Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Income before Income Taxes and Noncontrolling Interests

The domestic and foreign components of our income before income taxes and noncontrolling interests are as follows:

	Year Ended December 31,
	2017			2016		2015
	(Millions)
U.S. income (loss) before income taxes	$	(25	)	$	63	$	198
Foreign income before income taxes		369			361		243
Income before income taxes and noncontrolling interests	$	344		$	424	$	441

Comparative Analysis of Components of Income Tax Expense

Following is a comparative analysis of the components of income tax expense (benefit):

	Year Ended December 31,
	2017			2016			2015
	(Millions)
Current—
U.S. federal	$	(24	)	$	(9	)	$	64
State and local		1			4			5
Foreign		101			85			83
		78			80			152
Deferred—
U.S. federal		13			(91	)		(1	)
State and local		(3	)		(1	)		1
Foreign		(18	)		12			(6	)
		(8	)		(80	)		(6	)
Income tax expense	$	70		$	—		$	146

Reconciliation of Income Taxes Computed at Statutory U.S. Federal Income Tax Rate to Income Tax Expense

Following is a reconciliation of income taxes computed at the statutory U.S. federal income tax rate (35 percent for all years presented) to the income tax expense reflected in the statements of income:

	Year Ended December 31,
	2017			2016			2015
	(Millions)
Income tax expense computed at the statutory U.S. federal income tax rate	$	120		$	148		$	154
Increases (reductions) in income tax expense resulting from:
Foreign income taxed at different rates		(48	)		(42	)		(14	)
Transition Tax under Tax Cuts and Jobs Act (“TCJA”)		43			—			—
Re-measurement of Worldwide Deferred Taxes		48			—			(4	)
State and local taxes on income, net of U.S. federal income tax benefit		(2	)		3			11
Changes in valuation allowance for tax loss carryforwards and credits		(1	)		18			13
Foreign tax holidays		—			—			(7	)
Investment and R&D tax credits		(6	)		(6	)		(26	)
Foreign earnings subject to U.S. federal income tax		(74	)		(101	)		12
Adjustment of prior years taxes		—			—			2
Tax contingencies		(1	)		(7	)		4
Other		(9	)		(13	)		1
Income tax expense	$	70		$	—		$	146

Components of Our Net Deferred Tax Assets

The components of our net deferred tax assets were as follows:

	Year Ended December 31,
	2017			2016
	(Millions)
Deferred tax assets—
Tax loss carryforwards:
State	$	19		$	13
Foreign		114			92
Tax credits		118			83
Postretirement benefits other than pensions		37			55
Pensions		24			48
Bad debts		3			3
Sales allowances		4			7
Payroll accruals		18			39
Other accruals		64			50
Valuation allowance		(163	)		(145	)
Total deferred tax assets		238			245
Deferred tax liabilities—
Tax over book depreciation		45			53
Total deferred tax liabilities		45			53
Net deferred tax assets	$	193		$	192

Reconciliation of Deferred Taxes to Deferred Taxes Shown In Balance Sheet

Following is a reconciliation of deferred taxes to the deferred taxes shown in the balance sheet:

	Year Ended December 31,
	2017			2016
	(Millions)
Balance Sheet:
Non-current portion—deferred tax asset	$	204		$	199
Non-current portion—deferred tax liability		(11	)		(7	)
Net deferred tax assets	$	193		$	192

Reconciliation of our Uncertain Tax Positions

A reconciliation of our uncertain tax positions is as follows:

	2017			2016			2015
	(Millions)
Uncertain tax positions—
Balance January 1	$	111		$	123		$	114
Gross increases in tax positions in current period		6			6			7
Gross increases in tax positions in prior period		2			2			14
Gross decreases in tax positions in prior period		(2	)		(5	)		(4	)
Gross decreases—settlements		—			—			(1	)
Gross decreases—statute of limitations expired		(5	)		(15	)		(7	)
Balance December 31	$	112		$	111		$	123

Tax Years Open to Examination in Primary Jurisdictions

We are subject to taxation in the U.S. and various state and foreign jurisdictions. As of December 31, 2017, our tax years open to examination in primary jurisdictions are as follows:

	Open To Tax Year
United States		2006
China		2007
Spain		2004
Canada		2014
Brazil		2012
Mexico		2012
Belgium		2015
Germany		2013
United Kingdom		2015