XML 28 R14.htm IDEA: XBRL DOCUMENT
v3.24.0.1

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Income Taxes | INCOME TAXES 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 |
Provision for Income Taxes 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 |
Effective Tax Rate Reconciliation For purposes of the effective tax rate reconciliation, the company utilizes the U.S. statutory income tax rate of 21%. 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. Net Deferred Tax Liabilities 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) |
The company evaluates deferred tax assets quarterly to ensure that estimated future taxable income will be sufficient in character (e.g., capital gain versus ordinary income treatment), amount and timing to result in their recovery. After considering the positive and negative evidence, a valuation allowance is established to reduce the assets to their realizable value when management determines that it is more likely than not (i.e., greater than 50% likelihood) that a deferred tax asset will not be realized. Considerable judgment is required in establishing deferred tax valuation allowances. As of December 31, 2023, the company had $285 million of deferred tax assets relating to net operating losses (“NOLs”) and tax credits and $176 million of valuation allowances. These deferred tax assets include $235 million relating to NOLs of which $82 million expire within 5 years, $24 million expire after 5 years and $129 million have no expiration. The deferred tax assets also include $50 million related to credits of which $3 million expire within 5 years, $40 million expire after 5 years, and $7 million have no expiration. The valuation allowances of $176 million primarily relate to NOLs. Management has determined, based on financial projections and available tax strategies, that it is unlikely that the benefit of these losses will be realized. If events or circumstances change, valuation allowances are adjusted at that time resulting in an income tax benefit or charge. The company has $586 million of non-U.S income and withholding taxes accrued related to its investment in non-U.S. subsidiaries and equity investments. A provision has not been made for any additional non-U.S. income or withholding taxes at December 31, 2023 on approximately $4 billion of unremitted non-U.S. earnings on which the company intends to remain indefinitely reinvested or on other outside basis differences in its investments unrelated to unremitted earnings. A determination of these deferred taxes related to these amounts is not practicable. Uncertain Tax Positions Unrecognized income tax benefits represent income tax positions taken on income tax returns but not yet recognized in the consolidated financial statements. The company has unrecognized income tax benefits totaling $304 million, $325 million and $387 million as of December 31, 2023, 2022 and 2021, respectively. If recognized, the majority of the unrecognized tax benefits and related interest and penalties would be recorded as a benefit to income tax expense on the consolidated statements of income. 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. The company classifies interest income and expense related to income taxes as tax expense in the consolidated statements of income. The company recognized net interest benefit of $17 million and $3 million and expense of $15 million for the years ended December 31, 2023, 2022 and 2021, respectively. The company had $14 million and $35 million of accrued interest and penalties as of December 31, 2023 and 2022, respectively, which were recorded in other long-term liabilities in the consolidated balance sheets (See Note 7). 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
The company is currently under audit in a number of jurisdictions. As a result, it is reasonably possible that some of these matters will conclude or reach the stage where a change in unrecognized income tax benefits may occur within the next twelve months. At the time new information becomes available, the company will record any adjustment to income tax expense as required. Final determinations, if any, are not expected to be material to the consolidated financial statements. The company is also subject to income taxes in many hundreds of state and local taxing jurisdictions that are open to tax examinations.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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 -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org//1943274/2147480990/946-20-50-13 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//740/tableOfContent Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-14 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-21 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482526/740-270-50-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482685/740-10-50-17 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org//1943274/2147479360/740-10-S99-2 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482603/740-30-50-2 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration