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EIDP Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Geographic Allocation of Income and Provision for Income Taxes


Geographic Allocation of Income (Loss) and Provision for (Benefit from) Income Taxes	For the Year Ended December 31,
(In millions)	2023		2022		2021
Income (loss) from continuing operations before income taxes
Domestic	$	(414)	$	(1)	$	941
Foreign	1,507		1,427		1,405
Income (loss) from continuing operations before income taxes	$	1,093	$	1,426	$	2,346
Current tax expense (benefit)
Federal	$	143	$	65	$	(13)
State and local	40		21		6
Foreign	407		403		329
Total current tax expense (benefit)	$	590	$	489	$	322
Deferred tax expense (benefit)
Federal	$	(326)	$	(170)	$	164
State and local	(50)		(39)		55
Foreign	(62)		(70)		(17)
Total deferred tax expense (benefit)	$	(438)	$	(279)	$	202
Provision for (benefit from) income taxes on continuing operations	152		210		524
Net income (loss) from continuing operations after taxes	$	941	$	1,216	$	1,822

Reconciliation to US Statutory Rate


Reconciliation to U.S. Statutory Rate	For the Year Ended December 31,
	2023		2022		2021
Statutory U.S. federal income tax rate	21.0	%	21.0	%	21.0	%
Effective tax rates on international operations - net1	(1.8)		(3.5)		(2.5)
Acquisitions, divestitures and ownership restructuring activities2	3.6		(5.4)		(0.1)
U.S. research and development credit	(5.9)		(2.2)		(2.4)
Exchange gains/losses3	2.0		3.7		1.9
State and local incomes taxes - net	0.9		0.3		2.1
Impact of Swiss Tax Changes4	(7.9)		—		0.2
Excess tax benefits/deficiencies from stock compensation	(0.5)		(0.7)		(0.2)
Tax settlements and expiration of statute of limitations	(0.3)		0.1		—

Repatriation of foreign earnings5	2.9		1.7		1.0
Other – net	(0.1)		(0.3)		1.3
Effective tax rate on income from continuing operations	13.9	%	14.7	%	22.3	%

1. Includes the effects of local and U.S. taxes related to earnings of non-U.S. subsidiaries, changes in the amount of unrecognized tax benefits associated with these earnings, losses at non-U.S. subsidiaries without local tax benefits due to valuation allowances, and other permanent differences between tax and U.S. GAAP results. Includes a tax benefit of $(36) million for the year ended December 31, 2022, relating to the release of a valuation allowance recorded against the net deferred tax asset position of a legal entity in Brazil.

2. Includes net tax charge of $46 million for the year ended December 31, 2023, associated with intellectual property realignment. Includes net tax benefits of $(55) million and $(42) million for the year ended December 31, 2022, related to deferred tax assets established upon change in a U.S. entity's tax characterization, and a worthless stock deduction on Company's investment in a subsidiary after a change in the entity's legal structure, respectively.

3. Principally reflects the impact of foreign exchange gains and losses on net monetary assets for which no corresponding tax impact is realized. Further information about the company's foreign currency hedging program is included in Note 7 - Supplementary Information, and Note 20 - Financial Instruments, under the heading Foreign Currency Risk.

4. Includes net tax benefits of $(62) million and $(24) million for the year ended December 31, 2023, related to changes in deferred taxes and a tax currency change, respectively.

5. Includes the effect of withholding tax on distribution of foreign earnings to the U.S., net of U.S. foreign tax credits.

EIDP

Geographic Allocation of Income and Provision for Income Taxes


Geographic Allocation of Income (Loss) and Provision for (Benefit from) Income Taxes	For the Year Ended December 31,
(In millions)	2023		2022		2021
Income (loss) from continuing operations before income taxes
Domestic	$	(434)	$	(46)	$	892
Foreign	1,507		1,427		1,404
Income (loss) from continuing operations before income taxes	$	1,073	$	1,381	$	2,296
Current tax expense (benefit)
Federal	$	138	$	56	$	(23)
State and local	40		19		4
Foreign	407		403		329
Total current tax expense (benefit)	$	585	$	478	$	310
Deferred tax expense (benefit)
Federal	$	(326)	$	(170)	$	164
State and local	(50)		(39)		55
Foreign	(62)		(70)		(17)
Total deferred tax expense (benefit)	$	(438)	$	(279)	$	202
Provision for (benefit from) income taxes on continuing operations	147		199		512
Net income (loss) from continuing operations	$	926	$	1,182	$	1,784

Reconciliation to US Statutory Rate


Reconciliation to U.S. Statutory Rate	For the Year Ended December 31,
	2023		2022		2021
Statutory U.S. federal income tax rate	21.0	%	21.0	%	21.0	%
Effective tax rates on international operations - net1	(1.9)		(3.6)		(2.6)
Acquisitions, divestitures and ownership restructuring activities2	3.6		(5.5)		(0.1)
U.S. research and development credit	(6.0)		(2.3)		(2.5)
Exchange gains/losses3	2.0		3.8		1.9
State and local income taxes - net	0.9		0.2		2.2
Impact of Swiss Tax Changes4	(8.0)		—		0.2
Excess tax benefits/deficiencies from stock compensation	(0.6)		(0.7)		(0.2)
Tax settlements and expiration of statute of limitations	(0.4)		0.1		—
Repatriation of foreign earnings5	2.9		1.7		1.0
Other – net	0.2		(0.3)		1.3
Effective tax rate	13.7	%	14.4	%	22.2	%

2. Includes a tax charge of $46 million for the year ended December 31, 2023 associated with intellectual property realignment. Includes net tax benefits of $(55) million and $(42) million for the year ended December 31, 2022, related to deferred tax assets established upon change in a U.S. entity's tax characterization, and a worthless stock deduction on Company's investment in a subsidiary after a change in the entity's legal structure, respectively.

4. Includes net tax benefits of $(62) million and $(24) million for the year ended December 31, 2023, related to changes in deferred taxes and a tax currency change, respectively.

5. Includes the effect of withholding tax on distribution of foreign earnings to the U.S., net of U.S. foreign tax credits.