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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Geographic Allocation of Income and Provision for Income Taxes |
Geographic Allocation of Income (Loss) and Provision for (Benefit from) Income Taxes | For the Year Ended December 31,
(In millions) | 2020 | 2019 | 2018
Income (loss) from continuing operations before income taxes |  |  |
Domestic | $ | (83) |  | $ | (1,352) |  | $ | (5,040) |
Foreign | 758 |  | 1,036 |  | (1,766) |
Income (loss) from continuing operations before income taxes | $ | 675 |  | $ | (316) |  | $ | (6,806) |
Current tax expense (benefit) |  |  |
Federal | $ | 28 |  | $ | (11) |  | $ | (112) |
State and local | 9 |  | 1 |  | (32) |
Foreign | 222 |  | 317 |  | 446 |
Total current tax expense | $ | 259 |  | $ | 307 |  | $ | 302 |
Deferred tax (benefit) expense |  |  |
Federal | $ | (116) |  | $ | (392) |  | $ | (124) |
State and local | 27 |  | 156 |  | (39) |
Foreign | (251) |  | (117) |  | (170) |
Total deferred tax benefit | $ | (340) |  | $ | (353) |  | $ | (333) |
Benefit from income taxes on continuing operations | (81) |  | (46) |  | (31) |
Net income (loss) from continuing operations after taxes | $ | 756 |  | $ | (270) |  | $ | (6,775) |
Reconciliation to US Statutory Rate |
Reconciliation to U.S. Statutory Rate | For the Year Ended December 31,
| 2020 | 2019 | 2018
Statutory U.S. federal income tax rate | 21.0 | % | 21.0 | % | 21.0 | %
Effective tax rates on international operations - net 1 | (13.9) |  | (18.4) |  | 0.4 |
Acquisitions, divestitures and ownership restructuring activities 2, 3, 4 | (0.3) |  | (10.7) |  | (2.3) |
U.S. research and development credit | (2.9) |  | 7.0 |  | 0.1 |
Exchange gains/losses 5 | 3.5 |  | (1.8) |  | (1.3) |
SAB 118 Impact of Enactment of U.S. Tax Reform 6 | — |  | — |  | (3.0) |
State and local incomes taxes - net | 4.0 |  | 3.2 |  | 0.5 |
Impact of Swiss Tax Reform 7 | (27.0) |  | 11.9 |  | — |
Excess tax benefits/deficiencies from stock compensation | 1.0 |  | (0.6) |  | 0.1 |
Tax settlements and expiration of statute of limitations | 0.4 |  | 3.9 |  | (0.1) |
Goodwill impairment 8 | — |  | — |  | (15.2) |
Other - net | 2.2 |  | (0.9) |  | 0.3 |
Effective tax rate on income from continuing operations | (12.0) | % | 14.6 | % | 0.5 | %
1. Includes the effects of local and U.S. taxes related to earnings of non-U.S. subsidiaries, changes in the amount of unrecognized tax benefits associated with these earnings, losses at non-U.S. subsidiaries without local tax benefits due to valuation allowances, and other permanent differences between tax and U.S. GAAP results. Includes a tax benefit of $(51) million for the year ended December 31, 2020, related to a return to accrual adjustment associated with an elective change in accounting method for the 2019 tax year impact of The Act's foreign tax provisions. 2. See Notes 4 - Common Control Business Combination, and Note 5 - Divestitures and Other Transactions, to the Consolidated Financial Statements, for additional information. 3. Includes a net tax charge of $50 million related to repatriation activities to facilitate the Business Separations for the year ended December 31, 2018. 4. Includes a net tax charge of $25 million for the year ended December 31, 2018 related to an internal legal entity restructuring associated with the Business Separations. 5. Principally reflects the impact of foreign exchange gains and losses on net monetary assets for which no corresponding tax impact is realized. Further information about the company's foreign currency hedging program is included in Note 9 - Supplementary Information, and Note 22 - Financial Instruments, under the heading Foreign Currency Risk. 6. Reflects a net tax charge of $164 million associated with the company's completion of the accounting for the tax effects of The Act for the year ended December 31, 2018. 7. Reflects tax benefits of $(182) million primarily driven by the recognition of an elective cantonal component of the recent enactment of the Federal Act on Tax Reform and AHV Financing ("Swiss Tax Reform") for the year ended December 31, 2020. Reflects tax benefits of $(38) million associated with the enactment of the Federal Act on Tax Reform and AHV Financing ("Swiss Tax Reform"), for the year ended December 31, 2019. 8. Reflects the impact of the non-tax-deductible, non-cash impairment charge for the agriculture reporting unit and corresponding $75 million tax charge associated with a valuation allowance recorded against the net deferred tax asset position of a legal entity in Brazil for the year ended December 31, 2018.
