Taxes on Income (Tables)

12 Months Ended

Dec. 31, 2016

Taxes on Income

Schedule of amount of earnings (loss) before income taxes

	Years Ended December 31,
($ in millions)	2016		2015		2014
U.S.	$	(381)	$	47	$	280
Foreign		506		299		366
	$	125	$	346	$	646

Schedule of provision (benefit) for income tax expense

	Years Ended December 31,
($ in millions)	2016		2015		2014
Current
U.S.	$	(3)	$	26	$	51
State and local		27		7		18
Foreign		143		76		69
Total current		167		109		138
Deferred
U.S.		(67)		(38)		9
State and local		(17)		(4)		(1)
Foreign		(209)		(20)		4
Total deferred		(293)		(62)		12
Tax provision (benefit)	$	(126)	$	47	$	150

Schedule of income tax provision recorded within the consolidated statements of earnings which differ from the provisions determined by applying the U.S. statutory tax rate to pretax earnings

	Years Ended December 31,
($ in millions)	2016			2015			2014
Statutory U.S. federal income tax	$	44		$	121		$	226
Increase (decrease) due to:
Foreign tax rate differences including tax holidays		(71)			(51)			(57)
Permanent differences on business dispositions		(62)			—			—
Foreign subsidiaries restructuring		(145)			—			—
Non-deductible transaction costs		52			—			—
U.S. state and local taxes, net		6			2			7
U.S. taxes on foreign earnings, net of tax deductions and credits		21			2			12
U.S. manufacturing deduction		—			(4)			(7)
U.S. research and development tax credits		(9)			(15)			(9)
Uncertain tax positions, including interest		3			(4)			(8)
Company and trust-owned life insurance		(6)			(2)			(5)
Change in valuation allowances		46			—			—
Benefit from foreign equity compensation		(5)			—			—
Other, net		—			(2)			(9)
Provision (benefit) for taxes	$	(126)		$	47		$	150
Effective tax rate expressed as a percentage of pretax earnings		(100.8)	%		13.6	%		23.2	%

Schedule of significant components of deferred tax assets and liabilities

	December 31,
($ in millions)	2016		2015
Deferred tax assets:
Deferred compensation	$	110	$	110
Accrued employee benefits		188		113
Deferred revenue		34		—
Accrued pensions		228		177
Inventory and other reserves		87		21
Net operating losses, foreign tax credits and other tax attributes		425		105
Unrealized losses on currency exchange and derivative transactions		59		57
Goodwill and other intangible assets		100		—
Transaction costs		—		34
Other		64		35
Total deferred tax assets		1,295		652
Valuation allowance		(183)		(90)
Net deferred tax assets		1,112		562
Deferred tax liabilities:
Property, plant and equipment		(428)		(267)
Goodwill and other intangible assets		(590)		(155)
Other		(90)		(17)
Total deferred tax liabilities		(1,108)		(439)
Net deferred tax asset (liability)	$	4	$	123

Schedule of net deferred tax asset (liability) included in consolidated balance sheets

	December 31,
($ in millions)	2016		2015
Other current assets	$	—	$	96
Other assets		443		60
Other current liabilities		—		(3)
Deferred taxes and other liabilities		(439)		(30)
Net deferred tax asset	$	4	$	123

Roll forward of unrecognized tax benefits related to uncertain income tax positions

($ in millions)	2016		2015		2014
Balance at January 1	$	51	$	66	$	78
Additions related to acquisitions		55		—		—
Additions based on tax positions related to the current year		18		1		1
Additions for tax positions of prior years		6		2		8
Reductions related to Divestment Business		(30)		—		—
Reductions for tax positions from prior years		(5)		—		—
Reductions for settlements		—		(8)		—
Reductions due to lapse of statute of limitations		(16)		(6)		(16)
Effect of foreign currency exchange rates		(2)		(4)		(5)
Balance at December 31	$	77	$	51	$	66