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Income Taxes (Tables) | 12 Months Ended
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Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Schedule of U.S. and Foreign Pre-tax Income Table | Pre-tax income applicable to U.S. and non-U.S. operations is as follows:
(Millions of dollars) Year Ended December 31, | 2023 |  | 2022 |  | 2021
United States | $ | 2,859 |  |  | $ | 2,502 |  |  | $ | 2,020 |
Non-U.S. | 5,129 |  |  | 3,041 |  |  | 3,079 |
Total income before income taxes | $ | 7,988 |  |  | $ | 5,543 |  |  | $ | 5,099 |
Schedule of the Provision for Income Taxes Table | The following is an analysis of the provision for income taxes:
(Millions of dollars) Year Ended December 31, | 2023 |  | 2022 |  | 2021
Current tax expense (benefit) |  |  |  |  |
U.S. federal | $ | 291 |  |  | $ | 486 |  |  | $ | 287 |
State and local | 116 |  |  | 92 |  |  | 87 |
Non-U.S. | 1,491 |  |  | 1,239 |  |  | 1,142 |
| 1,898 |  |  | 1,817 |  |  | 1,516 |
Deferred tax expense (benefit) |  |  |  |  |
U.S. federal | 57 |  |  | (12) |  |  | 63 |
State and local | 5 |  |  | 7 |  |  | 8 |
Non-U.S. | (146) |  |  | (378) |  |  | (325) |
| (84) |  |  | (383) |  |  | (254) |
Total income taxes | $ | 1,814 |  |  | $ | 1,434 |  |  | $ | 1,262 |
Schedule of the Difference Between the Actual Income Tax Provision and the Amount Computed By Applying the US Statutory Income Tax Rate Table | An analysis of the difference between the provision for income taxes and the amount computed by applying the U.S. statutory income tax rate to pre-tax income follows:
(Dollar amounts in millions) Year Ended December 31, | 2023 |  | 2022 |  | 2021
U.S. statutory income tax | $ | 1,677 |  |  | 21.0 | % |  | $ | 1,164 |  |  | 21.0 | % |  | $ | 1,071 |  |  | 21.0 | %
State and local taxes – net of federal benefit | 105 |  |  | 1.3 | % |  | 84 |  |  | 1.5 | % |  | 83 |  |  | 1.6 | %
Tax on Non-U.S. activities (a) | 169 |  |  | 2.1 | % |  | 176 |  |  | 3.2 | % |  | 219 |  |  | 4.3 | %
Share-Based compensation | (66) |  |  | (0.8) | % |  | (41) |  |  | (0.7) | % |  | (56) |  |  | (1.1) | %
Russia/Ukraine Charges | — |  |  | — | % |  | 108 |  |  | 1.9 | % |  | — |  |  | — | %
Other (b) | (71) |  |  | (0.9) | % |  | (57) |  |  | (1.0) | % |  | (55) |  |  | (1.1) | %
Provision for income taxes | $ | 1,814 |  |  | 22.7 | % |  | $ | 1,434 |  |  | 25.9 | % |  | $ | 1,262 |  |  | 24.7 | %
________________________ (a)Primarily related to differences between the U.S. tax rate and the statutory tax rate in the countries in which the company operates. It also includes the U.S. tax impact of the non-U.S. activities and other non-U.S. permanent items and tax rate changes. Excluding 2021, which included an $83 million deferred income tax charge related to a tax rate increase in the U.K., these other items were not material. (b)Includes net tax benefits related to tax audit settlements of $54 million in 2023, of $71 million in 2022, and $47 million in 2021.
