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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2021
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) | 2021 |  | 2020 |  | 2019
Income before income taxes: |  |  |  |  |
U.S. | $ | 1,590 |  |  | $ | 1,075 |  |  | $ | 657 |
Other | 2,618 |  |  | 1,718 |  |  | 1,782 |
| $ | 4,208 |  |  | $ | 2,793 |  |  | $ | 2,439 |
The expense (benefit) for income taxes is comprised of: |  |  |  |
Current – |  |  |  |  |
U.S. Federal | $ | 251 |  |  | $ | 172 |  |  | $ | 70 |
Other national governments | 714 |  |  | 456 |  |  | 455 |
U.S. state and local | 132 |  |  | 79 |  |  | 57 |
| 1,097 |  |  | 707 |  |  | 582 |
Deferred – |  |  |  |  |
U.S. Federal | (40) |  |  | 40 |  |  | 69 |
Other national governments | (12) |  |  | (14) |  |  | (16) |
U.S. state and local | (11) |  |  | 14 |  |  | 31 |
| (63) |  |  | 40 |  |  | 84 |
Total income taxes | $ | 1,034 |  |  | $ | 747 |  |  | $ | 666 |
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) | 2021 |  | 2020
Deferred tax assets: |  |  |
Accrued expenses not currently deductible(a) | $ | 647 |  |  | $ | 547 |
Differences related to non-U.S. operations(b) | 293 |  |  | 294 |
Accrued U.S. retirement benefits | 293 |  |  | 494 |
Net operating losses(c) | 183 |  |  | 60 |
Income currently recognized for tax | 29 |  |  | 25 |
Other | 32 |  |  | 43 |
| $ | 1,477 |  |  | $ | 1,463 |
Deferred tax liabilities: |  |  |
Differences related to non-U.S. operations | $ | 624 |  |  | $ | 569 |
Depreciation and amortization | 506 |  |  | 491 |
Accrued retirement & postretirement benefits - non-U.S. operations | 403 |  |  | 143 |
Capitalized expenses currently recognized for tax | 98 |  |  | 87 |
Other | 32 |  |  | 32 |
| $ | 1,663 |  |  | $ | 1,322 |
(a)Net of valuation allowances of $2 million in 2021 and none in 2020. (b)Net of valuation allowances of $144 million in 2021 and $123 million in 2020. (c)Net of valuation allowances of $88 million in 2021 and $75 million in 2020.
December 31,
(In millions) | 2021 |  | 2020
Balance sheet classifications: |  |  |
Deferred tax assets | $ | 551 |  |  | $ | 702 |
Other liabilities | $ | 737 |  |  | $ | 561 |
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, | 2021 |  | 2020 |  | 2019
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 | 2.3 |  |  | 2.5 |  |  | 3.0 |
Differences related to non-U.S. operations | 0.1 |  |  | 2.3 |  |  | 3.0 |
U.K. statutory rate change | 2.6 |  |  | — |  |  | — |
Gain on consolidation of business | (1.5) |  |  | — |  |  | — |
Equity compensation | (0.7) |  |  | (1.4) |  |  | (1.3) |
Uncertain tax positions | 0.1 |  |  | 1.1 |  |  | — |
Other | 0.7 |  |  | 1.2 |  |  | 1.6 |
Effective tax rate | 24.6 | % |  | 26.7 | % |  | 27.3 | %
Unrecognized tax benefits | Following is a reconciliation of the Company’s total gross unrecognized tax benefits for the years ended December 31, 2021, 2020 and 2019:
(In millions) | 2021 |  | 2020 |  | 2019
Balance at January 1, | $ | 98 |  |  | $ | 86 |  |  | $ | 78 |
Additions, based on tax positions related to current year | 2 |  |  | 9 |  |  | 8 |
Additions for tax positions of prior years | 11 |  |  | 25 |  |  | 15 |
Reductions for tax positions of prior years | (1) |  |  | (9) |  |  | (1) |
Settlements | (1) |  |  | (4) |  |  | (1) |
Lapses in statutes of limitation | (15) |  |  | (9) |  |  | (13) |
Balance at December 31, | $ | 94 |  |  | $ | 98 |  |  | $ | 86 |
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 2021 |  | Ongoing |  | Concluded |
France |  |  | 2017-2018 |  | 2011, 2012 during 2018 |
Germany |  |  | 2013-2016 |  | 2009-2012 during 2018 |
Hong Kong | 2019 |  |  |  |  |
Italy |  |  | 2015-2017 |  |  |
Singapore | 2017-2019 |  | 2018 |  |  |
United Kingdom | 2019 |  | 2016-2018 |  | 2014, 2015 during 2018 |

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- 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 -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32639-109319 + Details
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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=121826272&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=124434304&loc=d3e36027-109320 + Details
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