INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2021

The income tax expense (benefit) for the years ended December 31, 2021, 2020 and 2019 consists of the following (in millions):


	2021		2020		2019
Current:
U.S. Federal	$	1,388	$	839	$	570
U.S. State and Local	194		100		183
Non-U.S.	478		420		359
Total Current	2,060		1,359		1,112
Deferred:
U.S. Federal	1,311		(725)		255
U.S. State and Local	273		(159)		(93)
Non-U.S.	61		26		(62)
Total Deferred	1,645		(858)		100
Total Income Tax Expense	$	3,705	$	501	$	1,212

Income Before Income Taxes

Income before income taxes includes the following components (in millions):


	2021		2020		2019
United States	$	14,220	$	(39)	$	3,972
Non-U.S.	2,375		1,883		1,680
Total Income Before Income Taxes:	$	16,595	$	1,844	$	5,652

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, 2021, 2020 and 2019 consists of the following:


	2021		2020		2019
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)	2.2		(2.6)		1.4
Non-U.S. tax rate differential	—		1.6		0.3
U.S. federal tax credits	(0.4)		(3.6)		(1.4)
Goodwill and other asset impairments	—		5.1		—
Net uncertain tax positions	0.6		3.6		0.1
Non-U.S. valuation allowance release	—		—		(1.2)
Other	(1.1)		2.1		1.2
Effective income tax rate	22.3	%	27.2	%	21.4	%

Deferred Tax Liabilities and Assets

Deferred income tax assets and liabilities are comprised of the following as of December 31, 2021 and 2020 (in millions):


	2021		2020
Fixed assets and capitalized software	$	(5,808)	$	(5,355)

Operating lease right-of-use assets	(839)		(730)
Other	(593)		(501)
Deferred tax liabilities	(7,240)		(6,586)

Pension and postretirement benefits	1,620		3,994
Loss and credit carryforwards	342		325
Insurance reserves	587		535

Stock compensation	219		183
Accrued employee compensation	453		583
Operating lease liabilities	874		736
Other	318		357
Deferred tax assets	4,413		6,713
Deferred tax assets valuation allowance	(122)		(88)
Deferred tax asset (net of valuation allowance)	4,291		6,625

Net deferred tax asset (liability)	$	(2,949)	$	39

Amounts recognized in the consolidated balance sheets:


Deferred tax assets	$	176	$	527
Deferred tax liabilities	(3,125)		(488)
Net deferred tax asset (liability)	$	(2,949)	$	39

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):


	2021		2020
U.S. state and local operating loss carryforwards	$	924	$	1,253
U.S. state and local credit carryforwards	$	90	$	108

Summarized Activity Related to Unrecognized Tax Benefits

The following table summarizes the activity related to our uncertain tax positions (in millions):


	Tax		Interest		Penalties
Balance as of January 1, 2019	$	167	$	44	$	5
Additions for tax positions of the current year	6		—		—
Additions for tax positions of prior years	51		13		—
Reductions for tax positions of prior years for:
Changes based on facts and circumstances	(45)		(4)		(1)
Settlements during the period	(3)		(1)		—
Lapses of applicable statute of limitations	(4)		—		—
Balance as of December 31, 2019	172		52		4
Additions for tax positions of the current year	61		—		—
Additions for tax positions of prior years	154		34		2
Reductions for tax positions of prior years for:
Changes based on facts and circumstances	(54)		(24)		(2)
Settlements during the period	—		(1)		—
Lapses of applicable statute of limitations	—		—		—
Balance as of December 31, 2020	333		61		4
Additions for tax positions of the current year	85		—		—
Additions for tax positions of prior years	107		23		—
Reductions for tax positions of prior years for:
Changes based on facts and circumstances	(42)		(4)		(2)
Settlements during the period	(3)		(2)		—
Lapses of applicable statute of limitations	—		—		—
Balance as of December 31, 2021	$	480	$	78	$	2