Taxes on Income (Tables)

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Reconciliation Between Effective Tax Rate and U.S. Statutory Rate

A reconciliation between the effective tax rate for income from continuing operations and the U.S. statutory rate is as follows:

	2022				2021				2020
	Amount		Tax Rate		Amount		Tax Rate		Amount		Tax Rate
U.S. statutory rate applied to income from continuing operations before taxes	$	3,453	21.0	%	$	2,915	21.0	%	$	1,231	21.0	%
Differential arising from:
Foreign earnings	(1,835)		(11.1)		(1,446)		(10.4)		(965)		(16.5)
GILTI and the foreign-derived intangible income deduction	462		2.8		(75)		(0.5)		349		6.0
State taxes	(110)		(0.7)		2		—		57		1.0
R&D tax credit	(81)		(0.5)		(81)		(0.6)		(108)		(1.8)
Tax settlements	(10)		(0.1)		(275)		(2.0)		(13)		(0.2)
Valuation allowances	108		0.7		102		0.7		37		0.6
Restructuring	11		0.1		61		0.4		105		1.8
Acquisition of VelosBio	—		—		(9)		(0.1)		559		9.5
Acquisition of Pandion	—		—		356		2.6		—		—
Acquisition of OncoImmune	—		—		—		—		97		1.7
Other	(80)		(0.5)		(29)		(0.1)		(9)		(0.2)
	$	1,918	11.7	%	$	1,521	11.0	%	$	1,340	22.9	%

Where applicable, the impact of changes in uncertain tax positions is reflected in the reconciling items above.

Income Before Taxes

Income from continuing operations before taxes consisted of:

Years Ended December 31	2022		2021		2020
Domestic	$	1,011	$	1,854	$	(3,814)
Foreign	15,433		12,025		9,677
	$	16,444	$	13,879	$	5,863

Taxes on Income

Taxes on income from continuing operations consisted of:

Years Ended December 31	2022		2021		2020
Current provision
Federal	$	2,265	$	74	$	893
Foreign	1,164		1,273		969
State	57		(13)		44
	3,486		1,334		1,906
Deferred provision
Federal	(1,510)		240		(605)
Foreign	71		(77)		64
State	(129)		24		(25)
	(1,568)		187		(566)
	$	1,918	$	1,521	$	1,340

Deferred Income Taxes

Deferred income taxes at December 31 consisted of:

	2022				2021
	Assets		Liabilities		Assets		Liabilities
Product intangibles and licenses	$	—	$	2,575	$	—	$	3,207
R&D capitalization	1,341		—		274		—
Inventory related	43		423		119		370
Accelerated depreciation	—		657		—		589
Equity investments	—		92		—		335
Pensions and other postretirement benefits	372		284		487		338
Compensation related	335		—		301		—
Unrecognized tax benefits	91		—		75		—
Net operating losses and other tax credit carryforwards	912		—		867		—
Other	511		267		434		180
Subtotal	3,605		4,298		2,557		5,019
Valuation allowance	(599)				(287)
Total deferred taxes	$	3,006	$	4,298	$	2,270	$	5,019
Net deferred income taxes			$	1,292			$	2,749
Recognized as:
Other Assets	$	503			$	692
Deferred Income Taxes			$	1,795			$	3,441

Income Taxes Paid

Income taxes paid consisted of:

Years Ended December 31	2022		2021		2020
Domestic (1)	$	1,891	$	1,211	$	977
Foreign	1,348		1,201		1,763
	$	3,239	$	2,412	$	2,740

(1)    Includes TCJA transition tax payments.

Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	2022		2021		2020
Balance January 1	$	1,529	$	1,537	$	1,225
Additions related to current year positions	344		306		298
Additions related to prior year positions	48		63		110
Reductions for tax positions of prior years (1)	(40)		(230)		(4)
Settlements (1)	(6)		(46)		(70)
Lapse of statute of limitations	(40)		(58)		(22)
Spin-off of Organon	—		(43)		—
Balance December 31	$	1,835	$	1,529	$	1,537

(1)    Amount in 2021 reflects a settlement with the IRS discussed below.