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INCOME TAXES (Tables) | 12 Months Ended
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Dec. 31, 2024
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) | 2024 |  | 2023 |  | 2022
Earnings (loss) before income taxes: |  |  |  |  |
U.S.1 | $ | (303) |  |  | $ | (316) |  |  | $ | (40) |
Non-U.S.1 | 842 |  |  | 1,307 |  |  | 953 |
Total | $ | 539 |  |  | $ | 991 |  |  | $ | 913 |
Provision for income taxes: |  |  |  |  |
Current: |  |  |  |  |
Federal | $ | 27 |  |  | $ | 42 |  |  | $ | 49 |
State | 1 |  |  | 8 |  |  | 7 |
Foreign | 239 |  |  | 299 |  |  | 233 |
Total current expense | 267 |  |  | 349 |  |  | 289 |
Deferred: |  |  |  |  |
Federal | (198) |  |  | (85) |  |  | (54) |
State | (5) |  |  | — |  |  | (8) |
Foreign | 47 |  |  | 25 |  |  | (32) |
Total deferred benefit | (156) |  |  | (60) |  |  | (94) |
Total provision for income taxes | $ | 111 |  |  | $ | 289 |  |  | $ | 195 |
__________________________ 1 In 2023, the U.S. loss before income taxes included 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.
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) | 2024 |  | 2023 |  | 2022
Income taxes at U.S. statutory rate of 21% | $ | 114 |  |  | $ | 209 |  |  | $ | 192 |
Increases (decreases) resulting from: |  |  |  |  |
Impairment of goodwill | 151 |  |  | — |  |  | — |
Net tax on remittance of foreign earnings | 38 |  |  | 45 |  |  | 36 |
Foreign rate differentials | 14 |  |  | 20 |  |  | 57 |
Valuation allowance adjustments, net | 23 |  |  | 186 |  |  | 21 |
Other permanent differences | 17 |  |  | 18 |  |  | 14 |
Changes in accounting methods and filing positions | (10) |  |  | (18) |  |  | (15) |
State taxes, net of federal benefit | (6) |  |  | 6 |  |  | (3) |
Affiliates' earnings | (6) |  |  | (7) |  |  | (6) |
Foreign derived intangible income deduction | (11) |  |  | (23) |  |  | (23) |
Impact of tax law and rate change | (9) |  |  | (1) |  |  | 1 |
U.S. tax on foreign earnings | 24 |  |  | 18 |  |  | 10 |
Enhanced research and development deductions | (29) |  |  | (35) |  |  | (33) |
Tax credits | (34) |  |  | (21) |  |  | (15) |
Deferred tax impact of intra-group transactions | (36) |  |  | (70) |  |  | — |
Tax holidays | (46) |  |  | (35) |  |  | (38) |
Reserve adjustments, settlements and claims | (99) |  |  | (15) |  |  | 13 |
Other, net | 16 |  |  | 12 |  |  | (16) |
Provision for income taxes, as reported | $ | 111 |  |  | $ | 289 |  |  | $ | 195 |
Schedule of Unrecognized Tax Benefits Roll Forward | A roll forward of the Company’s total gross unrecognized tax benefits is presented below:
(in millions) | 2024 |  | 2023 |  | 2022
Balance, January 1 | $ | 161 |  |  | $ | 172 |  |  | $ | 181 |
Additions based on tax positions related to current year | 9 |  |  | 15 |  |  | 19 |
Reductions for closure of tax audits and settlements | — |  |  | (5) |  |  | (9) |
Reductions for tax positions of prior years | (1) |  |  | (11) |  |  | (7) |
Reductions for lapse in statute of limitations | (67) |  |  | (10) |  |  | — |
Translation adjustment | (7) |  |  | — |  |  | (12) |
Balance, December 31 | $ | 95 |  |  | $ | 161 |  |  | $ | 172 |
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 |  | 2016 and prior |  | Luxembourg |  | 2017 and prior
China |  | 2018 and prior |  | Mexico |  | 2017 and prior
France |  | 2020 and prior |  | Poland |  | 2016 and prior
Germany |  | 2015 and prior |  | South Korea |  | 2017 and prior
Hungary |  | 2018 and prior |  | United Kingdom |  | 2019 and prior
Japan |  | 2023 and prior |  |  |  |
Schedule of Deferred Tax Assets (Liabilities) | The components of deferred tax assets and liabilities consist of the following:
| December 31,
(in millions) | 2024 |  | 2023
Deferred tax assets: |  |  |
Net operating loss and capital loss carryforwards | $ | 305 |  |  | $ | 359 |
Research and development capitalization | 291 |  |  | 211 |
Employee compensation | 45 |  |  | 43 |
State tax credits | 38 |  |  | 23 |
Warranty | 30 |  |  | 20 |
Unrecognized tax benefits | 25 |  |  | 27 |
Foreign tax credits | 9 |  |  | — |
Pension and other postemployment benefits | — |  |  | 4 |
Other comprehensive loss | — |  |  | 3 |
Other | 126 |  |  | 97 |
Total deferred tax assets | $ | 869 |  |  | $ | 787 |
Valuation allowance | (325) |  |  | (310) |
Net deferred tax asset | $ | 544 |  |  | $ | 477 |
Deferred tax liabilities: |  |  |
Fixed assets | (107) |  |  | (121) |
Goodwill and intangible assets | (100) |  |  | (135) |
Unremitted foreign earnings | (95) |  |  | (115) |
Other comprehensive income | (35) |  |  | — |
Pension and other postemployment benefits | (4) |  |  | — |
Unrealized gain on equity securities | (2) |  |  | (2) |
Other | (9) |  |  | (7) |
Total deferred tax liabilities | $ | (352) |  |  | $ | (380) |
Net deferred taxes | $ | 192 |  |  | $ | 97 |

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