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Income Taxes | 12 Months Ended
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Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES Our effective tax rate was 18.2%, 18.7% and (50.8%) for 2020, 2019 and 2018. The effective income tax rate for 2020 reflects the continued lower effective income tax rates as a result of our European operations, the tax effect related to the transfer of intellectual property between tax jurisdictions and the tax effect of future remittances of the undistributed earnings of foreign subsidiaries. The effective income tax rate for 2019 reflects the tax effect related to the transfer of intellectual properties between tax jurisdictions and the effective income tax rates as a result of our European operations. The effective income tax rate for 2018 reflects the tax effect related to the transfer of intellectual properties between tax jurisdictions, the continued impact of complying with the Tax Cuts and Jobs Act of 2017 (the Tax Act) and continued lower effective tax rates as a result of our European operations.
Effective Income Tax Rate Reconciliation
| 2020 |  | 2019 |  | 2018
United States federal statutory rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
United States state and local income taxes, less federal deduction | 0.1 |  |  | 1.7 |  |  | 0.4 |
Foreign income tax at rates other than 21% | (3.3) |  |  | (4.6) |  |  | (6.5) |
Tax Cuts and Jobs Act of 2017 transition tax | — |  |  | — |  |  | 2.2 |
Tax Cuts and Jobs Act of 2017 deferred tax changes | — |  |  | — |  |  | (0.6) |
Tax related to repatriation of foreign earnings | 3.0 |  |  | (0.5) |  |  | 0.5 |
Intellectual property transfer | (1.4) |  |  | 3.5 |  |  | (63.8) |
Other | (1.2) |  |  | (2.4) |  |  | (4.0) |
Effective income tax rate | 18.2 | % |  | 18.7 | % |  | (50.8) | %
In December 2017 the Tax Act was signed into law in the United States. The law includes significant changes to the United States corporate income tax system, including a federal corporate rate reduction, limitations on the deductibility of certain expenses and the transition of United States international taxation from a worldwide tax system to a territorial tax system. As part of the transition to a territorial tax system, the Tax Act required taxpayers to calculate a one-time transition tax based on undistributed earnings of foreign subsidiaries. The Tax Act subjects a United States shareholder to tax on Global Intangible Low-Taxed Income (GILTI) earned by certain foreign subsidiaries. We have elected to account for GILTI tax in the year the tax is incurred.
Earnings Before Income Taxes
| 2020 |  | 2019 |  | 2018
United States | $ | 239 |  |  | $ | 366 |  |  | $ | 509 |
International | 1,715 |  |  | 2,196 |  |  | 1,847 |
Total | $ | 1,954 |  |  | $ | 2,562 |  |  | $ | 2,356 |
Components of Income Tax Expense (Benefit)
Current income tax expense: | 2020 |  | 2019 |  | 2018
United States federal | $ | 80 |  |  | $ | (17) |  |  | $ | 178 |
United States state and local | 20 |  |  | 46 |  |  | 30 |
International | 207 |  |  | 324 |  |  | 177 |
Total current income tax expense | $ | 307 |  |  | $ | 353 |  |  | $ | 385 |
Deferred income tax (benefit) expense: |  |  |  |  |
United States federal | $ | 1 |  |  | $ | 10 |  |  | $ | (44) |
United States state and local | (25) |  |  | (1) |  |  | (20) |
International | 72 |  |  | 117 |  |  | (1,518) |
Total deferred income tax (benefit) expense | $ | 48 |  |  | $ | 126 |  |  | $ | (1,582) |
Total income tax (benefit) expense | $ | 355 |  |  | $ | 479 |  |  | $ | (1,197) |
Interest and penalties included in other income (expense), net were expense of ($35), ($9) and ($9) in 2020, 2019 and 2018. The United States federal deferred income tax benefit (expense) includes the utilization of net operating loss carryforwards of $41, $50 and $31 in 2020, 2019 and 2018.
