Taxes on Earnings (Tables)

The provision for income taxes on earnings from continuing operations consists of the following:



	2016		2015		2014
Earnings from continuing operations before income taxes:
United States	$	705	$	803	$	1,064
Non-U.S.	144		146		84
	$	849	$	949	$	1,148

The following is a reconciliation of the effective income tax rate on continuing operations to the U.S. federal statutory income tax rate:



	2016		2015		2014
Federal statutory income tax rate	35.0	%	35.0	%	35.0	%
State income taxes (net of federal tax benefit)	2.7		2.2		2.0
Tax effect of international items	(3.0	)	(2.5	)	(1.0	)
Settlement of tax contingencies	—		(0.8	)	—
Federal manufacturing deduction	(3.2	)	(2.9	)	(2.2	)
Goodwill impairment	4.3		—		—
Claim settlement	(0.8	)	—		—
Other	(1.3	)	(1.2	)	(1.2	)
Effective income tax rate	33.7	%	29.8	%	32.6	%

Deferred tax liabilities and assets are comprised of the following:



	2016			2015
Depreciation	$	362		$	306
Amortization	541			541
Other	23			17
Deferred tax liabilities	926			864
Benefits and compensation	266			298
Pension benefits	185			92
Tax loss carryforwards	37			44
Capital loss carryforwards	88			85
Other	113			101
Gross deferred tax assets	689			620
Deferred tax asset valuation allowance	(118		)	(122		)
Net deferred tax assets	571			498
Net deferred tax liability	$	355		$	366

A reconciliation of the activity related to unrecognized tax benefits follows:



	2016		2015			2014
Balance at beginning of year	$	58	$	71		$	61
Increases related to prior-year tax positions	2		9			—
Decreases related to prior-year tax positions	—		—			(1		)
Increases related to current-year tax positions	3		5			11
Settlements	—		(27		)	—
Lapse of statute	—		—			—
Balance at end of year	$	63	$	58		$	71