Schedule of the Composition of the Net Deferred Tax Liabilities in the Consolidated Balance Sheets Table | Net deferred tax liabilities included in the consolidated balance sheets are comprised of the following:
(Millions of dollars) December 31, | 2023 |  | 2022
Deferred tax liabilities |  |  |
Fixed assets | $ | 2,686 |  |  | $ | 2,775 |
Goodwill | 215 |  |  | 173 |
Other intangible assets | 2,872 |  |  | 2,939 |
Subsidiary/equity investments | 586 |  |  | 545 |
Other (a) | 456 |  |  | 471 |
| $ | 6,815 |  |  | $ | 6,903 |
Deferred tax assets |  |  |
Carryforwards | $ | 285 |  |  | $ | 289 |
Benefit plans and related (b)(c) | 243 |  |  | 165 |
Inventory | 82 |  |  | 68 |
Accruals and other (d) | 858 |  |  | 1,001 |
| $ | 1,468 |  |  | $ | 1,523 |
Less: Valuation allowances (e) | (176) |  |  | (276) |
| $ | 1,292 |  |  | $ | 1,247 |
Net deferred tax liabilities | $ | 5,523 |  |  | $ | 5,656 |
Recorded in the consolidated balance sheets as (Note 7): |  |  |
Other long-term assets | 226 |  |  | 230 |
Deferred credits | 5,749 |  |  | 5,886 |
| $ | 5,523 |  |  | $ | 5,656 |
________________________ (a)Includes $221 million in 2023 and $206 million in 2022 related to right-of-use lease assets. (b)Includes deferred tax asset of $60 million and deferred tax liability of $54 million in 2023 and 2022, respectively, related to pension / OPEB funded status (see Notes 7 and 16). (c)The amounts are net of non-US deferred tax liabilities of $187 million in 2023 and $315 million in 2022. (d)Includes $228 million in 2023 and $212 million in 2022 related to lease liabilities. (e)Summary of changes in valuation allowances relating to deferred tax assets follows (millions of dollars):
| 2023 |  | 2022 |  | 2021
Balance, January 1, | $ | (276) |  |  | $ | (235) |  |  | $ | (243) |
Income tax (charge) benefit | 65 |  |  | (44) |  |  | 8 |
Other, including write-offs | 34 |  |  | — |  |  | — |
Translation adjustments | 1 |  |  | 3 |  |  | — |
Balance, December 31, | $ | (176) |  |  | $ | (276) |  |  | $ | (235) |
Schedule of Valuation Allowances Relating To Deferred Tax Assets Table | Summary of changes in valuation allowances relating to deferred tax assets follows (millions of dollars):
| 2023 |  | 2022 |  | 2021
Balance, January 1, | $ | (276) |  |  | $ | (235) |  |  | $ | (243) |
Income tax (charge) benefit | 65 |  |  | (44) |  |  | 8 |
Other, including write-offs | 34 |  |  | — |  |  | — |
Translation adjustments | 1 |  |  | 3 |  |  | — |
Balance, December 31, | $ | (176) |  |  | $ | (276) |  |  | $ | (235) |
Schedule of Reconciliation of Unrecognized Tax Benefits Table | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
(Millions of dollars) | 2023 |  | 2022 |  | 2021
Unrecognized income tax benefits, January 1 | $ | 325 |  |  | $ | 387 |  |  | $ | 452 |
Additions for tax positions of prior years | 108 |  |  | 26 |  |  | 11 |
Reductions for tax positions of prior years (a) | (121) |  |  | (45) |  |  | (11) |
Additions for current year tax positions | — |  |  | — |  |  | 19 |
Reductions for settlements with taxing authorities (a)(b) | (1) |  |  | (23) |  |  | (60) |
Other (c) | (7) |  |  | (20) |  |  | (24) |
Unrecognized income tax benefits, December 31 | $ | 304 |  |  | $ | 325 |  |  | $ | 387 |
________________________ (a)2023 and 2022 amounts are primarily related to the settlement of tax audits. (b)Settlements are uncertain tax positions that were effectively settled with the taxing authorities, including positions where the company has agreed to amend its tax returns to eliminate the uncertainty. (c)Other includes reductions for statute of limitation lapses and foreign currency translation.
Schedule of Open Tax Years Subject to Examination by Major Jurisdiction Table | As of December 31, 2023, the company remained subject to examination in the following major tax jurisdictions for the tax years as indicated below:
Major tax jurisdictions | Open Years
North and South America |
United States | 2020 through 2023
Canada | 2014 through 2023
Mexico | 2014 through 2023
Brazil | 2008 through 2023
Europe and Africa |
France | 2019 through 2023
Germany | 2018 through 2023
Spain | 2010 through 2023
United Kingdom | 2021 through 2023
Asia and Australia |
Australia | 2019 through 2023
China | 2018 through 2023
India | 2006 through 2023
South Korea | 2020 through 2023

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