Income Taxes (Tables)

12 Months Ended

Dec. 31, 2016

Schedule of Components of Income Tax Expense (Benefit)

The following table presents the components of income tax expense (benefit) for the years ended December 31:



(In millions)	2016			2015			2014
Current:
Federal	$	(14	)	$	52		$	59
State	30			92			39
Non-U.S.	320			342			257
Total current expense	336			486			355
Deferred:
Federal	(311		)	(39		)	38
State	38			40			10
Non-U.S.	(85		)	(169		)	12
Total deferred (benefit) expense	(358		)	(168		)	60
Total income tax expense (benefit)	$	(22	)	$	318		$	415

Schedule of Deferred Tax Assets and Liabilities

The following table presents significant components of our gross deferred tax assets and gross deferred tax liabilities as of December 31:



(In millions)	2016			2015
Deferred tax assets:
Unrealized losses on investment securities, net	$	157		$	57
Deferred compensation	285			167
Defined benefit pension plan	116			143
Restructuring charges and other reserves	199			383
Foreign currency translation	225			155
Tax credit carryforwards	425			—
Other	105			32
Total deferred tax assets	1,512			937
Valuation allowance for deferred tax assets	(66		)	(27		)
Deferred tax assets, net of valuation allowance	$	1,446		$	910
Deferred tax liabilities:
Leveraged lease financing	$	313		$	334
Fixed and intangible assets	886			804
Non-U.S. earnings	164			265
Other	120			121
Total deferred tax liabilities	$	1,483		$	1,524

Schedule of Effective Income Tax Rate Reconciliation

The following table presents a reconciliation of the U.S. statutory income tax rate to our effective tax rate based on income before income tax expense for the years ended December 31:



	2016		2015		2014
U.S. federal income tax rate	35.0	%	35.0	%	35.0	%
Changes from statutory rate:
State taxes, net of federal benefit	2.0		4.2		1.5
Tax-exempt income	(6.1	)	(5.6	)	(5.1	)
Business tax credits⁽¹⁾	(13.6	)	(9.4	)	(6.8	)
Foreign tax differential	(7.7	)	(9.6	)	(8.5	)
Foreign designated earnings	(6.8	)	—		—
Foreign capital transactions	(4.3	)	—		—
Tax refund	—		(2.8	)	—
Litigation expense	1.4		2.7		1.3
Other, net	(0.9	)	(0.7	)	(0.3	)
Effective tax rate	(1.0	)%	13.8	%	17.1	%

⁽¹⁾ Business tax credits include low-income housing, production and investment tax credits.

Summary of Income Tax Contingencies

The following table presents activity related to unrecognized tax benefits as of December 31:



(In millions)	2016			2015
Beginning balance	$	63		$	163
Decrease related to agreements with tax authorities	(13		)	(122		)
Increase related to tax positions taken during current year	7			8
Increase related to tax positions taken during prior year	14			14
Ending balance	$	71		$	63