Deferred Income Tax Assets and Liabilities
Deferred income tax assets: | 2020 |  | 2019
Inventories | $ | 434 |  |  | $ | 415 |
Product-related liabilities | 48 |  |  | 57 |
Other accrued expenses | 512 |  |  | 221 |
Depreciation and amortization | 1,269 |  |  | 1,363 |
State income taxes | 108 |  |  | 65 |
Share-based compensation | 56 |  |  | 49 |
Net operating loss carryforwards | 373 |  |  | 95 |
Other | 263 |  |  | 207 |
Total deferred income tax assets | $ | 3,063 |  |  | $ | 2,472 |
Less valuation allowances | (203) |  |  | (75) |
Net deferred income tax assets | $ | 2,860 |  |  | $ | 2,397 |
Deferred Income Tax Assets and Liabilities
Deferred income tax liabilities: | 2020 |  | 2019
Depreciation and amortization | $ | (1,286) |  |  | $ | (893) |
Undistributed earnings | (161) |  |  | (37) |
Other | — |  |  | — |
Total deferred income tax liabilities | $ | (1,447) |  |  | $ | (930) |
Net deferred income tax assets | $ | 1,413 |  |  | $ | 1,467 |
Reported as: |  |  |
Noncurrent deferred income tax assets | $ | 1,530 |  |  | $ | 1,575 |
Noncurrent liabilities—Other liabilities | (117) |  |  | (108) |
Total | $ | 1,413 |  |  | $ | 1,467 |
Accrued interest and penalties were $133 and $94 on December 31, 2020 and 2019 which were reported in current and noncurrent accrued expenses and other liabilities. Net operating loss carryforwards totaling $1,642 with $410 being subject to a full valuation allowance ($1,409 and $405 related to the Wright acquisition) on December 31, 2020 are available to reduce future taxable earnings of certain domestic and foreign subsidiaries. United States loss carryforwards of $1,509 expire through 2045. International loss carryforwards of $132 begin to expire in 2022; however, some have no expiration. We also have tax credit carryforwards of $97 with $93 being subject to a full valuation allowance. The credits with a full valuation allowance begin to expire in 2025; however, some have no expiration. We do not anticipate generating income tax in excess of the non-expiring credits in the foreseeable future. We recorded a transition tax on undistributed foreign earnings as required by the Tax Act. No other provision was made for United States income taxes that may result from future remittances of the undistributed earnings of foreign subsidiaries that are determined to be indefinitely reinvested. We recorded deferred income tax on undistributed earnings of foreign subsidiaries not determined to be indefinitely reinvested. Determination of the total amount of unrecognized deferred income tax on undistributed earnings of foreign subsidiaries is not practicable.
Uncertain Income Tax Positions
| 2020 |  | 2019
Beginning uncertain tax positions | $ | 472 |  |  | $ | 528 |
Increases related to current year income tax positions | 12 |  |  | 62 |
Increases related to prior year income tax positions | 5 |  |  | 5 |
Decreases related to prior year income tax positions: |  |  |
Settlements and resolutions of income tax audits | (41) |  |  | (78) |
Statute of limitations expirations and other | (7) |  |  | (40) |
Foreign currency translation | 16 |  |  | (5) |
Ending uncertain tax positions | $ | 457 |  |  | $ | 472 |
Reported as: |  |  |
Noncurrent liabilities—Income taxes | $ | 457 |  |  | $ | 472 |
Our income tax expense would have been reduced by $456 and $468 in 2020 and 2019 had these uncertain income tax positions been favorably resolved. It is reasonably possible that the amount of unrecognized tax benefits will significantly change due to one or more of the following events in the next 12 months: expiring statutes, audit activity, tax payments, competent authority proceedings related to transfer pricing or final decisions in matters that are the subject of controversy in various taxing jurisdictions in which we operate, including inventory transfer pricing, cost sharing, product royalty and foreign branch arrangements. We are not able to reasonably estimate the amount or the future periods in which changes in unrecognized tax benefits may be resolved. Interest and penalties incurred associated with uncertain tax positions are included in other income (expense), net. In the normal course of business, income tax authorities in various income tax jurisdictions both within the United States and internationally conduct routine audits of our income tax returns filed in prior years. These audits are generally designed to determine if individual income tax authorities are in agreement with our interpretations of complex income tax regulations regarding the allocation of income to the various income tax jurisdictions. Income tax years are open from 2014 through the current year for the United States federal jurisdiction. Income tax years open for our other major jurisdictions range from 2006 through the current year.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
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