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Income Taxes | 12 Months Ended
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Dec. 31, 2021
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES Our effective tax rate was 12.6%, 18.2% and 18.7% for 2021, 2020 and 2019. The effective income tax rate for 2021 reflects the continued lower effective income tax rates as a result of our European operations, certain discrete tax benefits, 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 2020 and 2019 reflects the tax effect related to the transfer of intellectual properties between tax jurisdictions, the effective income tax rates as a result of our European operations and the tax effect of future remittances of the undistributed earnings of foreign subsidiaries.
Effective Income Tax Rate Reconciliation
| 2021 |  | 2020 |  | 2019
United States federal statutory rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
United States state and local income taxes, less federal deduction | 2.7 |  |  | 0.1 |  |  | 1.7 |
Foreign income tax at rates other than 21% | (6.9) |  |  | (3.3) |  |  | (4.6) |
Tax related to repatriation of foreign earnings | 1.4 |  |  | 3.0 |  |  | (0.5) |
Intellectual property transfer | (2.3) |  |  | (1.4) |  |  | 3.5 |
Other | (3.3) |  |  | (1.2) |  |  | (2.4) |
Effective income tax rate | 12.6 | % |  | 18.2 | % |  | 18.7 | %
Earnings Before Income Taxes
| 2021 |  | 2020 |  | 2019
United States | $ | 433 |  |  | $ | 239 |  |  | $ | 366 |
International | 1,848 |  |  | 1,715 |  |  | 2,196 |
Total | $ | 2,281 |  |  | $ | 1,954 |  |  | $ | 2,562 |
Components of Income Tax Expense (Benefit)
Current income tax expense: | 2021 |  | 2020 |  | 2019
United States federal | $ | 155 |  |  | $ | 80 |  |  | $ | (17) |
United States state and local | 97 |  |  | 20 |  |  | 46 |
International | 272 |  |  | 207 |  |  | 324 |
Total current income tax expense | $ | 524 |  |  | $ | 307 |  |  | $ | 353 |
Deferred income tax (benefit) expense: |  |  |  |  |
United States federal | $ | (82) |  |  | $ | 1 |  |  | $ | 10 |
United States state and local | (23) |  |  | (25) |  |  | (1) |
International | (132) |  |  | 72 |  |  | 117 |
Total deferred income tax (benefit) expense | $ | (237) |  |  | $ | 48 |  |  | $ | 126 |
Total income tax expense | $ | 287 |  |  | $ | 355 |  |  | $ | 479 |
Interest and penalties included in other income (expense), net were expense of ($23), ($35) and ($9) in 2021, 2020 and 2019. The United States federal deferred income tax benefit (expense) includes the utilization of net operating loss carryforwards of $283, $41 and $50 in 2021, 2020 and 2019.
Deferred Income Tax Assets and Liabilities
Deferred income tax assets: | 2021 |  | 2020
Inventories | $ | 513 |  |  | $ | 434 |
Product-related liabilities | 39 |  |  | 48 |
Other accrued expenses | 501 |  |  | 512 |
Depreciation and amortization | 1,194 |  |  | 1,269 |
State income taxes | 128 |  |  | 108 |
Share-based compensation | 63 |  |  | 56 |
Net operating loss and other credit carryforwards | 232 |  |  | 470 |
Other | 191 |  |  | 166 |
Total deferred income tax assets | $ | 2,861 |  |  | $ | 3,063 |
Less valuation allowances | (164) |  |  | (203) |
Net deferred income tax assets | $ | 2,697 |  |  | $ | 2,860 |
Deferred income tax liabilities: | 2021 |  | 2020
Depreciation and amortization | $ | (891) |  |  | $ | (1,286) |
Undistributed earnings | (114) |  |  | (161) |
Total deferred income tax liabilities | $ | (1,005) |  |  | $ | (1,447) |
Net deferred income tax assets | $ | 1,692 |  |  | $ | 1,413 |
Reported as: |  |  |
Noncurrent deferred income tax assets | $ | 1,760 |  |  | $ | 1,530 |
Noncurrent liabilities—Other liabilities | (68) |  |  | (117) |
Total | $ | 1,692 |  |  | $ | 1,413 |
Accrued interest and penalties were $150 and $133 on December 31, 2021 and 2020 which were reported in current and noncurrent accrued expenses and other liabilities. Net operating loss carryforwards totaling $602 with $192 being subject to a full valuation allowance ($183 and $106 related to the Wright acquisition) on December 31, 2021 are available to reduce future taxable earnings of certain domestic and foreign subsidiaries. United States loss carryforwards of $403 expire through 2045. International loss carryforwards of $198 begin to expire in 2022; however, some have no expiration. We also have tax credit carryforwards of $104 with $83 being subject to a full valuation allowance. The credits with a full valuation allowance begin to expire in 2022; however, some have no expiration. We do not anticipate generating income tax in excess of the non-expiring credits in the foreseeable future. The Tax Cuts and Jobs Act ("the Act") was enacted in 2017 in the United States. We recorded a one-time transition tax on earnings of certain foreign subsidiaries that were previously deferred. The Act also 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. 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
| 2021 |  | 2020
Beginning uncertain tax positions | $ | 457 |  |  | $ | 472 |
Increases related to current year income tax positions | 13 |  |  | 12 |
Increases related to prior year income tax positions | 4 |  |  | 5 |
Decreases related to prior year income tax positions: |  |  |
Settlements and resolutions of income tax audits | (18) |  |  | (41) |
Statute of limitations expirations and other | — |  |  | (7) |
Foreign currency translation | (12) |  |  | 16 |
Ending uncertain tax positions | $ | 444 |  |  | $ | 457 |
Reported as: |  |  |
Noncurrent liabilities—Income taxes | $ | 444 |  |  | $ | 457 |
Our income tax expense would have been reduced by $445 and $456 in 2021 and 2020 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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