Income Taxes (Tables)

12 Months Ended

Dec. 31, 2015

Income Tax Disclosure [Abstract]

Components of income before income taxes

The components of income from continuing operations before income taxes were as follows:

	Year Ended December 31,
(dollars in millions)	2015			2014		2013
U.S. operations	$	(423	)	$	294	$	219
Foreign operations	744			786		636
Income from continuing operations before income taxes	$	321		$	1,080	$	855

Provision for income taxes

The provisions for income taxes were as follows:

	Year Ended December 31,
(dollars in millions)	2015			2014			2013
Current:
U.S. federal	$	35		$	70		$	—
U.S. state and local	(1		)	4			11
Foreign	198			231			166
	232			305			177
Deferred:
U.S. federal	(55		)	—			31
U.S. state and local	—			(3		)	2
Foreign	7			(44		)	(14		)
	(48		)	(47		)	19
Income tax provision	$	184		$	258		$	196

Effective income tax rate reconciliation

The reasons for the differences between the provision for income taxes and income taxes using the U.S. federal income tax rate were as follows:

	Year Ended December 31,
	2015			2014			2013
U.S. federal statutory rate	35.0		%	35.0		%	35.0		%
State and local income taxes	(0.1		)%	—		%	1.0		%
Foreign statutory rate differential	(34.7		)%	(9.7		)%	(10.6		)%
Change in valuation allowance on deferred tax assets	5.4		%	3.4		%	(1.7		)%
Nondeductible expenses	(1.1		)%	(0.1		)%	1.1		%
Goodwill impairments	56.4		%	1.0		%	—		%
Net U.S. tax on foreign source income	(5.8		)%	(2.9		)%	(3.2		)%
All other	2.2		%	(2.8		)%	1.3		%
Total	57.3		%	23.9		%	22.9		%
Total income taxes paid (dollars in millions)	$	548		$	353		$	329

Components of deferred tax assets and liabilities

Components of deferred tax assets (liabilities) were as follows:

	December 31,
(dollars in millions)	2015			2014
Deferred tax liabilities:
Plant and equipment	$	(117	)	$	(190	)
Intangible assets	(181		)	(221		)
Other	(9		)	(9		)
Total deferred tax liabilities	(307		)	(420		)
Deferred tax assets:
Inventory	22			48
Postretirement benefits other than pensions	—			3
Reserves and accruals	199			160
Net operating losses and tax credits	149			259
Pensions	28			38
Other	26			27
Total deferred tax assets	424			535
Valuation allowance	(93		)	(79		)
Net deferred tax assets	$	24		$	36

Changes in unrecognized tax benefits

Changes in the Company’s accruals for unrecognized tax benefits were as follows:

	Year Ended December 31,
(dollars in millions)	2015			2014			2013
Balance at beginning of year	$	97		$	103		$	121
Increases in estimates of tax positions related to prior fiscal year	1			—			—
Increases due to tax positions taken during the current year	—			6			3
Decreases relating to settlements with tax authorities	(5		)	(10		)	(19		)
Decreases resulting from the lapse of applicable statutes of limitation	—			—			—
Net increases (decreases) due to translation and interest	2			(2		)	(2		)
Balance at end of year	$	95		$	97		$	103

Summary of income tax examinations

The earliest years’ tax returns filed by the Company that are still subject to examination by authorities in the major tax jurisdictions are as follows:

United States	United Kingdom	Canada	France	Germany	Norway	Singapore	Italy
2011	2012	2010	2013	2012	2013	2012	2011

Summary of valuation allowance

Changes in the Company’s valuation allowances against these net operating loss and credit carryforwards and other deferred tax assets were as follows:

	Year Ended December 31,
(dollars in millions)	2015			2014			2013
Balance at beginning of year	$	79		$	59		$	84
Valuation allowances for unutilized net operating losses and excess foreign tax credits generated in the current year	45			25			11
Change in valuation allowances related to prior years	(20		)	(2		)	(16		)
Write-off of valuation allowances and associated deferred tax assets for certain losses that have no possibility of being utilized	—			—			(19		)
Effect of translation	(11		)	(3		)	(1		)
Balance at end of year	$	93		$	79		$	59

Summary of tax credit carryforwards

Tax attribute carryforwards which are available for use on future income tax returns at December 31, 2015 are as follows:

(dollars in millions)	Domestic		Foreign		Expiration
Net operating losses - regular income tax	$	—	$	316	2018 - Indefinite
Net operating losses – state income tax	$	32	$	—	2018 – 2035
Foreign tax credits	$	26	$	—	2025