INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2021

The income tax expense (benefit) for the year ended December 31, 2021 is as follows (in millions):


	Current		Deferred		Total
International	$	665	$	(103)	$	562
U.S. Federal	68		(323)		(255)
U.S. State	12		(19)		(7)
Total	$	745	$	(445)	$	300

The income tax expense (benefit) for the year ended December 31, 2020 is as follows (in millions):


	Current		Deferred		Total
International	$	320	$	(62)	$	258
U.S. Federal	(9)		296		287
U.S. State	(16)		(21)		(37)
Total	$	295	$	213	$	508

The income tax expense (benefit) for the year ended December 31, 2019 is as follows (in millions):


	Current		Deferred		Total
International	$	915	$	(12)	$	903
U.S. Federal	22		166		188
U.S. State	34		(32)		2
Total	$	971	$	122	$	1,093

Tax effects of temporary differences that give rise to significant portions of deterred tax assets and liabilities

The tax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities at December 31, 2021 and 2020 are as follows (in millions):


	2021		2020
Deferred tax assets/(liabilities):
Net operating loss carryforward — U.S.	$	88	$	67
Net operating loss carryforward — International	137		81
Accrued expenses	50		47
Stock-based compensation and other stock based payments	50		40
Foreign currency translation adjustment	48		29
Tax credits	19		9
Euro-denominated debt	—		77
Operating lease liabilities	38		43
Property and equipment	95		11
Other	11		—
Subtotal - deferred tax assets	536		404

Discount on convertible notes	(20)		(29)
Intangible assets and other	(192)		(119)
Euro-denominated debt	(20)		—

State income tax on accumulated unremitted international earnings	(8)		(5)
Unrealized gains on investments	(417)		(550)
Operating lease assets	(37)		(38)
Installment sale liability	(156)		(263)
Other	—		(14)
Subtotal - deferred tax liabilities	(850)		(1,018)
Valuation allowance on deferred tax assets	(37)		(58)
Net deferred tax liabilities (1)	$	(351)	$	(672)

(1) Includes deferred tax assets of $554 million and $455 million at December 31, 2021 and 2020, respectively, reported in "Other assets, net" in the Consolidated Balance Sheets.

Schedule of effective income tax rate reconciliation

The effective income tax rate of the Company is different from the amount computed using the expected U.S. statutory federal rate of 21% for the years ended December 31, 2021, 2020, and 2019 as a result of the following items (in millions):


	2021		2020		2019
Income tax expense at U.S. federal statutory rate	$	308	$	119	$	1,251
Adjustment due to:
Foreign rate differential	137		55		210
Innovation Box Tax benefit	(230)		(79)		(443)
Goodwill impairment	—		228		—
Stock-based compensation	37		32		23
Federal GILTI	17		73		36
State income tax (benefit) expense	(6)		(31)		9
Valuation allowance	(19)		36		1
Uncertain tax positions	39		64		11
Tax Act - U.S. transition tax benefit and other transition impacts	—		(8)		(17)
Other	17		19		12
Income tax expense	$	300	$	508	$	1,093

Reconciliation of unrecognized tax benefits

The following is a reconciliation of the total beginning and ending amount of unrecognized tax benefits (in millions):


	2021		2020		2019
Unrecognized tax benefit — January 1	$	84	$	56	$	45
Gross increases — tax positions in current period	14		2		3
Gross increases — tax positions in prior periods	44		48		11
Gross decreases — tax positions in prior periods	(19)		(11)		(3)

Reduction due to settlements during the current period	(3)		(11)		—
Unrecognized tax benefit — December 31	$	120	$	84	$	56