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Taxes on Earnings from Continuing Operations (Tables)

12 Months Ended

Dec. 31, 2020

Taxes on Earnings from Continuing Operations

Schedule of earnings from continuing operations before taxes

​

​	​	​	​	​	​	​	​	​	​
(in millions)		2020			2019			2018
Earnings From Continuing Operations Before Taxes:	​	​	​	​	​	​	​	​	​
Domestic	​	$	1,588	​	$	889	​	$	(430)
Foreign	​		3,380	​		3,188	​	​	3,303
Total	​	$	4,968	​	$	4,077	​	$	2,873

Schedule of provisions for taxes on earnings from continuing operations

​

​	​	​	​	​	​	​	​	​	​
(in millions)		2020			2019			2018
Taxes on Earnings From Continuing Operations:		​	​		​	​	​	​	​
Current:	​	​	​	​	​	​	​	​	​
Domestic	​	$	39	​	$	291	​	$	(812)
Foreign	​		566	​		590	​	​	606
Total current	​		605	​		881	​	​	(206)
Deferred:	​	​	​	​	​	​	​	​	​
Domestic	​		(18)	​		(305)	​	​	832
Foreign	​		(90)	​		(186)	​	​	(87)
Total deferred	​		(108)	​		(491)	​	​	745
Total	​	$	497	​	$	390	​	$	539

Schedule of reconciliation of income tax rate and U.S. statutory tax rate to income tax expense (benefit)

​

​	​	​	​	​	​	​	​
​		2020		2019		2018
Statutory tax rate on earnings from continuing operations		21.0	%	21.0	%	21.0	%
Impact of foreign operations		(3.3)	​	(5.0)	​	(5.4)	​
Impact of TCJA and other related items	​	0.5	​	(2.1)	​	6.3	​
Foreign-derived intangible income benefit	​	(1.0)	​	(2.0)	​	(1.9)	​
Domestic impairment loss	​	(2.7)	​	—	​	(2.1)	​
Excess tax benefits related to stock compensation	​	(1.9)	​	(2.5)	​	(3.1)	​
Research tax credit	​	(1.0)	​	(1.2)	​	(1.8)	​
Resolution of certain tax positions pertaining to prior years		(2.8)	​	—	​	3.4	​
Intercompany restructurings and integration	​	0.5	​	—	​	—	​
State taxes, net of federal benefit		0.5	​	0.8	​	0.4	​
All other, net		0.2	​	0.6	​	2.0	​
Effective tax rate on earnings from continuing operations		10.0	%	9.6	%	18.8	%

Schedule of components of net deferred tax assets and liabilities

​

​	​	​	​	​	​	​
(in millions)		2020			2019
Deferred tax assets:	​	​	​	​	​	​
Compensation and employee benefits		$	1,003	​	$	982
Other, primarily reserves not currently deductible, and NOL’s and credit carryforwards	​	​	2,383	​	​	2,378
Trade receivable reserves	​	​	196	​	​	190
Inventory reserves	​	​	146	​	​	110
Lease liabilities	​	​	259	​	​	209
Deferred intercompany profit	​	​	254	​	​	259
Total deferred tax assets before valuation allowance	​	​	4,241	​	​	4,128
Valuation allowance	​	​	(1,060)	​	​	(978)
Total deferred tax assets	​	​	3,181	​	​	3,150
Deferred tax liabilities:	​	​	​	​	​	​
Depreciation	​	​	(297)	​	​	(219)
Right of Use lease assets	​	​	(251)	​	​	(209)
Other, primarily the excess of book basis over tax basis of intangible assets	​	​	(2,876)	​	​	(3,258)
Total deferred tax liabilities	​	​	(3,424)	​	​	(3,686)
Total net deferred tax assets (liabilities)		$	(243)	​	$	(536)

Schedule of reconciliation of unrecognized tax benefits for the period

​

​	​	​	​	​	​	​
(in millions)		2020			2019
January 1	​	$	1,175	​	$	1,120
Increase due to current year tax positions	​		190	​	​	137
Increase due to prior year tax positions	​		97	​	​	75
Decrease due to prior year tax positions	​		(144)	​	​	(117)
Settlements	​		(27)	​	​	(32)
Lapse of statute	​	​	(81)	​	​	(8)
December 31	​	$	1,210	​	$	1,175

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Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years.

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Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets.

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Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations.

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Tabular disclosure of income before income tax between domestic and foreign jurisdictions.

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Tabular disclosure for tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities and other income tax contingencies. Includes, but is not limited to, interest and penalties, reconciliation of unrecognized tax benefits, unrecognized tax benefits that would affect the effective tax rate, tax years that remain subject to examination by tax jurisdictions, and information about positions for which it is reasonably possible that amounts unrecognized will significantly change within 12 months.

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