INCOME TAXES (Tables)
|
12 Months Ended |
Dec. 31, 2020 |
Income Tax Disclosure [Abstract] |
|
Income Tax Expense Benefit |
The income tax expense (benefit) for the years ended December 31, 2020, 2019 and 2018 consists of the following (in millions):
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2020 |
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2019 |
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2018 |
Current: |
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|
|
|
U.S. Federal |
$ |
839 |
|
|
$ |
570 |
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|
$ |
89 |
|
U.S. State and Local |
100 |
|
|
183 |
|
|
7 |
|
Non-U.S. |
420 |
|
|
359 |
|
|
374 |
|
Total Current |
1,359 |
|
|
1,112 |
|
|
470 |
|
Deferred: |
|
|
|
|
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U.S. Federal |
(725) |
|
|
255 |
|
|
668 |
|
U.S. State and Local |
(159) |
|
|
(93) |
|
|
75 |
|
Non-U.S. |
26 |
|
|
(62) |
|
|
15 |
|
Total Deferred |
(858) |
|
|
100 |
|
|
758 |
|
Total Income Tax Expense |
$ |
501 |
|
|
$ |
1,212 |
|
|
$ |
1,228 |
|
|
Income Before Income Taxes |
Income before income taxes includes the following components (in millions):
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2020 |
|
2019 |
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2018 |
United States |
$ |
(39) |
|
|
$ |
3,972 |
|
|
$ |
4,307 |
|
Non-U.S. |
1,883 |
|
|
1,680 |
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|
1,712 |
|
Total Income Before Income Taxes: |
$ |
1,844 |
|
|
$ |
5,652 |
|
|
$ |
6,019 |
|
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Reconciliation of Statutory Federal Income Tax Rate to Effective Income Tax Rate |
A reconciliation of the statutory federal income tax rate to the effective income tax rate for the years ended December 31, 2020, 2019 and 2018 consists of the following:
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2020 |
|
2019 |
|
2018 |
Statutory U.S. federal income tax rate |
21.0 |
% |
|
21.0 |
% |
|
21.0 |
% |
U.S. state and local income taxes (net of federal benefit) (1)
|
(2.6) |
|
|
1.4 |
|
|
1.4 |
|
Non-U.S. tax rate differential |
1.6 |
|
|
0.3 |
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|
0.2 |
|
U.S. federal tax credits |
(3.6) |
|
|
(1.4) |
|
|
(1.1) |
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Goodwill and other asset impairments |
5.1 |
|
|
— |
|
|
— |
|
Net uncertain tax positions |
3.6 |
|
|
0.1 |
|
|
(0.6) |
|
Non-U.S. valuation allowance release |
— |
|
|
(1.2) |
|
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— |
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Other |
2.1 |
|
|
1.2 |
|
|
(0.5) |
|
Effective income tax rate |
27.2 |
% |
|
21.4 |
% |
|
20.4 |
% |
|
Deferred Tax Liabilities and Assets |
Deferred income tax assets and liabilities are comprised of the following as of December 31, 2020 and 2019 (in millions):
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2020 |
|
2019 |
Fixed assets and capitalized software |
$ |
(5,355) |
|
|
$ |
(4,720) |
|
|
|
|
|
Operating lease right-of-use assets |
(730) |
|
|
(685) |
|
Other |
(501) |
|
|
(538) |
|
Deferred tax liabilities |
(6,586) |
|
|
(5,943) |
|
|
|
|
|
Pension and postretirement benefits |
3,994 |
|
|
2,522 |
|
Loss and credit carryforwards |
325 |
|
|
328 |
|
Insurance reserves |
535 |
|
|
413 |
|
|
|
|
|
Stock compensation |
183 |
|
|
249 |
|
Accrued employee compensation |
583 |
|
|
287 |
|
Operating lease liabilities |
736 |
|
|
691 |
|
Other |
357 |
|
|
205 |
|
Deferred tax assets |
6,713 |
|
|
4,695 |
|
Deferred tax assets valuation allowance |
(88) |
|
|
(54) |
|
Deferred tax asset (net of valuation allowance) |
6,625 |
|
|
4,641 |
|
|
|
|
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Net deferred tax asset (liability) |
$ |
39 |
|
|
$ |
(1,302) |
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|
|
|
Amounts recognized in the consolidated balance sheets: |
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Deferred tax assets |
$ |
527 |
|
|
$ |
330 |
|
Deferred tax liabilities |
(488) |
|
|
(1,632) |
|
Net deferred tax asset (liability) |
$ |
39 |
|
|
$ |
(1,302) |
|
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U.S. State and Local Operating Loss and Credit Carryforwards |
Further, we have U.S. state and local operating loss and credit carryforwards as follows (in millions):
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2020 |
|
2019 |
U.S. state and local operating loss carryforwards |
$ |
1,253 |
|
|
$ |
1,374 |
|
U.S. state and local credit carryforwards |
$ |
108 |
|
|
$ |
110 |
|
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Summarized Activity Related to Unrecognized Tax Benefits |
The following table summarizes the activity related to our uncertain tax positions (in millions):
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Tax |
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Interest |
|
Penalties |
Balance at January 1, 2018 |
$ |
160 |
|
|
$ |
43 |
|
|
$ |
9 |
|
Additions for tax positions of the current year |
47 |
|
|
— |
|
|
1 |
|
Additions for tax positions of prior years |
7 |
|
|
10 |
|
|
— |
|
Reductions for tax positions of prior years for: |
|
|
|
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Changes based on facts and circumstances |
(43) |
|
|
(8) |
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|
(5) |
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Settlements during the period |
(1) |
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|
(1) |
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|
— |
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Lapses of applicable statute of limitations |
(3) |
|
|
— |
|
|
— |
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Balance as of December 31, 2018 |
167 |
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|
44 |
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|
5 |
|
Additions for tax positions of the current year |
6 |
|
|
— |
|
|
— |
|
Additions for tax positions of prior years |
51 |
|
|
13 |
|
|
— |
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Reductions for tax positions of prior years for: |
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Changes based on facts and circumstances |
(45) |
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|
(4) |
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|
(1) |
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Settlements during the period |
(3) |
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|
(1) |
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|
— |
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Lapses of applicable statute of limitations |
(4) |
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|
— |
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|
— |
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Balance as of December 31, 2019 |
172 |
|
|
52 |
|
|
4 |
|
Additions for tax positions of the current year |
61 |
|
|
— |
|
|
— |
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Additions for tax positions of prior years |
154 |
|
|
34 |
|
|
2 |
|
Reductions for tax positions of prior years for: |
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Changes based on facts and circumstances |
(54) |
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|
(24) |
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|
(2) |
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Settlements during the period |
— |
|
|
(1) |
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|
— |
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Lapses of applicable statute of limitations |
— |
|
|
— |
|
|
— |
|
Balance as of December 31, 2020 |
$ |
333 |
|
|
$ |
61 |
|
|
$ |
4 |
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