Deferred Tax Balances |
Deferred Tax Balances at December 31 | 2020 | 2019
(In millions) | Assets | Liabilities | Assets | Liabilities
Property | $ | — |  | $ | 170 |  | $ | — |  | $ | 369 |
Tax loss and credit carryforwards 1 | 497 |  | — |  | 761 |  | — |
Accrued employee benefits | 1,415 |  | — |  | 1,717 |  | — |
Other accruals and reserves | 238 |  | — |  | 135 |  | — |
Intangibles | — |  | 2,418 |  | — |  | 2,738 |
Inventory | 127 |  | — |  | 25 |  | — |
Research and development capitalization | 186 |  | — |  | 131 |  | — |
Investments | 56 |  | — |  | 53 |  | — |
Unrealized exchange gains/losses | 2 |  | — |  | — |  | 39 |
Other – net | 91 |  | — |  | 148 |  | — |
Subtotal | $ | 2,612 |  | $ | 2,588 |  | $ | 2,970 |  | $ | 3,146 |
Valuation allowances 2 | (453) |  | — |  | (457) |  | — |
Total | $ | 2,159 |  | $ | 2,588 |  | $ | 2,513 |  | $ | 3,146 |
Net Deferred Tax Liability | $ | (429) |  |  | $ | (633) |  |
1. Primarily related to the realization of recorded tax benefits on tax loss and credit carryforwards from operations in the United States, Brazil, and Spain. 2. During the year ended December 31, 2020, the company established a $19 million state tax valuation allowance in the U.S. based on a change in judgement about the realizability of a deferred tax asset. During the year ended December 31, 2019, the company released a valuation allowance against the net deferred tax asset position of a legal entity in Switzerland in connection with an internal merger, resulting in a tax benefit of $(34) million. During the year ended December 31, 2018, the company established a full valuation allowance against the net deferred tax asset position of a legal entity in Brazil due to revised financial projections, resulting in tax expense of $75 million. See Note 15 - Goodwill and Other Intangible Assets, to the Consolidated Financial Statements, for additional information. However, it is reasonably possible that sufficient positive evidence required to release all, or a portion, of certain valuation allowance in certain jurisdictions will exist within the next 12 months.
Operating Loss and Tax Credit Carryforwards |
Operating Loss and Tax Credit Carryforwards | Deferred Tax Asset
(In millions) | 2020 | 2019
Operating loss carryforwards |  |
Expire within 5 years | $ | 99 |  | $ | 131 |
Expire after 5 years or indefinite expiration | 343 |  | 400 |
Total operating loss carryforwards | $ | 442 |  | $ | 531 |
Tax credit carryforwards |  |
Expire within 5 years | $ | 14 |  | $ | 30 |
Expire after 5 years or indefinite expiration | 41 |  | 200 |
Total tax credit carryforwards | $ | 55 |  | $ | 230 |
Total Operating Loss and Tax Credit Carryforwards | $ | 497 |  | $ | 761 |
Total Gross Unrecognized Tax Benefits |
Total Gross Unrecognized Tax Benefits | For the Year Ended December 31,
(In millions) | 2020 | 2019 | 2018
Total unrecognized tax benefits as of beginning of period | $ | 426 |  | $ | 749 |  | $ | 741 |
Decreases related to positions taken on items from prior years | (14) |  | (167) |  | (44) |
Increases related to positions taken on items from prior years | 5 |  | 77 |  | 74 |
Increases related to positions taken in the current year | 6 |  | 54 |  | 9 |
Settlement of uncertain tax positions with tax authorities | (18) |  | (9) |  | (13) |
Impact of Internal Reorganizations | — |  | (278) |  | — |
Decreases due to expiration of statutes of limitations | (7) |  | — |  | (5) |
Exchange loss (gain) | (3) |  | — |  | (13) |
Total unrecognized tax benefits as of end of period | $ | 395 |  | $ | 426 |  | $ | 749 |
Total unrecognized tax benefits that, if recognized, would impact the effective tax rate | $ | 156 |  | $ | 188 |  | $ | 45 |
Total amount of interest and penalties (benefits) recognized in provision for (benefit from) income taxes on continuing operations | $ | (2) |  | $ | (4) |  | $ | 11 |
Total accrual for interest and penalties associated with unrecognized tax benefits at end of period | $ | 18 |  | $ | 24 |  | $ | 45 |
Tax Year Subject to Examination |
Tax Years Subject to Examination by Major Tax Jurisdiction at December 31, | Earliest Open Year
Jurisdiction
Argentina | 2014
Brazil | 2014
Canada | 2012
China | 2008
France | 2017
India | 2007
Italy | 2015
Switzerland | 2015
United States: |
Federal income tax | 2012
State and local income tax | 2001

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