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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