Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Components of Income Tax Expense

The provision for income taxes by taxing jurisdiction and by significant components consisted of the following:

($ in millions)	2019			2018			2017
Current
U.S. federal		$86			$7			$179
U.S. state and local	15			4			49
Foreign	296			297			349
Total current income tax expense		$397			$308			$577
Deferred
U.S. federal		($1	)		$44			$107
U.S. state and local	13			7			(16		)
Foreign	(17		)	(6		)	(53		)
Total deferred income tax expense		($5	)		$45			$38
Total income tax expense		$392			$353			$615

Reconciliation of Statutory U.S. Corporate Federal Income Tax Rate to Effective Income Tax Rate

A reconciliation of the statutory U.S. corporate federal income tax rate to the Company’s effective tax rate follows:

	2019		2018		2017
U.S. federal income tax rate	21.0	%	21.0	%	35.0	%
Changes in rate due to:
U.S. tax cost/(benefit) - Tax Cuts & Jobs Act	0.3		(2.5	)	11.0
U.S./foreign tax differential	2.9		3.3		(9.3	)
U.S. current tax benefit on foreign exchange realization	—		—		(4.9	)
U.S. tax incentives	(0.7	)	(1.0	)	(2.3	)
U.S. tax benefit on foreign dividends	(0.9	)	(0.4	)	(1.9	)
U.S. state and local taxes	1.3		0.5		1.1
U.S. deferred tax benefit on foreign income	—		—		(0.6	)
Other	(0.3	)	—		2.6
Effective income tax rate	23.6	%	20.9	%	30.7	%

Net deferred income tax assets and liabilities

($ in millions)	2019			2018
Deferred income tax assets related to
Employee benefits		$382			$366
Contingent and accrued liabilities	148			149
Operating loss and other carry-forwards	225			251
Inventories	4			7
Other	87			82
Valuation allowance	(158		)	(164		)
Total		$688			$691
Deferred income tax liabilities related to
Property		$277			$262
Intangibles	594			545
Employee benefits	65			46
Other	2			15
Total		$938			$868
Deferred income tax liabilities – net		($250	)		($177	)

Summary of Operating Loss Carryforwards

($ in millions)	2019		2018		Expiration
Available net operating loss carryforwards, Tax Effected:
Indefinite expiration		$157		$124	NA
Definite expiration	25		68		2020 - 2039
Total		$182		$192	NA
Income tax credit carryforwards		$59		$61	2020 - 2039

Unrecognized Tax Benefits

Interest and penalties

($ in millions)	2019		2018		2017
Accrued interest and penalties related to unrecognized tax benefits		$17		$16		$15
Loss recognized in income tax expense related to interest and penalties		$1		$2		$4

A reconciliation of the total amounts of unrecognized tax benefits (excluding interest and penalties) as of December 31 follows:

($ in millions)	2019			2018			2017
January 1		$166			$148			$94
Current year tax positions - additions	25			36			37
Prior year tax positions - additions	4			17			26
Prior year tax positions - reductions	(9		)	(6		)	—
Statute of limitations expirations	(6		)	(9		)	(8		)
Settlements	(12		)	(15		)	(10		)
Foreign currency translation	(1		)	(5		)	9
December 31		$167			$166			$148