XML 54 R39.htm IDEA: XBRL DOCUMENT

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2022

Schedule of Income before Income Tax, Domestic and Foreign

The following table summarizes income before income taxes:


	Years ended December 31,
In millions	2022		2021		2020

U.S. income	$	1,336	$	1,251	$	1,134
Foreign income	1,483		1,500		1,204
Income before income taxes	$	2,819	$	2,751	$	2,338

Schedule of Components of Income Tax Expense (Benefit)

Income tax expense (benefit) consisted of the following:


	Years ended December 31,
In millions	2022		2021		2020
Current
U.S. federal and state	$	425	$	261	$	162
Foreign	485		319		358

Total current income tax expense	910		580		520
Deferred
U.S. federal and state	(229)		(12)		2
Foreign	(45)		19		22
Impact of India tax law changes	—		—		(17)
Total deferred income tax (benefit) expense	(274)		7		7
Income tax expense	$	636	$	587	$	527

Schedule of Effective Income Tax Rate Reconciliation

A reconciliation of the statutory U.S. federal income tax rate to the effective tax rate was as follows:


	Years ended December 31,
	2022		2021		2020
Statutory U.S. federal income tax rate	21.0	%	21.0	%	21.0	%
State income tax, net of federal effect	1.3		1.1		1.0
Differences in rates and taxability of foreign subsidiaries and joint ventures	3.1		0.1		3.6
Research tax credits	(1.8)		(0.6)		(1.3)
Foreign derived intangible income	(2.0)		(1.0)		(1.2)
Impact of India tax law changes	—		—		(0.7)
Other, net	1.0		0.7		0.1
Effective tax rate	22.6	%	21.3	%	22.5	%

Schedule of Other Income Tax Adjustments

The India Tax Law Change resulted in the following adjustments to the Consolidated Statements of Net Income for the year ended December 31, 2020:




In millions	Favorable (Unfavorable)
Equity, royalty and interest income from investees	$	37
Income tax expense (1)	17
Less: Net income attributable to noncontrolling interests	(19)

Net income statement impact	$	35



(1) The adjustment to income tax expense includes $15 million of favorable discrete items.

Schedule of Deferred Tax Assets and Liabilities

Carryforward tax benefits and the tax effect of temporary differences between financial and tax reporting that give rise to net deferred tax assets (liabilities) were as follows:


	December 31,
In millions	2022		2021
Deferred tax assets
U.S. and state carryforward benefits	$	272	$	218
Foreign carryforward benefits	527		177
Employee benefit plans	258		254
Warranty expenses	458		445
Lease liabilities	110		108
Capitalized research and development expenditures	238		—
Accrued expenses	174		111
Other	126		74
Gross deferred tax assets	2,163		1,387
Valuation allowance	(704)		(360)
Total deferred tax assets	1,459		1,027
Deferred tax liabilities
Property, plant and equipment	(369)		(272)
Unremitted income of foreign subsidiaries and joint ventures	(210)		(197)
Employee benefit plans	(311)		(355)
Lease assets	(108)		(105)
Intangible assets	(435)		(44)
Other	(50)		(29)
Total deferred tax liabilities	(1,483)		(1,002)
Net deferred tax (liabilities) assets	$	(24)	$	25

Our Consolidated Balance Sheets contain the following tax related items:


	December 31,
In millions	2022		2021
Prepaid expenses and other current assets

Refundable income taxes	$	83	$	101
Other assets
Deferred income tax assets	625		428
Long-term refundable income taxes	14		—
Other accrued expenses
Income tax payable	173		107
Other liabilities
Long-term income taxes	192		263
Deferred income tax liabilities	649		403

Schedule of Unrecognized Tax Benefits Roll Forward

A reconciliation of unrecognized tax benefits for the years ended December 31, 2022, 2021 and 2020 was as follows:


	December 31,
In millions	2022		2021		2020
Balance at beginning of year	$	89	$	122	$	77
Additions to tax positions due to acquisitions	189		—		—
Additions to current year tax positions	17		11		9
Additions to prior years' tax positions	17		16		49
Reductions to prior years' tax positions	(1)		(28)		(13)
Reductions for tax positions due to settlements with taxing authorities	(28)		(32)		—

Balance at end of year	$	283	$	89	$	122