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Income Taxes
 12 Months Ended
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
202020192018
United States federal statutory rate21.0 %21.0 %21.0 %
United States state and local income taxes, less federal deduction0.1 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 earnings3.0 (0.5)0.5 
Intellectual property transfer(1.4)3.5 (63.8)
Other(1.2)(2.4)(4.0)
Effective income tax rate18.2 %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 
202020192018
United States$239 $366 $509 
International1,715 2,196 1,847 
Total$1,954 $2,562 $2,356 
Components of Income Tax Expense (Benefit)
Current income tax expense:202020192018
United States federal$80 $(17)$178 
United States state and local20 46 30 
International207 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)
International72 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:20202019
Inventories$434 $415 
Product-related liabilities48 57 
Other accrued expenses512 221 
Depreciation and amortization1,269 1,363 
State income taxes108 65 
Share-based compensation56 49 
Net operating loss carryforwards373 95 
Other263 207 
Total deferred income tax assets$3,063 $2,472 
Less valuation allowances(203)(75)
Net deferred income tax assets$2,860 $2,397 
Deferred Income Tax Assets and Liabilities
Deferred income tax liabilities:20202019
Depreciation and amortization$(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
 20202019
Beginning uncertain tax positions$472 $528 
Increases related to current year income tax positions12 62 
Increases related to prior year income tax positions5 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 translation16 (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.