Income taxes (Tables)

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

Reconciliation of the U.S. federal statutory rate to effective rate

Reconciliation of the U.S. federal statutory rate to effective rate:

	Years ended December 31,
(Millions of dollars)	2024				2023				2022
Taxes at U.S. statutory rate	$	2,809	21.0	%	$	2,740	21.0	%	$	1,838	21.0	%
(Decreases) increases resulting from:
Non-U.S. subsidiaries taxed at other than the U.S. rate	186		1.4	%	129		1.0	%	184		2.1	%
State and local taxes, net of federal 1	121		0.9	%	93		0.7	%	91		1.0	%
U.S. tax incentives	(245)		(1.8)	%	(170)		(1.3)	%	(166)		(1.9)	%
Tax law change related to currency translation	(224)		(1.7)	%	—		—	%	—		—	%
Nondeductible goodwill	—		—	%	—		—	%	159		1.8	%
Other—net	(18)		(0.1)	%	(11)		(0.1)	%	(39)		(0.4)	%
Provision (benefit) for income taxes	$	2,629	19.7	%	$	2,781	21.3	%	$	2,067	23.6	%
1 Excludes amount included in nondeductible goodwill and tax law change related to currency translation line items.

Components of profit (loss) before taxes

The components of profit (loss) before taxes were:
	Years ended December 31,
(Millions of dollars)	2024		2023		2022
U.S.	$	6,219	$	6,463	$	2,962
Non-U.S.	7,154		6,587		5,790
	$	13,373	$	13,050	$	8,752

Components of the provision (benefit) for income taxes

The components of the provision (benefit) for income taxes were:
	Years ended December 31,
(Millions of dollars)	2024		2023		2022
Current tax provision (benefit):
U.S.1	$	1,584	$	1,627	$	1,055
Non-U.S.	1,531		1,592		1,255
State (U.S.)	135		154		134
	3,250		3,373		2,444
Deferred tax provision (benefit):
U.S.1	(553)		(391)		(404)
Non-U.S.	(69)		(164)		50
State (U.S.)	1		(37)		(23)
	(621)		(592)		(377)
Total provision (benefit) for income taxes	$	2,629	$	2,781	$	2,067
1 Includes U.S. taxes related to non-U.S. earnings. We account for U.S. taxes on global intangible low-taxed income as a period cost.

Deferred income tax assets and liabilities

The amount of deferred income taxes at December 31, included on the following lines in Statement 3, were as follows:

	December 31,
(Millions of dollars)	2024		2023
Assets:
Noncurrent deferred and refundable income taxes	$	3,191	$	2,634
Liabilities:
Other liabilities	432		454
Deferred income taxes—net	$	2,759	$	2,180

The components of deferred tax assets and liabilities were:
	December 31,
(Millions of dollars)	2024		2023
Deferred income tax assets:
Research expenditures	$	1,735	$	1,350
Tax carryforwards	1,346		1,389
Postemployment benefits	560		656
Employee compensation and benefits	531		634
Warranty reserves	303		325
Post sale discounts	260		253
Inventory valuation	183		138
Lease obligations	151		144
Other—net	288		205
	5,357		5,094
Deferred income tax liabilities:
Capital and intangible assets, including lease basis differences	(1,270)		(1,312)
Other outside basis differences	(253)		(267)
Undistributed profits, including translation adjustments	(201)		(401)
	(1,724)		(1,980)
Valuation allowance for deferred tax assets	(874)		(934)
Deferred income taxes—net	$	2,759	$	2,180

Schedule of unrecognized tax benefits roll forward

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits for uncertain tax positions, including positions impacting only the timing of tax benefits, follows.

 

Reconciliation of unrecognized tax benefits: 1
	Years ended December 31,
(Millions of dollars)	2024		2023		2022
Beginning balance	$	1,223	$	1,140	$	1,886
Additions for tax positions related to current year	118		94		72
Additions for tax positions related to prior years	49		42		91
Reductions for tax positions related to prior years	(30)		(19)		(66)
Reductions for settlements 2	(60)		(27)		(840)
Reductions for expiration of statute of limitations	(11)		(7)		(3)
Ending balance	$	1,289	$	1,223	$	1,140
Amount that, if recognized, would impact the effective tax rate	$	1,137	$	997	$	874

1Foreign currency impacts are included within each line as applicable.

2Includes cash payment or other reduction of assets to settle liability.