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Income taxes (Tables)
 12 Months Ended
Dec. 31, 2018
Income Tax Disclosure [Abstract]  
Reconciliation of the U.S. federal statutory rate to effective rate
Reconciliation of the U.S. federal statutory rate to effective rate:

 
 
Years ended December 31,
(Millions of dollars)
 
2018
 
2017
 
2016
Taxes at U.S. statutory rate
 
$
1,643

 
21.0
 %
 
$
1,429

 
35.0
 %
 
$
49

 
35.0
 %
(Decreases) increases resulting from:
 
 

 
 

 
 

 
 

 
 

 
 

Non-U.S. subsidiaries taxed at other than the U.S. rate
 
282

 
3.6
 %
 
(282
)
 
(6.9
)%
 
(119
)
 
(85.6
)%
State and local taxes, net of federal 1
 
22

 
0.3
 %
 
27

 
0.7
 %
 
(1
)
 
(0.7
)%
Interest and penalties, net of tax
 
33

 
0.4
 %
 
28

 
0.7
 %
 
24

 
17.2
 %
U.S. tax incentives
 
(106
)
 
(1.3
)%
 
(52
)
 
(1.3
)%
 
(52
)
 
(37.4
)%
ESOP dividend tax benefit
 
(12
)
 
(0.2
)%
 
(21
)
 
(0.5
)%
 
(27
)
 
(19.4
)%
Net excess tax benefits from stock-based compensation
 
(56
)
 
(0.7
)%
 
(64
)
 
(1.6
)%
 
—

 
—
 %
U.S. deferred tax rate change
 
(154
)
 
(2.0
)%
 
596

 
14.6
 %
 
—

 
—
 %
Mandatory deemed repatriation of non-U.S. earnings
 
50

 
0.7
 %
 
1,775

 
43.5
 %
 
—

 
—
 %
Valuation allowances
 
(29
)
 
(0.4
)%
 
(111
)
 
(2.7
)%
 
141

 
101.4
 %
Nondeductible goodwill 2
 
—

 
—
 %
 
—

 
—
 %
 
191

 
137.4
 %
Other—net
 
25

 
0.3
 %
 
14

 
0.3
 %
 
(14
)
 
(10.1
)%
Provision (benefit) for income taxes
 
$
1,698

 
21.7
 %
 
$
3,339

 
81.8
 %
 
$
192

 
137.8
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
1 Excludes amounts included in valuation allowances and mandatory deemed repatriation of non-U.S. earnings.
 
 
2 Portion of Surface Mining & Technology goodwill impairment not deductible for tax purposes. See Note 10 for further discussion.
Components of profit (loss) before taxes
The components of profit (loss) before taxes were: 
 
 
 
 
 
 
 
 
Years ended December 31,
(Millions of dollars)
 
2018
 
2017
 
2016
U.S.
 
$
2,131

 
$
240

 
$
(2,053
)
Non-U.S.
 
5,691

 
3,842

 
2,192

 
 
$
7,822

 
$
4,082

 
$
139

 
 
 
 
 
 
 
Components of the provision (benefit) for income taxes
The components of the provision (benefit) for income taxes were:
 
 
 
 
 
 
 
 
Years ended December 31,
(Millions of dollars)
 
2018
 
2017
 
2016
Current tax provision (benefit):
 
 

 
 

 
 

U.S.1
 
$
179

 
$
963

 
$
(90
)
Non-U.S.
 
1,291

 
1,124

 
718

State (U.S.)
 
8

 
39

 
(5
)
 
 
1,478

 
2,126

 
623

 
 
 
 
 
 
 
Deferred tax provision (benefit):
 
 

 
 

 
 

U.S.1
 
298

 
1,385

 
(544
)
Non-U.S.
 
4

 
(17
)
 
(108
)
State (U.S.)
 
(82
)
 
(155
)
 
221

 
 
220

 
1,213

 
(431
)
Total provision (benefit) for income taxes
 
$
1,698

 
$
3,339

 
$
192

1 Includes U.S. taxes related to non-U.S. earnings. We account for U.S. taxes on global intangible low-taxed income as a period cost.
 
Deferred income tax assets and liabilities
The amount of deferred income taxes at December 31, included on the following lines in Statement 3, are as follows:
 
 
 
December 31,
(Millions of dollars)
 
2018
 
2017
Assets:
 
 

 
 

Noncurrent deferred and refundable income taxes
 
$
1,363

 
$
1,569

Liabilities:
 
 

 
 

Other liabilities
 
331

 
281

Deferred income taxes—net
 
$
1,032

 
$
1,288

 
 
 
 
 
 
Deferred income tax assets and liabilities:
 
 
 
 
 
 
December 31,
(Millions of dollars)
 
2018
 
2017
Deferred income tax assets:
 
 

 
 

Tax carryforwards
 
$
1,312

 
$
1,286

Pension
 
785

 
980

Postemployment benefits other than pensions
 
793

 
841

Warranty reserves
 
237

 
226

Stock-based compensation
 
121

 
135

Allowance for credit losses
 
155

 
149

Post sale discounts
 
158

 
160

Other employee compensation and benefits
 
186

 
203

Other—net
 
298

 
302

 
 
4,045

 
4,282

 
 
 
 
 
Deferred income tax liabilities:
 
 

 
 

Capital and intangible assets
 
(1,381
)
 
(1,360
)
Bond discount
 
(127
)
 
(133
)
Translation
 
(190
)
 
(165
)
Other outside basis differences
 
(271
)
 
(205
)
Undistributed profits of non-U.S. subsidiaries
 
(129
)
 
(138
)
 
 
(2,098
)
 
(2,001
)
Valuation allowance for deferred tax assets
 
(915
)
 
(993
)
Deferred income taxes—net
 
$
1,032

 
$
1,288

 
 
 
 
 
 
Summary of net operating loss carryforwards
At December 31, 2018, amounts and expiration dates of net operating loss carryforwards in various non-U.S. taxing jurisdictions were:
 
(Millions of dollars)
2019
 
2020
 
2021
 
2022-2024
 
2025-2039
 
Unlimited
 
Total
$
23

 
$
124

 
$
92

 
$
147

 
$
506

 
$
3,597

 
$
4,489

 
Reconciliation of unrecognized tax benefits
Reconciliation of unrecognized tax benefits: 1
 
 
 
 
 
 
 
 
Years ended December 31,
(Millions of dollars)
 
2018
 
2017
 
2016
Balance at January 1,
 
$
1,286

 
$
1,032

 
$
968

 
 
 
 
 
 
 
Additions for tax positions related to current year
 
61

 
270

 
73

Additions for tax positions related to prior years
 
461

 
20

 
55

Reductions for tax positions related to prior years
 
(5
)
 
(27
)
 
(36
)
Reductions for settlements 2 
 
(6
)
 
(9
)
 
(24
)
Reductions for expiration of statute of limitations
 
(1
)
 
—

 
(4
)
 
 
 
 
 
 
 
Balance at December 31,
 
$
1,796

 
$
1,286

 
$
1,032

 
 
 
 
 
 
 
Amount that, if recognized, would impact the effective tax rate
 
$
1,716

 
$
1,209

 
$
963


1 
Foreign currency impacts are included within each line as applicable.
2 
Includes cash payment or other reduction of assets to settle liability.