INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Schedule of Income before Income Tax, Domestic and Foreign

Geographic Allocation of Income and Provision for Income Taxes on Continuing Operations
In millions	2019			2018			2017
Income (loss) from continuing operations before income taxes
Domestic 1	$	(1,196	)	$	745		$	(2,226	)
Foreign 2	(51		)	3,004			2,463
Income (loss) from continuing operations before income taxes	$	(1,247	)	$	3,749		$	237
Current tax expense (benefit)
Federal	$	(287	)	$	324		$	(864	)
State and local	25			13			4
Foreign	960			901			971
Total current tax expense	$	698		$	1,238		$	111
Deferred tax expense (benefit)
Federal 3	$	52		$	(318	)	$	1,499
State and local	19			(32		)	85
Foreign	(299		)	(79		)	(171		)
Total deferred tax expense (benefit)	$	(228	)	$	(429	)	$	1,413
Provision for income taxes on continuing operations	$	470		$	809		$	1,524
Income (loss) from continuing operations, net of tax	$	(1,717	)	$	2,940		$	(1,287	)

1. The 2019 amount includes approximately $1.4 billion of expense related to goodwill impairment and environmental matters. The 2017 amount includes approximately $1.4 billion of expense related to goodwill impairment and litigation settlements. See Notes 14 and 17 for additional information.

2. The 2019 amount includes approximately $1.8 billion of expense related to Sadara related charges. See Note 13 for additional information.

3.

The 2018 and 2017 amounts reflect the tax impact of The Act which accelerated the utilization of tax credits and required remeasurement of all U.S. deferred tax assets and liabilities.

Schedule of Effective Income Tax Rate Reconciliation

Reconciliation to U.S. Statutory Rate	2019		2018		2017
Statutory U.S. federal income tax rate	21.0	%	21.0	%	35.0	%
Equity earnings effect	(3.2	)	(3.3	)	(52.7	)
Foreign income taxed at rates other than the statutory U.S. federal income tax rate 1	(14.8	)	6.7		(61.2	)
U.S. tax effect of foreign earnings and dividends	1.9		(0.7	)	(8.4	)
Unrecognized tax benefits	1.0		0.2		13.5
Divestitures 2	—		0.8		142.0
Impact of tax reform 3	11.1		(3.4	)	367.8
Federal tax accrual adjustment 4	10.4		—		—
State and local income taxes	(4.4	)	0.4		11.4
Sadara related charges 5	(29.5	)	—		—
Goodwill impairment 6	(17.5	)	—		220.8
Excess tax benefits from stock-based compensation	1.2		(1.0	)	(39.7	)
Other - net	(14.9	)	0.9		14.5
Effective Tax Rate	(37.7	)%	21.6	%	643.0	%

1. Includes the impact of valuation allowances in foreign jurisdictions.

2. See Note 6 for additional information.

3. Includes the impact of tax reform in Switzerland and the U.S.

4. Primarily related to the favorable impact of the restoration of tax basis in assets, driven by a recent court judgment that did not involve the Company.

5. See Note 13 for additional information.

6. See Note 14 for additional information.

Schedule of Deferred Tax Assets and Liabilities

Deferred Tax Balances at Dec 31	2019					2018
In millions	Assets			Liabilities		Assets			Liabilities
Property	$	494		$	3,177	$	406		$	2,519
Tax loss and credit carryforwards	1,920			—		2,079			—
Postretirement benefit obligations	2,432			210		2,115			143
Other accruals and reserves	1,678			43		1,220			151
Intangibles	120			688		157			954
Inventory	28			234		53			239
Investments	125			48		190			84
Other – net	851			120		620			247
Subtotal	$	7,648		$	4,520	$	6,840		$	4,337
Valuation allowances	(1,262		)	—		(1,225		)	—
Total	$	6,386		$	4,520	$	5,615		$	4,337

Summary of Operating Loss Carryforwards

Operating Loss and Tax Credit Carryforwards at Dec 31	2019		2018
In millions	Assets		Assets
Operating loss carryforwards
Expire within 5 years	$	263	$	245
Expire after 5 years or indefinite expiration	1,133		1,196
Total operating loss carryforwards	$	1,396	$	1,441
Tax credit carryforwards
Expire within 5 years	$	32	$	32
Expire after 5 years or indefinite expiration	492		606
Total tax credit carryforwards	$	524	$	638
Total operating loss and tax credit carryforwards	$	1,920	$	2,079

Schedule of Total Gross Unrecognized Tax Benefits

The following table provides a reconciliation of the Company's unrecognized tax benefits:

Total Gross Unrecognized Tax Benefits
In millions	2019			2018			2017
Total unrecognized tax benefits at Jan 1	$	314		$	255		$	231
Decreases related to positions taken on items from prior years	(1		)	(8		)	(4		)
Increases related to positions taken on items from prior years	16			68			37
Increases related to positions taken in the current year	10			2			12
Settlement of uncertain tax positions with tax authorities	(19		)	—			(12		)
Decreases due to expiration of statutes of limitations	—			(1		)	(9		)
Foreign exchange gain	(1		)	(2		)	—
Total unrecognized tax benefits at Dec 31	$	319		$	314		$	255
Total unrecognized tax benefits that, if recognized, would impact the effective tax rate	$	234		$	235		$	245
Total amount of interest and penalties (benefit) recognized in "Provision for income taxes on continuing operations"	$	(11	)	$	(12	)	$	2
Total accrual for interest and penalties recognized in the consolidated balance sheets	$	100		$	109		$	110

Schedule of Tax Years Subject to Examination by Major Tax Jurisdiction

Tax years that remain subject to examination for the Company’s major tax jurisdictions are shown below:

Tax Years Subject to Examination by Major Tax Jurisdiction at Dec 31, 2019	Earliest Open Year
Jurisdiction
Argentina	2013
Brazil	2006
Canada	2012
China	2009
Germany	2010
Italy	2015
The Netherlands	2016
Switzerland	2016
United States:
Federal income tax	2004
State and local income tax	2004