Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income Taxes.

Income Before Income Taxes

Income Before Income Taxes

(Millions)	2019		2018		2017
United States	$	3,008	$	3,487	$	4,149
International		2,704		3,513		3,399
Total	$	5,712	$	7,000	$	7,548

Provision for Income Taxes

Provision for Income Taxes

(Millions)	2019		2018		2017
Currently payable
Federal	$	534	$	698	$	1,022
State		59		109		59
International		673		763		722
Tax Cuts and Jobs Act (TCJA) non-current transition tax provision		—		176		623
Deferred
Federal		(32)		(38)		162
State		(26)		(17)		15
International		(78)		(54)		76
Total	$	1,130	$	1,637	$	2,679

Components of Deferred Tax Assets and Liabilities

Components of Deferred Tax Assets and Liabilities

(Millions)	2019		2018
Deferred tax assets:
Accruals not currently deductible
Employee benefit costs	$	169	$	187
Product and other claims		280		228
Miscellaneous accruals		119		113
Pension costs		824		643
Stock-based compensation		218		203
Net operating/capital loss/tax credit carryforwards		150		71
Foreign tax credits		66		—
Inventory		70		54
Other		113		24
Gross deferred tax assets		2,009		1,523
Valuation allowance		(158)		(67)
Total deferred tax assets	$	1,851	$	1,456
Deferred tax liabilities:
Product and other insurance receivables	$	—	$	(7)
Accelerated depreciation		(580)		(521)
Intangible amortization		(1,021)		(799)
Currency translation		(30)		(35)
Other		—		(8)
Total deferred tax liabilities	$	(1,631)	$	(1,370)
Net deferred tax assets	$	220	$	86

Reconciliation of Effective Income Tax Rate

Reconciliation of Effective Income Tax Rate

	2019		2018		2017
Statutory U.S. tax rate	21.0	%	21.0	%	35.0	%
State income taxes - net of federal benefit	0.5		1.0		0.8
International income taxes - net	0.2		0.2		(6.3)
Global Intangible Low Taxed Income (GILTI)	1.8		1.1		—
Foreign Derived Intangible Income (FDII)	(2.9)		(1.3)		—
U.S. TCJA enactment - net impacts	—		2.5		10.1
U.S. research and development credit	(1.7)		(1.5)		(0.7)
Reserves for tax contingencies	2.3		1.2		2.2
Domestic Manufacturer’s deduction	—		—		(1.8)
Employee share-based payments	(1.3)		(1.4)		(3.2)
All other - net	(0.1)		0.6		(0.6)
Effective worldwide tax rate	19.8	%	23.4	%	35.5	%

Reconciliation of Federal, State and Foreign Tax Gross Unrecognized Tax Benefits

Federal, State and Foreign Tax

(Millions)	2019		2018		2017
Gross UTB Balance at January 1	$	647	$	530	$	319
Additions based on tax positions related to the current year		76		129		119
Additions for tax positions of prior years		132		146		149
Additions related to recent acquisitions		396		—		—
Reductions for tax positions of prior years		(56)		(123)		(38)
Settlements		(4)		(17)		(3)
Reductions due to lapse of applicable statute of limitations		(24)		(18)		(16)
Gross UTB Balance at December 31	$	1,167	$	647	$	530
Net UTB impacting the effective tax rate at December 31	$	1,178	$	655	$	526