XML 52 R34.htm IDEA: XBRL DOCUMENT v3.22.4
Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2022
Income Tax Disclosure [Abstract]  
Components of Income Before Provision for Income Taxes The components of income before provision for income taxes are as follows:
(In millions)202220212020
U.S.$3,859 $3,340 $4,762 
Non-U.S.3,976 5,501 2,468 
Income before income taxes
$7,835 $8,841 $7,230 
Components of the Provision for Income Taxes The components of the provision for income taxes are as follows:
(In millions)202220212020
Current income tax provision
Federal$813 $446 $521 
Non-U.S.633 1,148 423 
State254 160 175 
1,700 1,754 1,119 
Deferred income tax provision (benefit)
Federal$(611)$(227)$(237)
Non-U.S.(314)(399)(18)
State(72)(19)(14)
 (997)(645)(269)
Provision for income taxes
$703 $1,109 $850 
Schedule of Effective Income Tax Rate Reconciliation The provision for income taxes in the accompanying statement of income differs from the provision calculated by applying the statutory federal income tax rate to income before income taxes due to the following:
(In millions)202220212020
Statutory federal income tax rate
21 %21 %21 %
Provision for income taxes at statutory rate
$1,645 $1,857 $1,518 
Increases (decreases) resulting from:
Foreign rate differential
(329)(255)(223)
Income tax credits
(202)(315)(335)
Global intangible low-taxed income
96 76 86 
Foreign-derived intangible income
(149)(119)(156)
Excess tax benefits from stock options and restricted stock units
(80)(124)(114)
Provision for (reversal of) tax reserves, net
(544)(17)(26)
Intra-entity transfers
(18)(284)— 
Domestication transaction— — (263)
Valuation allowances
344 36 379 
Withholding taxes
84 164 115 
Tax return reassessments and settlements
(210)1 (196)
State income taxes, net of federal tax111 82 147 
Other, net
(45)7 (82)
Provision for income taxes
$703 $1,109 $850 
Schedule of Deferred Tax Asset (Liability) and Changes in Valuation Allowance
Net deferred tax asset (liability) in the accompanying balance sheet consists of the following:
(In millions)20222021
Deferred tax asset (liability)
Depreciation and amortization
$(4,277)$(4,687)
Net operating loss and credit carryforwards
1,951 1,652 
Reserves and accruals
140 162 
Accrued compensation
259 318 
Inventory basis difference
364 181 
Deferred interest445 295 
Research and development and other capitalized costs
220 — 
Unrealized (gains) losses on hedging instruments
(199)(33)
Other, net
435 251 
Deferred tax liabilities, net before valuation allowance
(662)(1,861)
Less: Valuation allowance
1,322 968 
Deferred tax liabilities, net
$(1,984)$(2,829)
The company estimates the degree to which tax assets and loss and credit carryforwards will result in a benefit based on expected profitability by tax jurisdiction and provides a valuation allowance for tax assets and loss and credit carryforwards that it believes will more likely than not expire unutilized. At December 31, 2022, all of the company’s valuation allowance relates to deferred tax assets, primarily net operating losses and disallowed interest expense carryforward, for which any subsequently recognized tax benefits will reduce income tax expense.
The changes in the valuation allowance are as follows:
 Year Ended December 31,
(In millions)202220212020
Beginning balance
$968 $933 $408 
Additions (reductions) charged to income tax provision, net
344 24 514 
Additions due to acquisitions
14 30 — 
Currency translation and other
(4)(19)11 
Ending balance$1,322 $968 $933 
Reconciliation of Unrecognized Tax Benefits A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:
(In millions)202220212020
Beginning balance
$1,124 $1,091 $1,552 
Additions due to acquisitions
15 26 — 
Additions for tax positions of current year
104 32 8 
Additions for tax positions of prior years
24 60 — 
Reductions for tax positions of prior years
(659)(5)(296)
Closure of tax years
(4)(27)— 
Settlements
(32)(53)(173)
Ending balance
$572 $1,124 $1,091