XML 39 R21.htm IDEA: XBRL DOCUMENT
v3.24.0.1

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The components of Income before income taxes are as follows for the years ended December 31:
|  | 2023 |  | 2022 |  | 2021
United States |  | $ | 692 |  |  | $ | 1,169 |  |  | $ | 1,256 |
International |  | 2,700 |  |  | 1,491 |  |  | 1,831 |
Total Income before income taxes |  | $ | 3,392 |  |  | $ | 2,660 |  |  | $ | 3,087 |
The Provision for income taxes consists of the following for the years ended December 31:
|  | 2023 |  | 2022 |  | 2021
United States |  | $ | 72 |  |  | $ | 199 |  |  | $ | 228 |
International |  | 865 |  |  | 494 |  |  | 521 |
Total Provision for income taxes |  | $ | 937 |  |  | $ | 693 |  |  | $ | 749 |
Temporary differences between accounting for financial statement purposes and accounting for tax purposes result in the current provision for taxes being higher (lower) than the total provision for income taxes as follows:
|  | 2023 |  | 2022 |  | 2021
Goodwill and intangible assets |  | $ | 1 |  |  | $ | 106 |  |  | $ | 50 |
Property, plant and equipment |  | (13) |  |  | 2 |  |  | (19) |
Pension and other retiree benefits |  | 68 |  |  | (1) |  |  | (4) |
Stock-based compensation |  | 2 |  |  | (3) |  |  | 11 |
Right-of-use assets/lease liabilities |  | 1 |  |  | (5) |  |  | (2) |
Tax credits and tax loss carryforwards, net of valuation allowance |  | 29 |  |  | 8 |  |  | (2) |
Deferred withholding tax |  | 7 |  |  | 8 |  |  | (16) |
Research and Experimentation Capitalization |  | 29 |  |  | 58 |  |  | — |
Other, net |  | 11 |  |  | (10) |  |  | 19 |
Total deferred tax benefit (provision) |  | $ | 135 |  |  | $ | 163 |  |  | $ | 37 |
The difference between the statutory U.S. federal income tax rate and the Company’s global effective tax rate as reflected in the Consolidated Statements of Income is as follows:
|  | 2023 |  | 2022 |  | 2021
Percentage of Income before income taxes |  |  |  |  |  |
Tax at United States statutory rate |  | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State income taxes, net of federal benefit |  | (0.1) |  |  | 0.8 |  |  | 1.1 |
Earnings taxed at other than United States statutory rate |  | 5.4 |  |  | 5.4 |  |  | 2.7 |
Non-deductible goodwill impairment charges |  | — |  |  | 1.9 |  |  | 2.2 |
Foreign-derived intangible income benefit |  | (2.4) |  |  | (2.6) |  |  | (2.2) |
Foreign tax matter |  | 3.7 |  |  | — |  |  | — |
Other, net |  | — |  |  | (0.4) |  |  | (0.5) |
Effective tax rate |  | 27.6 | % |  | 26.1 | % |  | 24.3 | %
The components of deferred tax assets (liabilities) are as follows at December 31:
|  | 2023 |  | 2022
Deferred tax liabilities: |  |  |  |
Goodwill and intangible assets |  | $ | (412) |  |  | $ | (405) |
Property, plant and equipment |  | (420) |  |  | (375) |
Right-of-use assets |  | (126) |  |  | (118) |
Deferred withholding tax |  | (96) |  |  | (103) |
Other |  | (34) |  |  | (27) |
Total deferred tax liabilities |  | (1,088) |  |  | (1,028) |
Deferred tax assets: |  |  |  |
Pension and other retiree benefits |  | 295 |  |  | 214 |
Tax credits and tax loss carryforwards |  | 356 |  |  | 169 |
Lease liabilities |  | 134 |  |  | 125 |
Accrued liabilities |  | 221 |  |  | 218 |
Stock-based compensation |  | 75 |  |  | 73 |
Research and Experimentation Capitalization |  | 87 |  |  | 58 |
Other |  | 60 |  |  | 52 |
Total deferred tax assets |  | 1,228 |  |  | 909 |
Valuation Allowance |  | $ | (287) |  |  | $ | (129) |
Net deferred tax assets |  | $ | 941 |  |  | $ | 780 |
Net deferred income taxes |  | $ | (147) |  |  | $ | (248) |
Applicable U.S. income and foreign withholding taxes have been provided on substantially all of the Company’s accumulated earnings of foreign subsidiaries. Net tax benefit of $19 and net tax expense of $164 and $146 were recorded directly through equity in 2023, 2022 and 2021 respectively. The net tax expense or benefit in each year predominantly includes current and future tax impacts related to benefit plans and the impact of currency translation adjustments. The Company uses a comprehensive model to recognize, measure, present and disclose in its financial statements uncertain tax positions that the Company has taken or expects to take on an income tax return. Unrecognized tax benefits activity for the years ended December 31, 2023, 2022 and 2021 is summarized below:
|  | 2023 |  | 2022 |  | 2021
Unrecognized tax benefits: |  |  |  |  |  |
Balance, January 1 |  | $ | 298 |  |  | $ | 245 |  |  | $ | 227 |
Increases as a result of tax positions taken during the current year |  | 73 |  |  | 32 |  |  | 26 |
Decreases of tax positions taken during prior years |  | (61) |  |  | (21) |  |  | (20) |
Increases of tax positions taken during prior years |  | 6 |  |  | 46 |  |  | 40 |
Decreases as a result of settlements with taxing authorities and the expiration of statutes of limitations |  | (2) |  |  | (2) |  |  | (23) |
Effect of foreign currency rate movements |  | — |  |  | (2) |  |  | (5) |
Balance, December 31 |  | $ | 314 |  |  | $ | 298 |  |  | $ | 245 |
If all of the unrecognized tax benefits for 2023 above were recognized, approximately $304 would impact the effective tax rate. It is reasonably possible that the amount of unrecognized benefits with respect to our uncertain tax positions could change in the next twelve months and such change may or may not be material. The Company recognized expense of approximately $10, $8 and $10 for interest and penalties related to the above unrecognized tax benefits within income tax expense in 2023, 2022 and 2021, respectively. The Company had accrued interest and penalties of approximately $45, $40 and $35 as of December 31, 2023, 2022 and 2021, respectively. In the third quarter of 2023, the Internal Revenue Service (the “IRS”) issued a notice giving taxpayers temporary relief from the effects of certain U.S. tax regulations that were issued in December 2021, which place greater restrictions on foreign taxes that are creditable against U.S. taxes on foreign-source income. This notice allowed taxpayers to defer the application of these new regulations through the end of 2023. In December 2023, the IRS issued further guidance modifying this temporary relief period to the date that a notice or other guidance withdrawing or modifying the temporary relief is issued. In the second quarter of 2023, the Company reassessed with its legal and tax advisers certain tax deductions taken in prior years by one of its subsidiaries and concluded that it is more likely than not that the deductions would not be sustained by the courts in that jurisdiction. The value of the tax deductions was not material to the Company in any year in which they were taken. The cumulative effect of the change in tax position of $148 was reflected as a discrete item in the second quarter’s income tax expense, partially offset by the reversal of certain prior years’ withholding tax reserves of $22 that are no longer required. The tax liability was paid in the quarter ended September 30, 2023. The current year impact of these changes is included in the Company’s full year effective income tax rate. The Company has ongoing federal, state and international income tax audits in various jurisdictions and evaluates uncertain tax positions that may be challenged by local tax authorities and not fully sustained. All U.S. federal income tax returns through December 31, 2013 have been audited by the IRS and there are limited matters which the Company plans to appeal for years 2010 through 2013. One such matter relates to the IRS assessment of taxes on the Company by imputing income on certain activities within one of our international operations, which is also under audit for the years 2014 through 2018. There were U.S. Tax Court rulings during 2023 in favor of the IRS against unrelated third parties on similar matters. Despite the U.S. Tax Court rulings, the Company continues to believe that the tax assessment against the Company is without merit. While there can be no assurances, the Company believes this matter will ultimately be decided in favor of the Company. The amount of tax plus interest for the years 2010 through 2018 is estimated to be approximately $145, which is not included in the Company’s uncertain tax positions. On August 16, 2022, the Inflation Reduction Act of 2022 (“IRA”) was enacted, which among other things, implements a 15% minimum tax on book income of certain large corporations effective for years beginning after December 31, 2022. Based on the Company’s analysis, as well as recently published guidance by the IRS, the IRA, and in particular the 15% minimum tax, did not have an impact on the Company’s Consolidated Financial Statements. The Company will continue to evaluate the potential impact of this law as additional guidance and clarification becomes available. The Company has made an accounting policy election to treat Global Intangible Low-Taxed Income taxes as a current period expense rather than including these amounts in the measurement of deferred taxes.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480990/946-20-50-13 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//740/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-14 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-21 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482526/740-270-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-17 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482603/740-30-50-2 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration