Taxes (Tables)

12 Months Ended

Dec. 31, 2015

Taxes

Income before income taxes

($ in millions)
For the year ended December 31:		2015		2014		2013
Income from continuing operations before income taxes
	U.S. operations	$	5,915	$	7,509	$	7,577
	Non-U.S. operations		10,030		12,477		12,667
Total income from continuing operations before income taxes		$	15,945	$	19,986	$	20,244

Provision for income taxes by geographic operations

The income from continuing operations provision for income taxes by geographic operations is as follows:
($ in millions)
For the year ended December 31:	2015		2014		2013
U.S. operations	$	849	$	2,093	$	1,315
Non-U.S. operations		1,732		2,141		2,048
Total continuing operations provision for income taxes	$	2,581	$	4,234	$	3,363

Components of the provision for income taxes by taxing jurisdiction

The components of the income from continuing operations provision for income taxes by taxing jurisdiction are as follows:
($ in millions)
For the year ended December 31:		2015		2014		2013
U.S. federal
	Current	$	(321)	$	1,134	$	1,694
	Deferred		553		105		(708)
			232		1,239		986
U.S. state and local
	Current		128		541		277
	Deferred		116		(105)		(330)
			244		436		(53)
Non-U.S.
	Current		2,101		2,825		3,067
	Deferred		4		(266)		(637)
			2,105		2,559		2,430
Total continuing operations provision for income taxes			2,581		4,234		3,363
Discontinued operations provision for income taxes			(117)		(1,617)		(322)
Provision for social security, real estate, personal property
	and other taxes		3,497		4,068		4,198
Total taxes included in net income		$	5,961	$	6,685	$	7,238

Effective income tax rate reconciliation

A reconciliation of the statutory U.S. federal tax rate to the company’s effective tax rate from continuing operations is as
follows:
For the year ended December 31:	2015		2014		2013
Statutory rate	35	%	35	%	35	%
Foreign tax differential	(17)		(14)		(13)
State and local	1		1		0
Domestic incentives	(2)		(2)		(3)
Other	(1)		1		(2)
Effective rate	16	%	21	%	17	%

Components of deferred tax assets/liabilities

Deferred Tax Assets
($ in millions)
At December 31:	2015		2014
Retirement benefits	$	4,621	$	4,795
Share-based and other compensation		963		1,328
Domestic tax loss/credit carryforwards		1,066		858
Deferred income		762		957
Foreign tax loss/credit carryforwards		825		686
Bad debt, inventory and warranty reserves		528		529
Depreciation		329		329
Accruals		904		1,176
Other		931		1,306
Gross deferred tax assets		10,929		11,964
Less: valuation allowance		740		646
Net deferred tax assets	$	10,189	$	11,318

Deferred Tax Liabilities
($ in millions)
At December 31:	2015		2014
Depreciation	$	919	$	487
Retirement benefits		252		205
Goodwill and intangible assets		1,407		1,263
Leases		916		912
Software development costs		554		421
Deferred transition costs		395		374
Other		1,177		1,111
Gross deferred tax liabilities	$	5,620	$	4,773

Reconciliation of the beginning and ending amount of unrecognized tax benefits

($ in millions)
		2015		2014		2013
Balance at January 1		$	5,104	$	4,458	$	5,672
Additions based on tax positions related to the current year			464		697		829
Additions for tax positions of prior years			569		586		417
Reductions for tax positions of prior years (including
	impacts due to a lapse in statute)		(1,348)		(579)		(2,201)
Settlements			(215)		(58)		(259)
Balance at December 31		$	4,574	$	5,104	$	4,458