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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Taxes on income | For financial reporting purposes, income before income taxes includes the following components:
For the Years Ended December 31,
(In millions of dollars) | 2020 |  | 2019 |  | 2018
Income before income taxes: |  |  |  |  |
U.S. | $ | 1,075 |  |  | $ | 657 |  |  | $ | 460 |
Other | 1,718 |  |  | 1,782 |  |  | 1,784 |
| $ | 2,793 |  |  | $ | 2,439 |  |  | $ | 2,244 |
The expense (benefit) for income taxes is comprised of: |  |  |  |
Current – |  |  |  |  |
U.S. Federal | $ | 172 |  |  | $ | 70 |  |  | $ | 82 |
Other national governments | 456 |  |  | 455 |  |  | 449 |
U.S. state and local | 79 |  |  | 57 |  |  | 82 |
| 707 |  |  | 582 |  |  | 613 |
Deferred – |  |  |  |  |
U.S. Federal | 40 |  |  | 69 |  |  | (30) |
Other national governments | (14) |  |  | (16) |  |  | (1) |
U.S. state and local | 14 |  |  | 31 |  |  | (8) |
| 40 |  |  | 84 |  |  | (39) |
Total income taxes | $ | 747 |  |  | $ | 666 |  |  | $ | 574 |
Deferred income tax assets and liabilities | The significant components of deferred income tax assets and liabilities and their balance sheet classifications are as follows:
December 31,
(In millions of dollars) | 2020 |  | 2019
Deferred tax assets: |  |  |
Accrued expenses not currently deductible | $ | 547 |  |  | $ | 492 |
Differences related to non-U.S. operations (a) | 294 |  |  | 324 |
Accrued U.S. retirement benefits | 494 |  |  | 438 |
Net operating losses (b) | 60 |  |  | 70 |
Income currently recognized for tax | 25 |  |  | 19 |
Other | 43 |  |  | 27 |
| $ | 1,463 |  |  | $ | 1,370 |
Deferred tax liabilities: |  |  |
Differences related to non-U.S. operations | $ | 569 |  |  | $ | 400 |
Depreciation and amortization | 491 |  |  | 594 |
Accrued retirement & postretirement benefits - non-U.S. operations | 143 |  |  | 151 |
Capitalized expenses currently recognized for tax | 87 |  |  | 77 |
Other | 32 |  |  | 37 |
| $ | 1,322 |  |  | $ | 1,259 |
(a)Net of valuation allowances of $123 million in 2020 and $54 million in 2019. (b)Net of valuation allowances of $75 million in 2020 and $72 million in 2019.
December 31,
(In millions of dollars) | 2020 |  | 2019
Balance sheet classifications: |  |  |
Deferred tax assets | $ | 702 |  |  | $ | 676 |
Other liabilities | $ | 561 |  |  | $ | 565 |
U.S. Federal statutory income tax rate | A reconciliation from the U.S. Federal statutory income tax rate to the Company’s effective income tax rate is shown below:
For the Years Ended December 31, | 2020 |  | 2019 |  | 2018
U.S. Federal statutory rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
U.S. state and local income taxes—net of U.S. Federal income tax benefit | 2.5 |  |  | 3.0 |  |  | 2.3 |
Differences related to non-U.S. operations | 2.3 |  |  | 3.0 |  |  | 3.3 |
U.S. Tax Reform | — |  |  | — |  |  | (0.3) |
Equity compensation | (1.4) |  |  | (1.3) |  |  | (1.0) |
Uncertain Tax Positions | 1.1 |  |  | — |  |  | — |
Other | 1.2 |  |  | 1.6 |  |  | 0.3 |
Effective tax rate | 26.7 | % |  | 27.3 | % |  | 25.6 | %
Unrecognized tax benefits | Following is a reconciliation of the Company’s total gross unrecognized tax benefits for the years ended December 31, 2020, 2019 and 2018:
(In millions of dollars) | 2020 |  | 2019 |  | 2018
Balance at January 1, | $ | 86 |  |  | $ | 78 |  |  | $ | 71 |
Additions, based on tax positions related to current year | 9 |  |  | 8 |  |  | 6 |
Additions for tax positions of prior years | 25 |  |  | 15 |  |  | 6 |
Reductions for tax positions of prior years | (9) |  |  | (1) |  |  | — |
Settlements | (4) |  |  | (1) |  |  | (2) |
Lapses in statutes of limitation | (9) |  |  | (13) |  |  | (3) |
Balance at December 31, | $ | 98 |  |  | $ | 86 |  |  | $ | 78 |
Status of audits for significant jurisdictions outside of the United States | The status of audits for significant jurisdictions outside the United States are summarized in the table below:
Tax Audit (Years) |  |  |  |  |  |
Jurisdiction: | Initiated in 2020 |  | Ongoing |  | Concluded |
Canada | 2017, 2019-2020 |  | 2018 |  | 2013-2016 during 2019 |
France |  |  | 2017-2018 |  | 2011, 2012 during 2018 |
Germany | 2015-2018 |  | 2013-2016 |  | 2009-2012 during 2018 |
Italy | 2017 |  | 2015-2016 |  |  |
Singapore | 2018 |  | 2018 |  | 2016, 2017 during 2020 |
United Kingdom | 2018 |  | 2016-2017 |  | 2014, 2015 during 2018 |

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- Definition Tabular disclosure of income tax examinations that an enterprise is currently subject to or that have been completed in the current period typically including a description of the examination, the jurisdiction conducting the examination, the tax year(s) under examination, the likelihood of an unfavorable settlement, the range of possible losses, the liability recorded, the increase or decrease in the liability from the prior period, and any penalties and interest that have been recorded. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32718-109319 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 55 -Paragraph 217 -URI http://asc.fasb.org/extlink&oid=121610041&loc=d3e36027-109320 + Details
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