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INCOME TAXES | 12 Months Ended
--- | ---
Dec. 31, 2021
Income Tax Disclosure [Abstract] |
INCOME TAXES | INCOME TAXES
|  |  |  |  | (In Millions)
| 2021 |  | 2020 |  | 2019
Income from continuing operations before income taxes: |  |  |  |  |
U.S. | $ | 374 |  |  | $ | 892 |  |  | $ | 684 |
Foreign | 314 |  |  | 239 |  |  | 230 |
| $ | 688 |  |  | $ | 1,131 |  |  | $ | 914 |
Income tax expense: |  |  |  |  |
Currently payable: |  |  |  |  |
U.S. Federal | $ | 145 |  |  | $ | 170 |  |  | $ | 155 |
State and local | 40 |  |  | 33 |  |  | 46 |
Foreign | 93 |  |  | 69 |  |  | 70 |
Deferred: |  |  |  |  |
U.S. Federal | (57) |  |  | (9) |  |  | (23) |
State and local | (10) |  |  | 11 |  |  | (15) |
Foreign | (1) |  |  | (5) |  |  | (3) |
| $ | 210 |  |  | $ | 269 |  |  | $ | 230 |
Deferred tax assets at December 31: |  |  |  |  |
Receivables | $ | 14 |  |  | $ | 9 |  |  |
Inventories | 17 |  |  | 17 |  |  |
Other assets, including stock-based compensation | 18 |  |  | 17 |  |  |
Accrued liabilities | 58 |  |  | 82 |  |  |
Noncurrent operating lease liabilities | 40 |  |  | 35 |  |  |
Other long-term liabilities | 79 |  |  | 96 |  |  |
Net operating loss carryforward | 26 |  |  | 56 |  |  |
Tax credit carryforward | 11 |  |  | 9 |  |  |
| 263 |  |  | 321 |  |  |
Valuation allowance | (17) |  |  | (35) |  |  |
| 246 |  |  | 286 |  |  |
Deferred tax liabilities at December 31: |  |  |  |  |
Property and equipment | 62 |  |  | 67 |  |  |
Operating lease right-of-use assets | 43 |  |  | 39 |  |  |
Intangibles | 75 |  |  | 74 |  |  |
Investment in foreign subsidiaries | 10 |  |  | 10 |  |  |
Other investments | 3 |  |  | 3 |  |  |
Other | 16 |  |  | 4 |  |  |
| 209 |  |  | 197 |  |  |
Net deferred tax asset at December 31 | $ | 37 |  |  | $ | 89 |  |  |
The net deferred tax asset consisted of net deferred tax assets (included in other assets) of $57 million and $109 million, and net deferred tax liabilities (included in other liabilities) of $20 million and $20 million, at December 31, 2021 and 2020, respectively. S. INCOME TAXES (Continued) We continue to maintain a valuation allowance on certain state and foreign deferred tax assets as of December 31, 2021. Should we determine that we would not be able to realize our remaining deferred tax assets, or the deferred tax assets that currently have a valuation allowance become realizable in these jurisdictions in the future, an adjustment to the valuation allowance would be recorded in the period such determination is made. The current portion of the state and local income tax includes a $10 million, $9 million and $8 million tax benefit from the reversal of an accrual for uncertain tax positions resulting primarily from the expiration of applicable statutes of limitations in 2021, 2020 and 2019, respectively. The deferred portion of the state and local taxes includes a $3 million tax expense in 2021 and a $1 million tax benefit in 2019, resulting from changes in valuation allowances against state and local deferred tax assets. The deferred portion of the foreign taxes includes a $2 million tax expense in 2021 and a $5 million and $4 million tax benefit in 2020 and 2019, respectively, from a change in the valuation allowances against foreign deferred tax assets. We incurred a $14 million state income tax expense in 2021 resulting from the loss on the termination of our qualified domestic defined-benefit pension plans providing no tax benefit in certain state jurisdictions. The loss from the divestiture of Hüppe provided no tax benefit in certain foreign jurisdictions resulting in a $4 million foreign income tax expense in 2021. We recorded a $16 million income tax expense due to the elimination of disproportionate tax effects from accumulated other comprehensive income (loss) relating to our interest rate swap following the retirement of the related debt, and the termination of our qualified domestic defined-benefit pension plans in 2021. Our capital allocation strategy includes reinvesting in our business, balancing share repurchases with potential acquisitions and maintaining a meaningful dividend. In order to provide greater flexibility in the execution of our capital allocation strategy, we may repatriate earnings from certain foreign subsidiaries. Our deferred tax balance on investment in foreign subsidiaries reflects the impact of all taxable temporary differences, including those related to substantially all undistributed foreign earnings, except those that are legally restricted, and consists primarily of foreign withholding taxes. Of the $37 million and $65 million deferred tax assets related to the net operating loss and tax credit carryforwards at December 31, 2021 and 2020, respectively, $25 million and $35 million, respectively, will expire within approximately 15 years and $12 million and $30 million, respectively, have no expiration. A reconciliation of the U.S. Federal statutory tax rate to the income tax expense on income from continuing operations before income taxes was as follows:
