Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Taxes on income

For financial reporting purposes, income before income taxes includes the following components: 

For the Years Ended December 31,
(In millions)	2021		2020		2019
Income before income taxes:
U.S.	$	1,590	$	1,075	$	657
Other	2,618		1,718		1,782
	$	4,208	$	2,793	$	2,439
The expense (benefit) for income taxes is comprised of:
Current –
U.S. Federal	$	251	$	172	$	70
Other national governments	714		456		455
U.S. state and local	132		79		57
	1,097		707		582
Deferred –
U.S. Federal	(40)		40		69
Other national governments	(12)		(14)		(16)
U.S. state and local	(11)		14		31
	(63)		40		84
Total income taxes	$	1,034	$	747	$	666

Deferred income tax assets and liabilities

The significant components of deferred income tax assets and liabilities and their balance sheet classifications are as follows:

December 31,
(In millions)	2021		2020
Deferred tax assets:
Accrued expenses not currently deductible(a)	$	647	$	547
Differences related to non-U.S. operations(b)	293		294
Accrued U.S. retirement benefits	293		494
Net operating losses(c)	183		60
Income currently recognized for tax	29		25
Other	32		43
	$	1,477	$	1,463

Deferred tax liabilities:
Differences related to non-U.S. operations	$	624	$	569
Depreciation and amortization	506		491
Accrued retirement & postretirement benefits - non-U.S. operations	403		143
Capitalized expenses currently recognized for tax	98		87
Other	32		32
	$	1,663	$	1,322

(a)Net of valuation allowances of $2 million in 2021 and none in 2020.

(b)Net of valuation allowances of $144 million in 2021 and $123 million in 2020.

(c)Net of valuation allowances of $88 million in 2021 and $75 million in 2020.

December 31,
(In millions)	2021		2020
Balance sheet classifications:
Deferred tax assets	$	551	$	702
Other liabilities	$	737	$	561

U.S. Federal statutory income tax rate

A reconciliation from the U.S. federal statutory income tax rate to the Company’s effective income tax rate is shown below:

For the Years Ended December 31,	2021		2020		2019
U.S. Federal statutory rate	21.0	%	21.0	%	21.0	%
U.S. state and local income taxes—net of U.S. Federal income tax benefit	2.3		2.5		3.0
Differences related to non-U.S. operations	0.1		2.3		3.0
U.K. statutory rate change	2.6		—		—
Gain on consolidation of business	(1.5)		—		—
Equity compensation	(0.7)		(1.4)		(1.3)
Uncertain tax positions	0.1		1.1		—
Other	0.7		1.2		1.6
Effective tax rate	24.6	%	26.7	%	27.3	%

Unrecognized tax benefits

Following is a reconciliation of the Company’s total gross unrecognized tax benefits for the years ended December 31, 2021, 2020 and 2019:

(In millions)	2021		2020		2019
Balance at January 1,	$	98	$	86	$	78
Additions, based on tax positions related to current year	2		9		8
Additions for tax positions of prior years	11		25		15
Reductions for tax positions of prior years	(1)		(9)		(1)
Settlements	(1)		(4)		(1)
Lapses in statutes of limitation	(15)		(9)		(13)
Balance at December 31,	$	94	$	98	$	86

Status of audits for significant jurisdictions outside of the United States

The status of audits for significant jurisdictions outside the United States are summarized in the table below:

Tax Audit (Years)
Jurisdiction:	Initiated in 2021	Ongoing	Concluded
France		2017-2018	2011, 2012 during 2018
Germany		2013-2016	2009-2012 during 2018
Hong Kong	2019
Italy		2015-2017
Singapore	2017-2019	2018
United Kingdom	2019	2016-2018	2014, 2015 during 2018