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Taxes on Earnings from Continuing Operations (Tables)

12 Months Ended

Dec. 31, 2022

Schedule of Earnings from Continuing Operations Before Taxes

Earnings from continuing operations before taxes, and the related provisions for taxes on earnings from continuing operations, were as follows:


(in millions)	2022		2021		2020
Earnings From Continuing Operations Before Taxes:
Domestic	$	3,732	$	3,264	$	1,588
Foreign	4,574		4,947		3,380
Total	$	8,306	$	8,211	$	4,968

Schedule of Provisions for Taxes on Earnings from Continuing Operations


(in millions)	2022		2021		2020
Taxes on Earnings From Continuing Operations:
Current:
Domestic	$	1,309	$	859	$	39
Foreign	723		790		566
Total current	2,032		1,649		605
Deferred:
Domestic	(610)		(355)		(18)
Foreign	(49)		(154)		(90)
Total deferred	(659)		(509)		(108)
Total	$	1,373	$	1,140	$	497

Schedule of Reconciliation of Income Tax Rate and U.S. Statutory Tax Rate to Income Tax Expense (Benefit)

Differences between the effective income tax rate and the U.S. statutory tax rate were as follows:


	2022		2021		2020
Statutory tax rate on earnings from continuing operations	21.0	%	21.0	%	21.0	%
Impact of foreign operations	(2.5)		(3.9)		(3.3)
Impact of TCJA and other related items	—		—		0.5
Foreign-derived intangible income benefit	(2.0)		(1.1)		(1.0)
Domestic impairment loss	—		(0.1)		(2.7)
Excess tax benefits related to stock compensation	(0.5)		(1.7)		(1.9)
Research tax credit	(0.9)		(0.6)		(1.0)
Resolution of certain tax positions pertaining to prior years	0.2		(0.7)		(2.8)
Intercompany restructurings and integration	—		0.1		0.5
State taxes, net of federal benefit	0.7		0.4		0.5
All other, net	0.5		0.5		0.2
Effective tax rate on earnings from continuing operations	16.5	%	13.9	%	10.0	%

Schedule of Components of Net Deferred Tax Assets and Liabilities

The tax effect of the differences that give rise to deferred tax assets and liabilities were as follows:


(in millions)	2022		2021
Deferred tax assets:
Compensation and employee benefits	$	230	$	618
Other, primarily reserves not currently deductible, and NOL’s and credit carryforwards	2,402		2,444
Trade receivable reserves	227		206
Research and development costs	319		—
Inventory reserves	187		169
Lease liabilities	263		273
Deferred intercompany profit	260		261
Total deferred tax assets before valuation allowance	3,888		3,971
Valuation allowance	(1,169)		(1,199)
Total deferred tax assets	2,719		2,772
Deferred tax liabilities:
Depreciation	(376)		(330)
Right of Use lease assets	(252)		(264)
Other, primarily the excess of book basis over tax basis of intangible assets	(2,038)		(2,364)
Total deferred tax liabilities	(2,666)		(2,958)
Total net deferred tax assets (liabilities)	$	53	$	(186)

Schedule of Reconciliation of Unrecognized Tax Benefits for the Period

The following table summarizes the gross amounts of unrecognized tax benefits without regard to reduction in tax liabilities or additions to deferred tax assets and liabilities if such unrecognized tax benefits were settled:


(in millions)	2022		2021
January 1	$	1,908	$	1,210
Increase due to current year tax positions	154		143
Increase due to prior year tax positions	108		748
Decrease due to prior year tax positions	(115)		(119)
Settlements	3		(35)
Lapse of statute	(22)		(39)
December 31	$	2,036	$	1,908