Taxes on Income (Tables)

12 Months Ended

Dec. 31, 2017

Taxes on Income

Schedule of amount of earnings (loss) before income taxes

	Years Ended December 31,
($ in millions)	2017		2016		2015
U.S.	$	147	$	(381)	$	47
Foreign		367		506		299
	$	514	$	125	$	346

Schedule of provision (benefit) for income tax expense

	Years Ended December 31,
($ in millions)	2017		2016		2015
Current
U.S.	$	6	$	(3)	$	26
State and local		—		27		7
Foreign		77		143		76
Total current		83		167		109
Deferred
U.S.		92		(67)		(38)
State and local		7		(17)		(4)
Foreign		(17)		(209)		(20)
Total deferred		82		(293)		(62)
Tax provision (benefit)	$	165	$	(126)	$	47

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)	2017			2016			2015
Statutory U.S. federal income tax	$	180		$	44		$	121
Increase (decrease) due to:
Foreign tax rate differences including tax holidays		(52)			(71)			(51)
Foreign tax law and rate changes		(28)			—			—
U.S. tax reform (a)		83			—			—
Permanent differences on business dispositions		18			(62)			—
Foreign subsidiaries restructuring		—			(145)			—
Non-deductible transaction costs		—			52			—
U.S. state and local taxes, net		3			6			2
U.S. taxes on foreign earnings, net of tax deductions and credits		(6)			21			2
U.S. manufacturing deduction		(8)			—			(4)
U.S. research and development tax credits		(9)			(9)			(15)
Uncertain tax positions, including interest		(3)			3			(4)
Company and trust-owned life insurance		(7)			(6)			(2)
Change in valuation allowances		15			46			—
Benefit from equity compensation		(16)			(5)			—
Other, net		(5)			—			(2)
Provision (benefit) for taxes	$	165		$	(126)		$	47
Effective tax rate expressed as a percentage of pretax earnings		32.1	%		(100.8)	%		13.6	%

Schedule of significant components of deferred tax assets and liabilities

	December 31,
($ in millions)	2017		2016
Deferred tax assets:
Deferred compensation	$	71	$	110
Accrued employee benefits		104		188
Deferred revenue		14		34
Accrued pensions		164		228
Inventory and other reserves		42		87
Net operating losses, foreign tax credits and other tax attributes		369		425
Unrealized losses on currency exchange and derivative transactions		5		59
Goodwill and other intangible assets		98		100
Other		30		64
Total deferred tax assets		897		1,295
Valuation allowance		(165)		(183)
Net deferred tax assets		732		1,112
Deferred tax liabilities:
Property, plant and equipment		(334)		(428)
Goodwill and other intangible assets		(697)		(590)
Pension assets		(56)		—
Other		(15)		(90)
Total deferred tax liabilities		(1,102)		(1,108)
Net deferred tax asset (liability)	$	(370)	$	4

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

	December 31,
($ in millions)	2017		2016
Other assets	$	325	$	443
Deferred taxes and other liabilities		(695)		(439)
Net deferred tax asset (liability)	$	(370)	$	4

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

($ in millions)	2017		2016		2015
Balance at January 1	$	77	$	51	$	66
Additions related to acquisitions		—		55		—
Additions based on tax positions related to the current year		18		18		1
Additions for tax positions of prior years		1		6		2
Reductions related to Divestment Business		—		(30)		—
Reductions for tax positions from prior years		—		(5)		—
Reductions for settlements		(7)		—		(8)
Reductions due to lapse of statute of limitations		(12)		(16)		(6)
Effect of foreign currency exchange rates		7		(2)		(4)
Balance at December 31	$	84	$	77	$	51