| Year Ended December 31,
| 2021 |  | 2020 |  | 2019
U.S. Federal statutory tax rate | 21 | % |  | 21 | % |  | 21 | %
State and local taxes, net of U.S. Federal tax benefit | 4 |  |  | 3 |  |  | 3 |
Higher taxes on foreign earnings | 3 |  |  | 1 |  |  | 2 |
U.S. and foreign taxes on distributed and undistributed foreign earnings | — |  |  | — |  |  | 1 |
Stock-based compensation | (1) |  |  | (1) |  |  | (1) |
Business divestiture with no tax impact | 1 |  |  | — |  |  | — |
Disproportionate tax effects | 2 |  |  | — |  |  | — |
Other, net | 1 |  |  | — |  |  | (1) |
Effective tax rate | 31 | % |  | 24 | % |  | 25 | %
Income taxes paid were $246 million, $442 million and $384 million in 2021, 2020 and 2019, respectively. S. INCOME TAXES (Concluded) A reconciliation of the beginning and ending liability for uncertain tax positions, including related interest and penalties, is as follows, in millions:
| Uncertain Tax Positions |  | Interest and Penalties |  | Total
Balance at January 1, 2020 | $ | 63 |  |  | $ | 10 |  |  | $ | 73 |
Current year tax positions: |  |  |  |  |
Additions | 22 |  |  | — |  |  | 22 |
Reductions | (2) |  |  | — |  |  | (2) |
Prior year tax positions: |  |  |  |  |
Additions | 2 |  |  | — |  |  | 2 |
Reductions | (2) |  |  | — |  |  | (2) |
Lapse of applicable statute of limitations | (9) |  |  | — |  |  | (9) |
Balance at December 31, 2020 | $ | 74 |  |  | $ | 10 |  |  | $ | 84 |
Current year tax positions: |  |  |  |  |
Additions | 19 |  |  | — |  |  | 19 |
Reductions | (2) |  |  | — |  |  | (2) |
Prior year tax positions: |  |  |  |  |
Additions | 1 |  |  | — |  |  | 1 |
Reductions | (1) |  |  | — |  |  | (1) |
Lapse of applicable statute of limitations | (10) |  |  | — |  |  | (10) |
Interest and penalties recognized in income tax expense | — |  |  | 1 |  |  | 1 |
Balance at December 31, 2021 | $ | 81 |  |  | $ | 11 |  |  | $ | 92 |
If recognized, $64 million and $58 million of the liability for uncertain tax positions at December 31, 2021 and 2020, respectively, net of any U.S. Federal tax benefit, would impact our effective tax rate. Of the $92 million and $84 million total liability for uncertain tax positions (including related interest and penalties) at December 31, 2021 and 2020, respectively, $88 million and $81 million are recorded in other liabilities, respectively, and $4 million and $3 million are recorded as a net offset to other assets, respectively. We file income tax returns in the U.S. Federal jurisdiction, and various local, state and foreign jurisdictions. We continue to participate in the Compliance Assurance Process ("CAP"). CAP is a real-time audit of the U.S. Federal income tax return that allows the Internal Revenue Service ("IRS"), working in conjunction with us, to determine tax return compliance with the U.S. Federal tax law prior to filing the return. This program provides us with greater certainty about our tax liability for a given year within months, rather than years, of filing our annual tax return and greatly reduces the need for recording a liability for U.S. Federal uncertain tax positions. The IRS has completed their examination of our consolidated U.S. Federal tax returns through 2020. With few exceptions, we are no longer subject to state or foreign income tax examinations on filed returns for years before 2018. As a result of tax audit closings, settlements and the expiration of applicable statutes of limitation in various jurisdictions within the next 12 months, we anticipate that it is reasonably possible the liability for uncertain tax positions could be reduced by approximately $10 million.

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- 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 -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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