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Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2017
Income Tax Disclosure [Abstract]  
Components Of Earnings Before Income Taxes Between Domestic and Foreign Jurisdictions
The components of earnings before income taxes were:
Years ended December 31,
2017

 
2016

 
2015

U.S.

$9,615

 

$5,175

 

$6,828

Non-U.S.
432

 
393

 
327

Total

$10,047

 

$5,568

 

$7,155
Schedule Of Income Tax Expense/(Benefit)
Income tax expense/(benefit) consisted of the following:
Years ended December 31,
2017

 
2016

 
2015

Current tax expense
 
 
 
 
 
U.S. federal

$1,276

 

$1,193

 

$2,102

Non-U.S.
149

 
133

 
122

U.S. state
23

 
15

 
21

Total current
1,448

 
1,341

 
2,245

Deferred tax expense
 
 
 
 
 
U.S. federal
405

 
(618
)
 
(297
)
Non-U.S.
(1
)
 
(4
)
 
4

U.S. state
(2
)
 
(46
)
 
27

Total deferred
402

 
(668
)
 
(266
)
Total income tax expense

$1,850

 

$673

 

$1,979
Reconciliation Of U.S. Federal Statutory Tax Rate To Our Effective Income Tax Rate schedule
The following is a reconciliation of the U.S. federal statutory tax rate of 35% to our effective income tax rates:
Years ended December 31,
2017

 
2016

 
2015

U.S. federal statutory tax
35.0
 %
 
35.0
 %
 
35.0
 %
Impact of Tax Cuts and Jobs Act(1)
(10.5
)
 
 
 
 
Tax basis adjustment(2)


 
(7.9
)
 


Federal audit settlements(3)

 
(3.2
)
 

Excess tax benefits(4)
(2.1
)
 
(1.9
)
 


Research and development credits
(1.6
)
 
(5.2
)
 
(3.4
)
U.S. manufacturing activity tax benefit
(1.3
)
 
(3.8
)
 
(2.9
)
Tax on non-US activities
(0.9
)
 
(0.5
)
 
(0.6
)
Other provision adjustments
(0.2
)
 
(0.4
)
 
(0.4
)
Effective income tax rate
18.4
 %
 
12.1
 %
 
27.7
 %

(1) 
On December 22, 2017, the Tax Cuts and Jobs Act (TCJA) was enacted. The TCJA revises the U.S. corporate income tax by, among other things, lowering the rate from 35% to 21% effective January 1, 2018, implementing a territorial tax system and imposing a one-time tax on deemed repatriated earnings of non-U.S. subsidiaries. In the fourth quarter of 2017, we recorded provisional tax benefits of $1,210 related to the remeasurement of our net U.S. deferred tax liabilities to reflect the reduction in the corporate tax rate. We also recorded a provisional tax expense of $159 related to tax on non-U.S. activities resulting from the TCJA.
(2) 
In the third quarter of 2016, we recorded incremental tax benefits of $440 related to the application of a 2012 Federal Court of Claims decision which held that the tax basis in certain assets could be increased (tax basis adjustment).
(3) 
In the third quarter of 2016, a tax benefit of $177 was recorded as a result of the settlement of the 2011-2012 federal tax audit.
(4) 
In 2017 and 2016, we recorded excess tax benefits related to employee share-based payments of $207 and $105.
Significant Components Of Deferred Tax Assets Net Of Deferred Tax Liabilities
Significant components of our deferred tax (liabilities)/assets at December 31 were as follows:
 
2017

 
2016

Inventory and long-term contract methods of income recognition
(6,290
)
 
(9,954
)
Pension benefits
3,690

 
7,385

Retiree health care benefits
1,319

 
2,268

Fixed assets, intangibles and goodwill (net of valuation allowance of $16 and $16)
(1,259
)
 
(2,007
)
Other employee benefits
847

 
1,225

Customer and commercial financing
(369
)
 
(730
)
Accrued expenses and reserves
347

 
587

Net operating loss, credit and capital loss carryovers (net of valuation allowance of $53 and $79)(1)
299

 
277

Other
(82
)
 
(57
)
Net deferred tax (liabilities)/assets(2)

($1,498
)
 

($1,006
)

(1)  
Of the deferred tax asset for net operating loss and credit carryovers, $278 expires on or before December 31, 2036 and $21 may be carried over indefinitely.
(2)  
Included in the net deferred tax (liabilities)/assets as of December 31, 2017 and 2016 are deferred tax assets in the amounts of $4,636 and $7,701 related to Accumulated other comprehensive loss.
Net Deferred Tax Assets and Liabilities
Net deferred tax (liabilities)/assets at December 31 were as follows:

2017

 
2016

Deferred tax assets

$8,459

 

$13,591

Deferred tax liabilities
(9,888
)
 
(14,502
)
Valuation allowance
(69
)
 
(95
)
Net deferred tax (liabilities)/assets

($1,498
)
 

($1,006
)
Schedule Of Unrecognized Tax Benefits Roll Forward
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
 
2017

 
2016

 
2015

Unrecognized tax benefits – January 1

$1,557

 

$1,617

 

$1,312

Gross increases – tax positions in prior periods
3

 
17

 
38

Gross decreases – tax positions in prior periods
(44
)
 
(348
)
 
(25
)
Gross increases – current-period tax positions
220

 
344

 
292

Settlements


 
(73
)
 


Unrecognized tax benefits – December 31

$1,736

 

$1,557

 

$1,617