Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Earnings before income taxes consisted of the following:


	December 31,
(DOLLARS IN MILLIONS)	2023		2022		2021
U.S. loss before taxes	$	(1,777)	$	(1,918)	$	(493)
Foreign (loss) income before taxes	(741)		293		847
Total (loss) income before taxes	$	(2,518)	$	(1,625)	$	354

The income tax provision consisted of the following:


	December 31,
(DOLLARS IN MILLIONS)	2023		2022		2021
Current tax provision
Federal	$	55	$	102	$	(5)
State and local	—		49		13
Foreign	359		325		303
Total current tax provision	414		476		311
Deferred tax provision
Federal	(113)		(77)		(121)
State and local	32		(111)		(34)
Foreign	(288)		(49)		(81)
Total deferred tax benefit	(369)		(237)		(236)
Total provision for income taxes	$	45	$	239	$	75

Reconciliation between the U.S. federal statutory income tax rate to the actual effective tax rate was as follows:


	December 31,
	2023		2022		2021
Statutory tax rate	21.0	%	21.0	%	21.0	%
Tax effect of non-deductible goodwill impairment	(20.4)		(29.1)		—
Difference in effective tax rate on foreign earnings and remittances(1)	(0.2)		—		8.0
Tax benefit from supply chain optimization	0.5		0.8		(5.8)
Unrecognized tax benefit, net of reversals	(0.8)		0.9		0.7

Tax impact on business divestitures	(3.7)		(5.9)		4.0
Deferred taxes on deemed repatriation(2)	0.5		(5.6)		2.7
Global intangible low-taxed income	(0.4)		(0.8)		4.1
Foreign-derived intangible income	—		1.1		(1.6)
U.S. foreign tax credit - general limitation	0.2		0.1		(3.1)
Research and development credit	0.5		0.8		(1.4)
Acquisition costs	—		—		2.4
Establishment (release) of valuation allowance on state deferred	—		—		(3.0)
State and local taxes including rate changes(3)	(1.7)		4.3		(4.8)
Tax impact on internal asset transfer	5.3		—		—
Other, net	(2.6)		(2.3)		(2.0)
Effective tax rate	(1.8)	%	(14.7)	%	21.2	%

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(1)For 2021, the rate includes rate change impacts related to the Netherlands and United Kingdom.

(2)For 2022 and 2023, the rate includes the establishment of the held for sale deferred tax liabilities due to a change in assertion.

(3)For 2022 and 2023, the rate includes rate change impacts related to the remeasurement of the state tax rate on deferred taxes.

The deferred tax assets and liabilities consisted of the following amounts:


	December 31,
(DOLLARS IN MILLIONS)	2023		2022
Employee and retiree benefits	$	118	$	61
Credit and net operating loss carryforwards	332		315

Amortizable research and development expenses	125		84

Interest limitation	127		3
Inventory	35		19
Lease obligations	170		151
Other, net	114		131
Gross deferred tax assets	1,021		764

Property, plant and equipment, net	(239)		(229)

Intangible assets(1)	(1,792)		(2,049)
Right-of-use assets	(170)		(151)
Loss on foreign currency translation	—		(23)
Deferred taxes on deemed repatriation	(155)		(166)
Gross deferred tax liabilities	(2,356)		(2,618)
Valuation allowance	(324)		(262)
Total net deferred tax liabilities	$	(1,659)	$	(2,116)

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


	December 31,
(DOLLARS IN MILLIONS)	2023		2022		2021
Balance of unrecognized tax benefits at beginning of year	$	112	$	130	$	99
Gross amount of increases in unrecognized tax benefits as a result of positions taken during a prior year(1)	1		1		42
Gross amount of decreases in unrecognized tax benefits as a result of positions taken during a prior year	—		(18)		(3)
Gross amount of increases in unrecognized tax benefits as a result of positions taken during the current year	19		31		5
The amounts of decreases in unrecognized benefits relating to settlements with taxing authorities	(3)		(27)		(1)
Reduction in unrecognized tax benefits due to the lapse of applicable statute of limitation	(6)		(5)		(12)
Balance of unrecognized tax benefits at end of year	$	123	$	112	$	130

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(1)For 2021, the amount includes positions related to N&B opening balance sheet amounts.