Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Income Before Income Taxes

Provision for Income Taxes

Components of Deferred Tax Assets and Liabilities


(Millions)	2021		2020
Deferred tax assets:
Accruals not currently deductible
Employee benefit costs	$	237	$	232
Product and other claims	257		338
Miscellaneous accruals	157		153
Pension costs	351		849
Stock-based compensation	249		231
Advanced payments	286		—
Net operating/capital loss/state tax credit carryforwards	120		148
Foreign tax credits	115		100
Currency translation	—		90
Lease liabilities	219		227
Product and other insurance receivables	48		—
Inventory	68		54
Other	31		112
Gross deferred tax assets	2,138		2,534
Valuation allowance	(142)		(135)
Total deferred tax assets	1,996		2,399

Deferred tax liabilities:
Product and other insurance receivables	—		(4)
Accelerated depreciation	(665)		(606)
Intangible amortization	(985)		(1,023)
Right-of-use asset	(222)		(228)
Total deferred tax liabilities	(1,872)		(1,861)

Net deferred tax assets	$	124	$	538

Reconciliation of Effective Income Tax Rate


	2021		2020		2019
Statutory U.S. tax rate	21.0	%	21.0	%	21.0	%
State income taxes - net of federal benefit	0.9		1.2		0.5
International income taxes - net	(1.2)		(1.2)		0.2
Global Intangible Low Taxed Income (GILTI)	0.7		0.8		1.8
Foreign Derived Intangible Income (FDII)	(3.1)		(1.8)		(2.9)
U.S. research and development credit	(0.7)		(1.0)		(1.7)
Reserves for tax contingencies	0.6		0.5		2.3
Employee share-based payments	(0.6)		(0.5)		(1.3)
All other - net	0.2		0.7		(0.2)
Effective worldwide tax rate	17.8	%	19.7	%	19.7	%

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits (UTB) is as follows:

Federal, State and Foreign Tax


(Millions)	2021		2020		2019
Gross UTB Balance at January 1	$	1,113	$	1,167	$	647

Additions based on tax positions related to the current year	91		74		76
Additions for tax positions of prior years	22		106		132
Additions related to recent acquisitions	—		—		396
Reductions for tax positions of prior years	(60)		(173)		(56)
Settlements	(57)		(8)		(4)
Reductions due to lapse of applicable statute of limitations	(38)		(53)		(24)

Gross UTB Balance at December 31	$	1,071	$	1,113	$	1,167

Net UTB that would impact the effective tax rate at December 31	$	1,112	$	1,145	$	1,178