Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

The following table sets forth the geographic split of earnings before income taxes:

Significant components of income taxes are as follows:

¹ Includes the impact of the Tax Cuts and Jobs Act as discussed on page 88.

Significant components of deferred tax liabilities and assets are as follows:



	December 31, 2018			December 31, 2017
	(In millions)
Deferred tax liabilities
Property, plant, and equipment	$	1,074		$	1,079
Equity in earnings of affiliates	70			91
Debt exchange	81			83
Reserves and other accruals	25			4
Other	83			79
	$	1,333		$	1,336
Deferred tax assets
Pension and postretirement benefits	$	122		$	126
Stock compensation	55			52
Foreign tax loss carryforwards	313			254
Capital loss carryforwards	55			64
State tax attributes	74			78
Unrealized foreign currency losses	48			103
Reserves and other accruals	18			17
Other	56			40
Gross deferred tax assets	741			734
Valuation allowances	(289		)	(264		)
Net deferred tax assets	$	452		$	470

Net deferred tax liabilities	$	881		$	866

The net deferred tax liabilities are classified as follows:
Noncurrent assets (foreign)	$	186		$	187
Noncurrent liabilities	(929		)	(934		)
Noncurrent liabilities (foreign)	(138		)	(119		)
	$	(881	)	$	(866	)

Reconciliation of the statutory federal income tax rate to the Company’s effective income tax rate on earnings is as follows:



	Year Ended
	December 31
	2018		2017		2016

Statutory rate	21.0	%	35.0	%	35.0	%
State income taxes, net of federal tax benefit	0.3		1.7		1.4
Foreign earnings taxed at rates other than the U.S. statutory rate	(1.5	)	(4.7	)	(4.4	)
Foreign currency effects/remeasurement	(1.9	)	(0.7	)	2.2
Income tax adjustment to filed returns	(1.9	)	(3.0	)	0.8
Tax benefit on U.S. biodiesel credits	(2.3	)	—		(3.3	)
Tax benefit on U.S. qualified production activity deduction	—		(2.2	)	(1.4	)
Tax on global intangible low-taxed income	1.0		—		—
Tax benefit on foreign derived intangible income deduction	(1.0	)	—		—
U.S. tax reform impacts	(1.1	)	(23.9	)	—
Valuation allowances	—		0.3		0.6
Other	(0.7	)	(2.1	)	(1.6	)
Effective income tax rate	11.9	%	0.4	%	29.3	%

The following table sets forth a rollforward of activity of unrecognized tax benefits for the year ended December 31, 2018 and 2017 as follows:



	Unrecognized Tax Benefits
	December 31, 2018			December 31, 2017
	(In millions)
Beginning balance	$	56		$	55
Additions related to current year’s tax positions	3			—
Additions related to prior years’ tax positions	46			26
Additions related to acquisitions	7			—
Reductions related to lapse of statute of limitations	(2		)	(1		)
Settlements with tax authorities	(3		)	(24		)
Ending balance	$	107		$	56