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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

An analysis of the provision for income taxes follows:


	Year Ended December 31
	2020		2019		2018
Current income taxes
United States	$	252	$	215	$	177
State	81		94		63
Other countries	298		238		229
Total	631		547		469
Deferred income taxes
United States	62		50		16
State	5		(16)		22
Other countries	(22)		(5)		(36)
Total	45		29		2
Total provision for income taxes	$	676	$	576	$	471

Income before income taxes is earned in the following tax jurisdictions:


	Year Ended December 31
	2020		2019		2018
United States	$	2,336	$	2,252	$	1,606
Other countries	594		398		207
Total income before income taxes	$	2,930	$	2,650	$	1,813

Deferred income tax assets and liabilities are composed of the following:


	December 31
	2020		2019
Deferred tax assets
Pension and other postretirement benefits	$	239	$	253
Tax credits and loss carryforwards	477		411
Lease liability	117		104
Other	465		388
	1,298		1,156
Valuation allowances	(272)		(248)
Total deferred tax assets	1,026		908

Deferred tax liabilities
Property, plant and equipment, net	900		795
Investments in subsidiaries	111		103
Goodwill	54		66
Intangible assets	159		4
Lease asset	117		105
Other	146		104
Total deferred tax liabilities	1,487		1,177
Net deferred tax assets (liabilities)	$	(461)	$	(269)

Presented below is a reconciliation of the income tax provision computed at the U.S. federal statutory tax rate to the actual effective tax rate:


	Year Ended December 31
	2020		2019		2018
U.S. statutory rate applied to income before income taxes	21.0	%	21.0	%	21.0	%
State income taxes, net of federal tax benefit	2.3		2.5		3.7


Routine tax incentives	(4.3)		(3.5)		(5.4)
Net tax cost on foreign income	2.7		1.5		1.6
Net impact of the Tax Act	—		—		6.4
Valuation allowance	0.7		1.0		1.6
Nonrecurring capital loss	—		(1.8)		—
Other - net(a)	0.7		1.0		(2.9)
Effective income tax rate	23.1	%	21.7	%	26.0	%

(a) Other - net is composed of numerous items, none of which is greater than 1.05 percent of income before income taxes.

Presented below is a reconciliation of the beginning and ending amounts of unrecognized income tax benefits:


	2020		2019		2018
Balance at January 1	$	383	$	298	$	354
Gross increases for tax positions of prior years	144		36		75
Gross decreases for tax positions of prior years	(34)		(13)		(86)
Gross increases for tax positions of the current year	36		87		41
Settlements	(22)		(13)		(70)
Other	(10)		(12)		(16)
Balance at December 31	$	497	$	383	$	298

As of December 31, 2020, the following tax years remain subject to examination for the major jurisdictions where we conduct business: