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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Income before income taxes | U.S. and foreign income before taxes are set forth below:
|  | 2020 |  | 2019 |  | 2018
U.S. |  | $ | 684 |  |  | $ | 466 |  |  | $ | 726 |
Foreign |  | 336 |  |  | 907 |  |  | 1,113 |
|  | $ | 1,020 |  |  | $ | 1,373 |  |  | $ | 1,839 |
Details of income tax provision (benefit) | The details of our income tax provision (benefit) are set forth below:
|  |  |  | 2020 |  | 2019 |  | 2018
Current: |  | Federal |  | $ | 37 |  |  | $ | 129 |  |  | $ | 102 |
|  | Foreign |  | 121 |  |  | 166 |  |  | 181 |
|  | State |  | 23 |  |  | 16 |  |  | 25 |
|  |  |  | $ | 181 |  |  | $ | 311 |  |  | $ | 308 |
Deferred: |  | Federal |  | $ | (21) |  |  | $ | (16) |  |  | $ | (24) |
|  | Foreign |  | (29) |  |  | (213) |  |  | 5 |
|  | State |  | (15) |  |  | (3) |  |  | 8 |
|  |  |  | $ | (65) |  |  | $ | (232) |  |  | $ | (11) |
|  |  |  | $ | 116 |  |  | $ | 79 |  |  | $ | 297 |
Effective income tax and tax rate reconciliation | The reconciliation of income taxes calculated at the U.S. federal statutory rate to our effective tax rate is set forth below:
|  | 2020 |  | 2019 |  | 2018
U.S. federal statutory rate |  | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State income tax, net of federal tax |  | 1.0 |  |  | 0.9 |  |  | 0.8 |
Statutory rate differential attributable to foreign operations |  | (0.9) |  |  | 0.9 |  |  | (4.6) |
Adjustments to reserves and prior years |  | (1.7) |  |  | 2.3 |  |  | 2.8 |
Excess tax benefits from stock-based awards |  | (3.4) |  |  | (3.6) |  |  | (2.4) |
Change in valuation allowances |  | (2.5) |  |  | (0.6) |  |  | 0.7 |
Intercompany restructuring |  | (0.3) |  |  | (16.6) |  |  | — |
Impact of Tax Law Changes |  | (2.5) |  |  | — |  |  | (1.9) |
Other, net |  | 0.7 |  |  | 1.4 |  |  | (0.2) |
Effective income tax rate |  | 11.4 | % |  | 5.7 | % |  | 16.2 | %
Details of deferred tax assets (liabilities) | The details of 2020 and 2019 deferred tax assets (liabilities) are set forth below:
|  | 2020 |  | 2019
Operating losses and interest deduction carryforwards |  | $ | 181 |  |  | $ | 176 |
Capital losses |  | 3 |  |  | 3 |
Tax credit carryforwards |  | 226 |  |  | 230 |
Employee benefits |  | 82 |  |  | 85 |
Share-based compensation |  | 58 |  |  | 55 |
Lease-related liabilities |  | 199 |  |  | 199 |
Accrued liabilities and other |  | 47 |  |  | 49 |
Derivative instruments |  | 50 |  |  | 30 |
Intangible assets |  | 678 |  |  | 602 |
Property, plant and equipment |  | 31 |  |  | 21 |
Deferred income |  | 81 |  |  | 55 |
Gross deferred tax assets |  | 1,636 |  |  | 1,505 |
Deferred tax asset valuation allowances |  | (789) |  |  | (787) |
Net deferred tax assets |  | $ | 847 |  |  | $ | 718 |
Intangible assets, including goodwill |  | $ | (1) |  |  | $ | (40) |
Property, plant and equipment |  | (75) |  |  | (44) |
Operating lease right-of-use assets |  | (161) |  |  | (156) |
Other |  | (57) |  |  | (31) |
Gross deferred tax liabilities |  | $ | (294) |  |  | $ | (271) |
Net deferred tax assets (liabilities) |  | $ | 553 |  |  | $ | 447 |
The details of the 2020 valuation allowance activity are set forth below:
|  | 2020 |  | 2019
Beginning of Year |  | $ | (787) |  |  | $ | (454) |
Increases |  | (64) |  |  | (384) |
Decreases |  | 45 |  |  | 57 |
Other Adjustments |  | 17 |  |  | (6) |
End of Year |  | $ | (789) |  |  | $ | (787) |
Net deferred tax assets (liabilities) for 2020 and 2019 are reported in our Consolidated Balance Sheets as Deferred income taxes.
Loss carryforwards, by year of expiration | Details of tax loss, credit carryforwards, and expiration dates along with valuation allowances as of December 31, 2020, are as follows:
|  | Gross Amount |  | Deferred Tax Asset |  | Valuation Allowance |  | Expiration
Federal net operating losses |  | $ | 25 |  |  | $ | 5 |  |  | $ | — |  |  | 2035-2036
Federal net operating losses - Indefinite |  | 61 |  |  | 13 |  |  | — |  |  | None
Foreign net operating losses |  | 32 |  |  | 10 |  |  | (10) |  |  | 2021-2030
Foreign net operating losses - Indefinite |  | 253 |  |  | 75 |  |  | (51) |  |  | None
State net operating losses |  | 1,268 |  |  | 63 |  |  | (48) |  |  | 2021-2039
Foreign capital loss carryforward - Indefinite |  | 14 |  |  | 3 |  |  | (3) |  |  | None
Foreign tax credits |  | 220 |  |  | 220 |  |  | (220) |  |  | 2023-2030
State tax credits |  | 8 |  |  | 6 |  |  | (5) |  |  | 2023
State interest deduction carryforward - Indefinite |  | 361 |  |  | 15 |  |  | (15) |  |  | None
|  | $ | 2,242 |  |  | $ | 410 |  |  | $ | (352) |  |  |
Unrecognized tax benefits reconciliation | A reconciliation of the beginning and ending unrecognized tax benefits follows:
|  | 2020 |  | 2019
Beginning of Year |  | $ | 188 |  |  | $ | 113 |
Additions on tax positions - current year |  | 5 |  |  | 84 |
Additions for tax positions - prior years |  | 34 |  |  | 54 |
Reductions for tax positions - prior years |  | (22) |  |  | (30) |
Reductions for settlements |  | (30) |  |  | (31) |
Reductions due to statute expiration |  | — |  |  | (2) |
Foreign currency translation adjustment |  | — |  |  | — |
End of Year |  | $ | 175 |  |  | $ | 188 |

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