Taxes on Income (Tables)

12 Months Ended

Dec. 31, 2019

Taxes on Income

Schedule of amount of earnings (loss) before income taxes

	Years Ended December 31,
($ in millions)	2019		2018		2017
U.S.	$	224	$	193	$	147
Foreign		384		440		367
	$	608	$	633	$	514

Schedule of provision (benefit) for income tax expense

	Years Ended December 31,
($ in millions)	2019		2018		2017
Current
U.S.	$	(1)	$	30	$	6
State and local		7		5		—
Foreign		110		115		77
Total current		116		150		83
Deferred
U.S.		(26)		21		92
State and local		(1)		9		7
Foreign		(18)		5		(17)
Total deferred		(45)		35		82
Tax provision (benefit)	$	71	$	185	$	165

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)	2019			2018			2017
Statutory U.S. federal income tax	$	128		$	133		$	180
Increase (decrease) due to:
Foreign tax rate differences including tax holidays		(11)			(11)			(52)
Foreign tax law and rate changes		—			—			(28)
U.S. tax reform (a)		—			(45)			83
Foreign exchange loss on revaluation of Brazilian deferred tax balances		4			26			—
Global intangible low-taxed income (GILTI)		12			15			—
Permanent differences on business dispositions		(3)			56			18
U.S. state and local taxes, net		4			13			3
U.S. taxes on foreign earnings, net of tax deductions and credits		(6)			(9)			(6)
U.S. manufacturing deduction		—			—			(8)
U.S. research and development tax credits		(10)			(7)			(9)
Uncertain tax positions, including interest		(19)			(1)			(3)
Change in valuation allowances		24			31			15
Equity compensation related impacts		(43)			(14)			(16)
Other, net		(9)			(2)			(12)
Provision (benefit) for taxes	$	71		$	185		$	165
Effective tax rate expressed as a percentage of pretax earnings		11.7	%		29.2	%		32.1	%

(a) Includes 2018 adjustments required to record the final impact of the implications of the U.S. Tax Cuts and Jobs Act signed into law in 2017.

Schedule of significant components of deferred tax assets and liabilities

	December 31,
($ in millions)	2019		2018
Deferred tax assets:
Deferred compensation	$	90	$	73
Accrued employee benefits		93		100
Accrued pensions		190		179
Inventory and other reserves		42		41
Net operating losses, foreign tax credits and other tax attributes		408		390
Unrealized losses on currency exchange and derivative transactions		6		26
Goodwill and other intangible assets		54		64
Other		168		110
Total deferred tax assets		1,051		983
Valuation allowance		(244)		(224)
Net deferred tax assets		807		759
Deferred tax liabilities:
Property, plant and equipment		(330)		(336)
Goodwill and other intangible assets		(586)		(621)
Pension assets		(74)		(90)
Other		(137)		(120)
Total deferred tax liabilities		(1,127)		(1,167)
Net deferred tax asset (liability)	$	(320)	$	(408)

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

	December 31,
($ in millions)	2019		2018
Other assets	$	241	$	237
Deferred taxes		(561)		(645)
Net deferred tax asset (liability)	$	(320)	$	(408)

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

($ in millions)	2019		2018		2017
Balance at January 1	$	80	$	84	$	77
Additions based on tax positions related to the current year		—		14		18
Additions for tax positions of prior years		—		—		1
Reductions for tax positions from prior years		—		(4)		—
Reductions for settlements		—		—		(7)
Reductions due to lapse of statute of limitations		(16)		(10)		(12)
Effect of foreign currency exchange rates		(1)		(4)		7
Balance at December 31	$	63	$	80	$	84