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INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2022


EARNINGS (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES	2022		2021		2020
U.S. earnings (loss)	$	(238)	$	(2,959)	$	(4,823)
Non-U.S. earnings (loss)	1,650		(724)		10,793
Total	$	1,412	$	(3,683)	$	5,970


PROVISION (BENEFIT) FOR INCOME TAXES	2022		2021		2020
Current
U.S. Federal	$	62	$	(1,347)	$	865
Non-U.S.	1,040		1,154		1,276
U.S. State	4		(85)		152
Deferred
U.S. Federal	(956)		(567)		(1,898)
Non-U.S.	466		608		(810)
U.S. State	(141)		(50)		(72)
Total	$	476	$	(286)	$	(487)

Reconciliation of U.S. Federal Statutory Income Tax Rate to Actual Income Tax Rate


RECONCILIATION OF U.S. FEDERAL STATUTORY INCOME TAX RATE TO ACTUAL INCOME TAX RATE	2022				2021				2020
	Amount		Rate		Amount		Rate		Amount		Rate
U.S. federal statutory income tax rate	$	297	21.0	%	$	(773)	21.0	%	$	1,254	21.0	%
Tax on global activities including exports	342		24.2		155		(4.2)		(47)		(0.8)
U.S. business credits(a)	(246)		(17.4)		(189)		5.1		(169)		(2.8)
Debt tender and related valuation allowances	30		2.1		940		(25.5)		—		—
Deductible stock and restructuring losses	—		—		(583)		15.8		(203)		(3.4)
Sale of Biopharma business	(13)		(0.9)		(5)		0.1		(1,447)		(24.2)
Goodwill impairments	—		—		—		—		184		3.1
All other – net(b)(c)(d)	66		4.7		169		(4.5)		(59)		(1.1)
	179		12.7		487		(13.2)		(1,741)		(29.2)
Actual income tax rate	$	476	33.7	%	$	(286)	7.8	%	$	(487)	(8.2)	%

(a)U.S. general business credits, primarily the credit for energy produced from renewable sources and the credit for research performed in the U.S.

(b)For the year ended December 31, 2022, included $134 million for separation income tax costs of which $66 million was due to the repatriation of previously reinvested earnings.

(c)For the year ended December 31, 2020, included $(140) million for the resolution of the IRS audit of our consolidated U.S. income tax returns for 2014-2015.

(d)Included for each period, the expense or benefit for U.S. state taxes reported above in the consolidated (benefit) provision for income taxes, net of 21.0% federal effect.

Unrecognized Tax Benefits

The balance of unrecognized tax benefits, the amount of related interest and penalties we have provided and what we believe to be the range of reasonably possible changes in the next 12 months (excluding the expected decrease to the GE balance of $552 million due to the spin-off of GE HealthCare) were:


UNRECOGNIZED TAX BENEFITS December 31	2022		2021		2020
Unrecognized tax benefits	$	3,951	$	4,224	$	4,191
Portion that, if recognized, would reduce tax expense and effective tax rate(a)	3,072		3,351		2,986
Accrued interest on unrecognized tax benefits	614		597		628
Accrued penalties on unrecognized tax benefits	111		146		179
Reasonably possible reduction to the balance of unrecognized tax benefits in succeeding 12 months	0-650		0-250		0-350
Portion that, if recognized, would reduce tax expense and effective tax rate(a)	0-600		0-200		0-250

(a) Some portion of such reduction may be reported as discontinued operations.

Unrecognized Tax Benefits Reconciliation


UNRECOGNIZED TAX BENEFITS RECONCILIATION	2022		2021		2020
Balance at January 1	$	4,224	$	4,191	$	4,169
Additions for tax positions of the current year	62		396		836
Additions for tax positions of prior years	120		327		326
Reductions for tax positions of prior years	(393)		(585)		(863)
Settlements with tax authorities	(8)		(33)		(127)
Expiration of the statute of limitations	(54)		(71)		(151)
Balance at December 31	$	3,951	$	4,224	$	4,191

Components of Net Deferred Income Tax Asset (Liability)

The following table presents our net deferred tax assets and net deferred tax liabilities attributable to different tax jurisdictions or different tax paying components.


DEFERRED INCOME TAXES December 31	2022		2021
Total assets	$	12,325	$	11,587
Total liabilities	(620)		(732)
Net deferred income tax asset (liability)	$	11,705	$	10,855


COMPONENTS OF THE NET DEFERRED INCOME TAX ASSET (LIABILITY) December 31	2022		2021
Deferred tax assets
Accrued expenses and reserves	$	2,538	$	2,635
Progress collections, contract assets and deferred items	2,520		2,093
Deferred expenses	1,925		1,597
Principal pension plans	1,806		2,375
Insurance company loss reserves	1,782		1,700
Non-U.S. loss carryforwards(a)	1,240		1,354
Other compensation and benefits	975		1,397
Investment securities	516		(1,278)
Principal retiree benefit plans	692		896
Other(b)	703		1,329
Total deferred tax assets	$	14,697	$	14,098
Deferred tax liabilities
Investment in global operations	$	(1,011)	$	(1,775)
Other	(1,981)		(1,468)
Total deferred tax liabilities	(2,992)		(3,243)
Net deferred income tax asset (liability)	$	11,705	$	10,855

(a)Net of valuation allowances of $7,171 million and $7,081 million as of December 31, 2022 and 2021, respectively. Of the net deferred tax asset as of December 31, 2022 of $1,240 million, $8 million relates to net operating loss carryforwards that expire in various years ending from December 31, 2023 through December 31, 2025; $427 million relates to net operating losses that expire in various years ending from December 31, 2026 through December 31, 2042; and $805 million relates to net operating loss carryforwards that may be carried forward indefinitely.

(b) Included valuation allowances related to assets other than non-U.S. loss carryforwards of $3,325 million and $1,653 million as of December 31, 2022 and 2021, respectively. These primarily relate to excess capital loss carryforwards.