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INCOME TAXES (Tables) | 12 Months Ended
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Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Schedule of Income Tax Expense (Benefit) | Earnings before income taxes and the provision for income taxes are presented in the following table.
| Year Ended December 31,
(in millions) | 2023 |  | 2022 |  | 2021
Earnings (loss) before income taxes: |  |  |  |  |
U.S.1 | $ | (316) |  |  | $ | (40) |  |  | $ | (523) |
Non-U.S.1 | 1,307 |  |  | 953 |  |  | 1,033 |
Total | $ | 991 |  |  | $ | 913 |  |  | $ | 510 |
Provision for income taxes: |  |  |  |  |
Current: |  |  |  |  |
Federal | $ | 42 |  |  | $ | 49 |  |  | $ | 15 |
State | 8 |  |  | 7 |  |  | 5 |
Foreign | 299 |  |  | 233 |  |  | 232 |
Total current expense | 349 |  |  | 289 |  |  | 252 |
Deferred: |  |  |  |  |
Federal | (85) |  |  | (54) |  |  | (90) |
State | — |  |  | (8) |  |  | (10) |
Foreign | 25 |  |  | (32) |  |  | (87) |
Total deferred (benefit) expense | (60) |  |  | (94) |  |  | (187) |
Total provision for income taxes | $ | 289 |  |  | $ | 195 |  |  | $ | 65 |
__________________________ 1 In 2023, the U.S. loss before income taxes was primarily due to the realized and unrealized loss on debt and equity securities of $174 million that was primarily related to the Company’s investment in Wolfspeed convertible debt securities that was sold during the year. In 2021, the U.S. loss before income taxes was primarily related to the $362 million unrealized loss related to the Company’s investment in Romeo Power, Inc.
Schedule of Effective Income Tax Rate Reconciliation | The following table provides a reconciliation of tax expense based on the U.S. statutory tax rate to final tax expense.
| Year Ended December 31,
(in millions) | 2023 |  | 2022 |  | 2021
Income taxes at U.S. statutory rate of 21% | $ | 209 |  |  | $ | 192 |  |  | $ | 107 |
Increases (decreases) resulting from: |  |  |  |  |
Valuation allowance adjustments, net | 186 |  |  | 21 |  |  | (13) |
Net tax on remittance of foreign earnings | 45 |  |  | 36 |  |  | 35 |
Foreign rate differentials | 20 |  |  | 57 |  |  | 66 |
U.S. tax on foreign earnings | 18 |  |  | 10 |  |  | 10 |
State taxes, net of federal benefit | 6 |  |  | (3) |  |  | (6) |
Other permanent differences | 6 |  |  | 5 |  |  | 14 |
Impact of tax law and rate change | (1) |  |  | 1 |  |  | (19) |
Affiliates' earnings | (7) |  |  | (6) |  |  | (9) |
Reserve adjustments, settlements and claims | (15) |  |  | 13 |  |  | (20) |
Changes in accounting methods and filing positions | (18) |  |  | (15) |  |  | (7) |
Tax credits | (21) |  |  | (15) |  |  | (5) |
Foreign derived intangible income deduction | (23) |  |  | (23) |  |  | (8) |
Enhanced research and development deductions | (35) |  |  | (33) |  |  | (22) |
Tax holidays | (35) |  |  | (38) |  |  | (81) |
Deferred tax impact of intra-group transactions | (70) |  |  | — |  |  | — |
Other, net | 24 |  |  | (7) |  |  | 23 |
Provision for income taxes, as reported | $ | 289 |  |  | $ | 195 |  |  | $ | 65 |
Schedule of Reconciliation of Total Gross Unrecognized Tax Benefits | A roll forward of the Company’s total gross unrecognized tax benefits is presented below:
(in millions) | 2023 |  | 2022 |  | 2021
Balance, January 1 | $ | 172 |  |  | $ | 181 |  |  | $ | 198 |
Additions based on tax positions related to current year | 15 |  |  | 19 |  |  | 21 |
Reductions for tax positions of prior years | (11) |  |  | (7) |  |  | — |
Reductions for lapse in statute of limitations | (10) |  |  | — |  |  | (36) |
Reductions for closure of tax audits and settlements | (5) |  |  | (9) |  |  | — |
Translation adjustment | — |  |  | (12) |  |  | (2) |
Balance, December 31 | $ | 161 |  |  | $ | 172 |  |  | $ | 181 |
Schedule of Tax Jurisdiction | The Company is no longer subject to income tax examinations by tax authorities in its major tax jurisdictions as follows:
Tax jurisdiction |  | Years no longer subject to audit |  | Tax jurisdiction |  | Years no longer subject to audit
U.S. Federal |  | 2015 and prior |  | Japan |  | 2018 and prior
Barbados |  | 2016 and prior |  | Luxembourg |  | 2019 and prior
China |  | 2015 and prior |  | Mexico |  | 2015 and prior
France |  | 2015 and prior |  | Poland |  | 2016 and prior
Germany |  | 2015 and prior |  | South Korea |  | 2016 and prior
Hungary |  | 2017 and prior |  | United Kingdom |  | 2018 and prior
Schedule of Deferred Tax Assets (Liabilities) | The components of deferred tax assets and liabilities consist of the following:
| December 31,
(in millions) | 2023 |  | 2022
Deferred tax assets: |  |  |
Net operating loss and capital loss carryforwards | $ | 359 |  |  | $ | 256 |
Research and development capitalization | 211 |  |  | 143 |
Employee compensation | 43 |  |  | 41 |
State tax credits | 23 |  |  | 29 |
Unrecognized tax benefits | 21 |  |  | 24 |
Warranty | 20 |  |  | 20 |
Pension and other postemployment benefits | 4 |  |  | 10 |
Other comprehensive loss | 3 |  |  | — |
Unrealized loss on equity securities | — |  |  | 8 |
Foreign tax credits | — |  |  | 6 |
Other | 103 |  |  | 97 |
Total deferred tax assets | $ | 787 |  |  | $ | 634 |
Valuation allowance | (310) |  |  | (136) |
Net deferred tax asset | $ | 477 |  |  | $ | 498 |
Deferred tax liabilities: |  |  |
Goodwill and intangible assets | (135) |  |  | (194) |
Fixed assets | (121) |  |  | (113) |
Unremitted foreign earnings | (115) |  |  | (125) |
Unrealized gain on equity securities | (2) |  |  | — |
Other comprehensive income | — |  |  | (14) |
Other | (7) |  |  | (16) |
Total deferred tax liabilities | $ | (380) |  |  | $ | (462) |
Net deferred taxes | $ | 97 |  |  | $ | 36 |

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