XML 55 R40.htm IDEA: XBRL DOCUMENT
v3.24.0.1

Income Taxes (Tables) | 12 Months Ended
--- | ---
Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Schedule of Income before Income Tax Domestic and Foreign | The sources of income from continuing operations before income taxes are:
(dollars in millions) | 2023 |  | 2022 |  | 2021
United States(1) | $ | 938 |  |  | $ | 4,151 |  |  | $ | 3,676 |
Foreign | 2,898 |  |  | 1,966 |  |  | 1,433 |
Income from continuing operations before income taxes | $ | 3,836 |  |  | $ | 6,117 |  |  | $ | 5,109 |
(1) 2023 includes the impacts of the Powder Metal Matter.
Schedule of Components of Income Tax Expense (Benefit) | The income tax expense (benefit) for the years ended December 31 are as follows:
(dollars in millions) | 2023 |  | 2022 |  | 2021
Current: |  |  |  |  |
United States: |  |  |  |  |
Federal | $ | 213 |  |  | $ | 1,724 |  |  | $ | 387 |
State | 70 |  |  | 216 |  |  | 238 |
Foreign | 575 |  |  | 513 |  |  | 427 |
| 858 |  |  | 2,453 |  |  | 1,052 |
Future: |  |  |  |  |
United States: |  |  |  |  |
Federal | (411) |  |  | (1,399) |  |  | (26) |
State | (53) |  |  | (166) |  |  | 41 |
Foreign | 62 |  |  | (98) |  |  | (103) |
| (402) |  |  | (1,663) |  |  | (88) |
Income tax expense | $ | 456 |  |  | $ | 790 |  |  | $ | 964 |
Schedule of Effective Income Tax Rate Reconciliation | Differences between effective income tax rates and the statutory U.S. federal income tax rate are as follows:
| 2023 |  | 2022 |  | 2021
(dollars in millions) | Amount | Rate |  | Amount | Rate |  | Amount | Rate
Statutory U.S. federal income tax rate | $ | 805 |  | 21.0 | % |  | $ | 1,285 |  | 21.0 | % |  | $ | 1,073 |  | 21.0 | %
Tax on international activities | (27) |  | (0.7) |  |  | (186) |  | (3.1) |  |  | (204) |  | (4.0) |
Tax charges related to separation of Carrier and Otis and Raytheon merger | — |  | — |  |  | — |  | — |  |  | (39) |  | (0.8) |
Disposals of businesses | — |  | — |  |  | — |  | — |  |  | 108 |  | 2.2 |
U.S. research and development credit | (168) |  | (4.4) |  |  | (164) |  | (2.7) |  |  | (172) |  | (3.4) |
U.S. federal statute lapse | (59) |  | (1.5) |  |  | — |  | — |  |  | — |  | — |
State income tax, net | 17 |  | 0.4 |  |  | 59 |  | 1.0 |  |  | 174 |  | 3.4 |
Foreign Derived Intangible Income (FDII) | (142) |  | (3.7) |  |  | (214) |  | (3.5) |  |  | (121) |  | (2.4) |
U.K. corporate tax rate enactment | — |  | — |  |  | — |  | — |  |  | 73 |  | 1.5 |
Other | 30 |  | 0.8 |  |  | 10 |  | 0.2 |  |  | 72 |  | 1.4 |
Effective income tax rate | $ | 456 |  | 11.9 | % |  | $ | 790 |  | 12.9 | % |  | $ | 964 |  | 18.9 | %
Schedule of Deferred Tax Assets and Liabilities | The tax effects of temporary differences and tax carryforwards which gave rise to future income tax benefits and payables at December 31, 2023 and 2022 are as follows:
(dollars in millions) | 2023 |  | 2022
Future income tax benefits: |  |  |
Insurance and employee benefits | $ | 994 |  |  | $ | 1,126 |
Inventory and contract balances | 571 |  |  | 639 |
Warranty provisions | 240 |  |  | 242 |
Capitalization of research and experimental expenditures | 1,631 |  |  | 1,712 |
Other basis differences | 779 |  |  | 828 |
Powder Metal Matter | 644 |  |  | — |
Tax loss carryforwards | 905 |  |  | 305 |
Tax credit carryforwards | 891 |  |  | 970 |
Valuation allowances | (1,465) |  |  | (842) |
Total future income tax benefits | $ | 5,190 |  |  | $ | 4,980 |
Future income taxes payable: |  |  |
Goodwill and Intangible assets | $ | 6,228 |  |  | $ | 6,588 |
Fixed assets | 1,739 |  |  | 1,751 |
Other basis differences | 238 |  |  | 220 |
Total future income tax payable | $ | 8,205 |  |  | $ | 8,559 |
Summary Of Tax Credit Carryforwards | At December 31, 2023, tax credit carryforwards, principally state and foreign, and tax loss carryforwards, principally state and foreign, were as follows:
(dollars in millions) | Tax Credit Carryforwards |  | Tax Loss Carryforwards
Expiration period: |  |  |
2024-2028 | $ | 56 |  |  | $ | 317 |
2029-2033 | 36 |  |  | 180 |
2034-2043 | 299 |  |  | 832 |
Indefinite | 500 |  |  | 3,272 |
Total | $ | 891 |  |  | $ | 4,601 |
