Taxes (Tables)

12 Months Ended

Dec. 31, 2022

Taxes

Income before income taxes

($ in millions)
For the year ended December 31:	2022			2021		2020
Income/(loss) from continuing operations before income taxes
U.S. operations	$	(6,602)	*	$	(2,654)	$	(2,349)
Non-U.S. operations		7,758			7,491		4,921
Total income from continuing operations before income taxes	$	1,156		$	4,837	$	2,572

* Includes the impact of a one-time, non-cash pension settlement charge. Refer to note V, “Retirement-Related Benefits,” for additional information.

Components of the provision for income taxes by geographic operations and taxing jurisdiction

($ in millions)
For the year ended December 31:	2022		2021		2020
U.S. operations	$	(2,272)	$	(969)	$	1,913
Non-U.S. operations		1,645		1,093		(3,273)
Total continuing operations provision for/(benefit from) income taxes	$	(626)	$	124	$	(1,360)

($ in millions)
For the year ended December 31:	2022		2021		2020
U.S. federal
Current	$	391	$	374	$	312
Deferred		(2,645)		(1,358)		1,102
	$	(2,253)	$	(984)	$	1,414
U.S. state and local
Current	$	184	$	161	$	345
Deferred		(486)		(370)		(358)
	$	(302)	$	(209)	$	(13)
Non-U.S.
Current	$	1,676	$	1,342	$	1,208
Deferred		252		(25)		(3,969)
	$	1,929	$	1,317	$	(2,761)
Total continuing operations provision for/(benefit from) income taxes	$	(626)	$	124	$	(1,360)
Discontinued operations provision for/(benefit from) income taxes	$	124	$	714	$	484
Total provision for/(benefit from) income taxes	$	(503)	$	838	$	(876)

Effective income tax rate reconciliation

For the year ended December 31:	2022		2021		2020
Statutory rate	21	%	21	%	21	%
Tax differential on foreign income	(29)	*	(10)		(31)
Intra-entity IP sale	—		—		(37)
Domestic incentives	(24)	*	(5)		(9)
State and local	(21)	*	(3)		0
Other	(1)	*	0		3
Effective rate	(54)	%	3	%	(53)	%

* Includes the impacts of the pension settlement charge on tax differential on foreign income, domestic incentives, state and local, and other of (24) points, (20) points, (21) points, and (1) point, respectively.

Percentages rounded for disclosure purposes.

Components of deferred tax assets and liabilities

Deferred Tax Assets

($ in millions)
At December 31:	2022		2021
Retirement benefits	$	1,954	$	3,142
Leases		927		1,061
Share-based and other compensation		608		661
Domestic tax loss/credit carryforwards		1,798		1,619
Deferred income		633		630
Foreign tax loss/credit carryforwards		845		983
Bad debt, inventory and warranty reserves		383		390
Depreciation		247		249
Restructuring charges		101		216
Accruals		215		305
Intangible assets		2,879		2,929
Capitalized research and development		3,012		2,161
Other		1,157		1,306	*
Gross deferred tax assets		14,759		15,652
Less: valuation allowance		770		883
Net deferred tax assets	$	13,989	$	14,769

** Recast to include 2021 hedging losses in other.

Deferred Tax Liabilities

($ in millions)
At December 31:	2022		2021
Goodwill and intangible assets	$	3,156	$	3,306	*
GILTI deferred taxes		2,483		3,257
Leases and right-of-use assets		1,174		1,314
Depreciation		505		518
Retirement benefits		1,609		1,971
Deferred transition costs		56		42
Undistributed foreign earnings		87		131
Other		955		817
Gross deferred tax liabilities	$	10,025	$	11,356

* Recast to conform to 2022 presentation to include software development costs in goodwill and intangible assets.

Reconciliation of the beginning and ending amount of unrecognized tax benefits

($ in millions)
	2022		2021		2020
Balance at January 1	$	8,709	$	8,568	$	7,146
Additions based on tax positions related to the current year		355		934		1,690
Additions for tax positions of prior years		174		247		159
Reductions for tax positions of prior years (including impacts due to a lapse of statute)		(470)		(688)		(408)
Settlements		(41)		(352)		(19)
Balance at December 31	$	8,728	$	8,709	$	8,568