Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

Income Tax Disclosure [Abstract]

Components of Income Tax Expense

The provision for income taxes by taxing jurisdiction and by significant components consisted of the following:

($ in millions)	2021	2020	2019
Current
U.S. federal	$25	$12	$86
U.S. state and local	13	6	15
Foreign	301	320	296
Total current income tax expense	$339	$338	$397
Deferred
U.S. federal	$12	$1	($1)
U.S. state and local	3	(3)	13
Foreign	20	(45)	(17)
Total deferred income tax expense/(benefit)	$35	($47)	($5)
Total income tax expense	$374	$291	$392

Reconciliation of Statutory U.S. Corporate Federal Income Tax Rate to Effective Income Tax Rate

A reconciliation of the statutory U.S. corporate federal income tax rate to the Company’s effective tax rate follows:

	2021		2020		2019
U.S. federal income tax rate	21.0	%	21.0	%	21.0	%
Changes in rate due to:
Taxes on non-U.S. earnings	2.7		3.3		2.9
U.S. state and local taxes	0.8		0.3		1.3
U.S. tax (benefit)/cost on foreign dividends	(1.6)		0.1		(0.9)
Tax benefits from equity awards	(0.3)		(0.4)		—
Change in valuation allowance reserves	—		(1.4)		—
U.S. tax incentives	(0.6)		(0.9)		(0.7)
U.S. tax cost - Tax Cuts & Jobs Act	—		—		0.3
Uncertain tax positions	(1.4)		0.9		0.3
Other	—		(1.5)		(0.6)
Effective income tax rate	20.6	%	21.4	%	23.6	%

Net deferred income tax assets and liabilities

($ in millions)	2021	2020
Deferred income tax assets related to
Employee benefits	$386	$439
Contingent and accrued liabilities	74	118
Operating loss and other carry-forwards	278	293
Operating lease liabilities	215	209
Research and development amortization	68	—
Other	121	197
Valuation allowance	(172)	(167)
Total	$970	$1,089
Deferred income tax liabilities related to
Property	$278	$240
Intangibles	814	663
Employee benefits	75	37
Operating lease right-of-use assets	216	206
Other	36	16
Total	$1,419	$1,162
Deferred income tax liabilities – net	($449)	($73)

Summary of Operating Loss Carryforwards

($ in millions)	2021	2020	Expiration
Available net operating loss carryforwards, tax effected:
Indefinite expiration	$106	$113	NA
Definite expiration	77	80	2022-2041
Total	$183	$193
Income tax credit carryforwards	$115	$119	2022-2041

Unrecognized Tax Benefits

A reconciliation of the total amounts of unrecognized tax benefits (excluding interest and penalties) as of December 31 follows:

($ in millions)	2021	2020	2019
January 1	$175	$167	$166
Current year tax positions - additions	12	25	25
Prior year tax positions - additions	10	5	4
Prior year tax positions - reductions	(2)	(2)	(9)
Statute of limitations expirations	(19)	(8)	(6)
Settlements	(21)	(11)	(12)
Foreign currency translation	3	(1)	(1)
December 31	$158	$175	$167

Interest and penalties

($ in millions)	2021	2020	2019
Accrued interest and penalties related to unrecognized tax benefits	$17	$18	$17
(Income)/loss recognized in income tax expense related to interest and penalties	($2)	$2	$1