Summary Of Income Tax Contingencies | A reconciliation of the beginning and ending amounts of unrecognized tax benefits and interest expense related to unrecognized tax benefits for the years ended December 31, 2023, 2022, and 2021 is as follows:
(dollars in millions) | 2023 |  | 2022 |  | 2021
Balance at January 1 | $ | 1,515 |  |  | $ | 1,458 |  |  | $ | 1,225 |
Additions for tax positions related to the current year | 89 |  |  | 106 |  |  | 110 |
Additions for tax positions of prior years | 5 |  |  | 23 |  |  | 282 |
Reductions for tax positions of prior years | (141) |  |  | (56) |  |  | (49) |
Settlements | (26) |  |  | (16) |  |  | (110) |
Balance at December 31 | $ | 1,442 |  |  | $ | 1,515 |  |  | $ | 1,458 |
Gross interest expense related to unrecognized tax benefits | $ | 62 |  |  | $ | 34 |  |  | $ | 39 |
Total accrued interest balance at December 31 | 233 |  |  | 190 |  |  | 165 |
Summary of Valuation Allowance | Changes to valuation allowances consisted of the following:
(dollars in millions) | 2023 |  | 2022 |  | 2021
Balance at January 1 | $ | 842 |  |  | $ | 825 |  |  | $ | 757 |
Additions charged to income tax expense | 170 |  |  | 54 |  |  | 136 |
Reductions credited to goodwill, due to acquisitions | — |  |  | — |  |  | (19) |
Reductions credited to income tax expense | (58) |  |  | (82) |  |  | (37) |
Other adjustments (1) | 511 |  |  | 45 |  |  | (12) |
Balance at December 31 | $ | 1,465 |  |  | $ | 842 |  |  | $ | 825 |
(1) 2023 includes the addition of the indefinite-lived tax loss carryforwards now disclosed in connection with OECD Pillar Two.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition 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. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Paragraph 9 -Section 50 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-9 + Details
Name: | us-gaap_ScheduleOfComponentsOfIncomeTaxExpenseBenefitTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition 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. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Paragraph 2 -Section 50 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-2 + Details
Name: | us-gaap_ScheduleOfDeferredTaxAssetsAndLiabilitiesTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition 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. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Paragraph 12 -Section 50 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-12 + Details
Name: | us-gaap_ScheduleOfEffectiveIncomeTaxRateReconciliationTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of income before income tax between domestic and foreign jurisdictions. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(1)(Note 1)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 + Details
Name: | us-gaap_ScheduleOfIncomeBeforeIncomeTaxDomesticAndForeignTableTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition 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. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-15 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15A -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-15A Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Section 50 -Paragraph 19 -SubTopic 10 -Topic 740 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-19 + Details
Name: | us-gaap_SummaryOfIncomeTaxContingenciesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of tax credit carryforwards available to reduce future taxable income, including amounts, expiration dates, limitations on use and the related deferred tax assets and valuation allowances. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-3 + Details
Name: | us-gaap_SummaryOfTaxCreditCarryforwardsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Definition Tabular disclosure of valuation allowances to reduce deferred tax assets to net realizable value, including identification of the deferred tax asset more likely than not will not be fully realized and the corresponding amount of the valuation allowance. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-2 + Details
Name: | us-gaap_SummaryOfValuationAllowanceTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration