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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Earnings from Continuing Operations Before Income Taxes | Components of earnings before income taxes are as follows:
Years ended December 31 | 2022 |  | 2021 |  | 2020
United States | $ | 1,312 |  |  | $ | 1,030 |  |  | $ | 1,029 |
Other nations | 203 |  |  | 522 |  |  | 145 |
| $ | 1,515 |  |  | $ | 1,552 |  |  | $ | 1,174 |
Income Tax Expense (Benefit) | Components of income tax expense are as follows:
Years ended December 31 | 2022 |  | 2021 |  | 2020
United States Federal | $ | 240 |  |  | $ | 134 |  |  | $ | 117 |
Other nations | 159 |  |  | 98 |  |  | 98 |
States (U.S.) | 83 |  |  | 36 |  |  | 31 |
Current income tax expense | 482 |  |  | 268 |  |  | 246 |
United States Federal | (179) |  |  | (2) |  |  | (21) |
Other nations | (118) |  |  | 22 |  |  | 8 |
States (U.S.) | (37) |  |  | 14 |  |  | (12) |
Deferred income tax expense (benefit) | (334) |  |  | 34 |  |  | (25) |
Total income tax expense | $ | 148 |  |  | $ | 302 |  |  | $ | 221 |
Federal Statutory Tax Rate and Income Tax Expense | Differences between income tax expense computed at the U.S. federal statutory tax rate of 21% and income tax expense as reflected in the Consolidated Statements of Operations are as follows:
Years ended December 31 | 2022 |  | 2021 |  | 2020
Income tax expense at statutory rate | $ | 318 |  | 21.0 | % |  | $ | 326 |  | 21.0 | % |  | $ | 246 |  | 21.0 | %
State income taxes, net of federal benefit | 76 |  | 5.0 | % |  | 55 |  | 3.5 | % |  | 39 |  | 3.3 | %
Non-U.S. tax expense on non-U.S. earnings | 1 |  | 0.1 | % |  | 8 |  | 0.5 | % |  | 5 |  | 0.5 | %
U.S. tax expense (benefit) on undistributed non-U.S. earnings | (43) |  | (2.8) | % |  | 6 |  | 0.4 | % |  | (2) |  | (0.2) | %
Intra-group IP transfer | (77) |  | (5.1) | % |  | — |  | — | % |  | — |  | — | %
Stock compensation | (68) |  | (4.5) | % |  | (32) |  | (2.1) | % |  | (48) |  | (4.1) | %
Valuation allowances | (51) |  | (3.4) | % |  | (34) |  | (2.2) | % |  | 4 |  | 0.3 | %
Research credits | (16) |  | (1.1) | % |  | (20) |  | (1.3) | % |  | (28) |  | (2.4) | %
Reserve for uncertain tax positions | (6) |  | (0.4) | % |  | (10) |  | (0.6) | % |  | — |  | — | %
Other tax expense (benefit) | 14 |  | 0.9 | % |  | 3 |  | 0.2 | % |  | 5 |  | 0.4 | %
| $ | 148 |  | 9.8 | % |  | $ | 302 |  | 19.5 | % |  | $ | 221 |  | 18.8 | %
Schedule of Deferred Tax Assets and Liabilities | Significant components of deferred tax assets (liabilities) are as follows:
December 31 | 2022 |  | 2021
Inventory | $ | 38 |  |  | $ | 29 |
Accrued liabilities and allowances | 67 |  |  | 86 |
Employee benefits | 290 |  |  | 321 |
Capitalized items | 95 |  |  | (86) |
Tax basis differences on investments | 6 |  |  | (1) |
Depreciation tax basis differences on fixed assets | 1 |  |  | 23 |
Undistributed non-U.S. earnings | (38) |  |  | (36) |
Tax attribute carryforwards | 298 |  |  | 410 |
Business reorganization | 7 |  |  | 8 |
Warranty and customer liabilities | 22 |  |  | 27 |
Deferred revenue and costs | 382 |  |  | 213 |
Valuation allowances | (221) |  |  | (275) |
Operating lease assets | (116) |  |  | (95) |
Operating lease liabilities | 129 |  |  | 108 |
Other | 4 |  |  | 1 |
| $ | 964 |  |  | $ | 733 |
Summary of Tax Credit Carryforwards | Tax attribute carryforwards are as follows:
December 31, 2022 | Gross Tax Loss |  | Tax Effected |  | Expiration Period
United States: |  |  |  |  |
U.S. tax losses | $ | 109 |  |  | $ | 23 |  |  | 2029-2037
Foreign tax credits | — |  |  | 181 |  |  | 2023
General business credits | — |  |  | 1 |  |  | 2030-2033
State tax losses | — |  |  | 16 |  |  | 2023-2041
State tax credits | — |  |  | 6 |  |  | 2023-2041
Non-U.S. subsidiaries: |  |  |  |  |
Japan tax losses | 9 |  |  | 3 |  |  | 2023-2029
United Kingdom tax losses | 152 |  |  | 38 |  |  | Unlimited
Canada tax losses | 17 |  |  | 4 |  |  | 2034-2042
Spain tax credits | — |  |  | 11 |  |  | 2023-2029
Other subsidiaries tax losses | 29 |  |  | 6 |  |  | Various
Other subsidiaries tax credits | — |  |  | 9 |  |  | Various
|  |  | $ | 298 |  |  |
Unrecognized Tax Benefits, Including Those Attributable to Discontinued Operations | A roll-forward of unrecognized tax benefits is as follows:
(in millions) | 2022 |  | 2021
Balance at January 1 | $ | 43 |  |  | $ | 64 |
Additions based on tax positions related to current year | 1 |  |  | 1 |
Additions for tax positions of prior years | 2 |  |  | 2 |
Reductions for tax positions of prior years | (1) |  |  | — |
Settlements and agreements | (4) |  |  | (18) |
Lapse of statute of limitations | (6) |  |  | (6) |
Balance at December 31 | $ | 35 |  |  | $ | 43 |
Summary of Open Tax Years by Major Jurisdiction | A summary of open tax years by major jurisdiction is presented below:
Jurisdiction | Tax Years
United States | 2018-2022
Australia | 2018-2022
Canada | 2018-2022
Germany | 2018-2022
India | 1997-2022
Israel | 2019-2022
Poland | 2016-2022
Malaysia | 2015-2022
United Kingdom | 2020-2022

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