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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Income before income taxes | U.S. and foreign income before taxes are set forth below:
|  | 2023 |  | 2022 |  | 2021
U.S. |  | $ | 1,246 |  |  | $ | 1,124 |  |  | $ | 1,062 |
Foreign |  | 572 |  |  | 538 |  |  | 612 |
|  | $ | 1,818 |  |  | $ | 1,662 |  |  | $ | 1,674 |
Details of income tax provision (benefit) | The details of our income tax provision (benefit) are set forth below:
|  |  |  | 2023 |  | 2022 |  | 2021
Current: |  | Federal |  | $ | 221 |  |  | $ | 139 |  |  | $ | 45 |
|  | Foreign |  | 222 |  |  | 200 |  |  | 214 |
|  | State |  | 68 |  |  | 53 |  |  | 40 |
|  |  |  | $ | 511 |  |  | $ | 392 |  |  | $ | 299 |
Deferred: |  | Federal |  | $ | (121) |  |  | $ | (31) |  |  | $ | 21 |
|  | Foreign |  | (153) |  |  | (10) |  |  | (227) |
|  | State |  | (16) |  |  | (14) |  |  | 6 |
|  |  |  | $ | (290) |  |  | $ | (55) |  |  | $ | (200) |
|  |  |  | $ | 221 |  |  | $ | 337 |  |  | $ | 99 |
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:
|  | 2023 |  | 2022 |  | 2021
U.S. federal statutory rate |  | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State income tax, net of federal tax |  | 2.3 |  |  | 1.9 |  |  | 1.8 |
Statutory rate differential attributable to foreign operations |  | (1.7) |  |  | (2.0) |  |  | (1.0) |
Adjustments to reserves and prior years |  | 1.3 |  |  | 1.6 |  |  | 1.1 |
Excess tax benefits from stock-based awards |  | (1.1) |  |  | (1.4) |  |  | (2.7) |
Change in valuation allowances |  | — |  |  | (0.5) |  |  | (0.8) |
Impact of Russia Exit |  | (0.5) |  |  | 4.3 |  |  | — |
Intercompany restructuring and Valuations of Intellectual Property |  | (9.1) |  |  | (4.9) |  |  | (11.3) |
Nondeductible interest |  | — |  |  | — |  |  | 1.4 |
Impact of tax law changes |  | — |  |  | — |  |  | (3.8) |
Other, net |  | (0.1) |  |  | 0.3 |  |  | 0.2 |
Effective income tax rate |  | 12.1 | % |  | 20.3 | % |  | 5.9 | %
Details of deferred tax assets (liabilities) |
|  | 2023 |  | 2022
Operating losses and interest deduction carryforwards |  | $ | 230 |  |  | $ | 183 |
Capital losses |  | 71 |  |  | 70 |
Tax credit carryforwards |  | 188 |  |  | 206 |
Employee benefits |  | 75 |  |  | 74 |
Share-based compensation |  | 58 |  |  | 55 |
Lease-related liabilities |  | 242 |  |  | 240 |
Accrued liabilities and other |  | 59 |  |  | 40 |
Intangible assets |  | 610 |  |  | 520 |
Property, plant and equipment |  | 30 |  |  | 32 |
Deferred income |  | 103 |  |  | 103 |
Capitalized Research & Development Costs |  | 92 |  |  | 35 |
Gross deferred tax assets |  | 1,758 |  |  | 1,558 |
Deferred tax asset valuation allowances |  | (386) |  |  | (458) |
Net deferred tax assets |  | $ | 1,372 |  |  | $ | 1,100 |
Property, plant and equipment |  | $ | (51) |  |  | $ | (79) |
Operating lease right-of-use assets |  | (210) |  |  | (203) |
Employee benefits |  | (8) |  |  | (7) |
Derivative Instruments |  | (17) |  |  | (27) |
Other |  | (42) |  |  | (35) |
Gross deferred tax liabilities |  | $ | (328) |  |  | $ | (351) |
Net deferred tax assets (liabilities) |  | $ | 1,044 |  |  | $ | 749 |
The details of the 2023 and 2022 valuation allowance activity are set forth below:
|  | 2023 |  | 2022
Beginning of Year |  | $ | (458) |  |  | $ | (462) |
Increases |  | (19) |  |  | (22) |
Decreases |  | 91 |  |  | 21 |
Other Adjustments |  | — |  |  | 5 |
End of Year |  | $ | (386) |  |  | $ | (458) |
Reported in Consolidated Balance Sheets as:
|  | 2023 |  | 2022
Deferred income taxes |  | $ | 1,045 |  |  | $ | 750 |
Other liabilities and deferred credits |  | (1) |  |  | (1) |
|  | $ | 1,044 |  |  | $ | 749 |
Loss carryforwards, by year of expiration |
|  | Gross Amount |  | Deferred Tax Asset |  | Valuation Allowance |  | Expiration
Federal net operating losses - Indefinite |  | $ | 60 |  |  | $ | 13 |  |  | $ | — |  |  | None
Foreign net operating losses |  | 211 |  |  | 34 |  |  | (14) |  |  | 2024-2043
Foreign net operating losses - Indefinite |  | 414 |  |  | 98 |  |  | (20) |  |  | None
State net operating losses |  | 1,208 |  |  | 52 |  |  | (36) |  |  | 2024-2043
Foreign capital loss carryforward - Indefinite |  | 281 |  |  | 71 |  |  | (71) |  |  | None
Foreign tax credits (US Tax Return) |  | 150 |  |  | 150 |  |  | (117) |  |  | 2026-2032
Foreign country tax credits |  | 38 |  |  | 38 |  |  | (9) |  |  | 2031
State interest deduction carryforward - Indefinite |  | 681 |  |  | 33 |  |  | (32) |  |  | None
|  | $ | 3,043 |  |  | $ | 489 |  |  | $ | (299) |  |  |
Unrecognized tax benefits reconciliation |
|  | 2023 |  | 2022
Beginning of Year |  | $ | 128 |  |  | $ | 116 |
Additions on tax positions - current year |  | 9 |  |  | 4 |
Additions for tax positions - prior years |  | 42 |  |  | 8 |
Reductions for tax positions - prior years |  | (28) |  |  | — |
Reductions for settlements |  | — |  |  | — |
End of Year |  | $ | 151 |  |  | $ | 128 |

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