Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Income Taxes.

Income Before Income Taxes

Income Before Income Taxes

(Millions)	2020		2019		2018
United States	$	3,720	$	3,008	$	3,487
International		2,991		2,704		3,513
Total	$	6,711	$	5,712	$	7,000

Provision for Income Taxes

Provision for Income Taxes

(Millions)	2020		2019		2018
Currently payable
Federal	$	720	$	534	$	698
State		123		59		109
International		633		673		763
Tax Cuts and Jobs Act (TCJA) non-current transition tax provision		—		—		176
Deferred
Federal		(59)		(32)		(38)
State		(20)		(26)		(17)
International		(79)		(78)		(54)
Total	$	1,318	$	1,130	$	1,637

Components of Deferred Tax Assets and Liabilities

Components of Deferred Tax Assets and Liabilities

(Millions)	2020		2019
Deferred tax assets:
Accruals not currently deductible
Employee benefit costs	$	232	$	169
Product and other claims		338		280
Miscellaneous accruals		153		119
Pension costs		849		824
Stock-based compensation		231		218
Net operating/capital loss/tax credit carryforwards		148		150
Foreign tax credits		100		66
Currency translation		90		—
Inventory		54		70
Other		112		113
Gross deferred tax assets		2,307		2,009
Valuation allowance		(135)		(158)
Total deferred tax assets	$	2,172	$	1,851
Deferred tax liabilities:
Product and other insurance receivables	$	(4)	$	—
Accelerated depreciation		(607)		(580)
Intangible amortization		(1,023)		(1,021)
Currency translation		—		(30)
Other		—		—
Total deferred tax liabilities	$	(1,634)	$	(1,631)
Net deferred tax assets	$	538	$	220

Reconciliation of Effective Income Tax Rate

Reconciliation of Effective Income Tax Rate

	2020		2019		2018
Statutory U.S. tax rate	21.0	%	21.0	%	21.0	%
State income taxes - net of federal benefit	1.2		0.5		1.0
International income taxes - net	(1.2)		0.2		0.2
Global Intangible Low Taxed Income (GILTI)	0.8		1.8		1.1
Foreign Derived Intangible Income (FDII)	(1.8)		(2.9)		(1.3)
U.S. TCJA enactment - net impacts	—		—		2.5
U.S. research and development credit	(1.0)		(1.7)		(1.5)
Reserves for tax contingencies	0.5		2.3		1.2
Employee share-based payments	(0.5)		(1.3)		(1.4)
All other - net	0.6		(0.1)		0.6
Effective worldwide tax rate	19.6	%	19.8	%	23.4	%

Reconciliation of Federal, State and Foreign Tax Gross Unrecognized Tax Benefits

Federal, State and Foreign Tax

(Millions)	2020		2019		2018
Gross UTB Balance at January 1	$	1,167	$	647	$	530
Additions based on tax positions related to the current year		74		76		129
Additions for tax positions of prior years		106		132		146
Additions related to recent acquisitions		—		396		—
Reductions for tax positions of prior years		(173)		(56)		(123)
Settlements		(8)		(4)		(17)
Reductions due to lapse of applicable statute of limitations		(53)		(24)		(18)
Gross UTB Balance at December 31	$	1,113	$	1,167	$	647
Net UTB that would impact the effective tax rate at December 31	$	1,145	$	1,178	$	655