Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Tax rate

The reconciliation of income taxes at the federal statutory rate to the actual benefit for income taxes is as follows:

	Year Ended December 31,
	2019		2018		2017
					(reclassified)(1)
U.S. federal statutory income tax rate	21.0	%	21.0	%	35.0	%
State income taxes, net of federal benefit	6.7	%	0.4	%	(1.0	)%
Domestic taxes on foreign earnings	21.9	%	0.5	%	0.4	%
Effect of foreign taxes	(47.6	)%	(8.3	)%	(38.9	)%
Acquisition-related	12.2	%	2.1	%	(1.7	)%
Research credit	(4.2	)%	(2.6	)%	(2.6	)%
Valuation allowance	1.1	%	(5.2	)%	(4.1	)%
Compensation-related	(0.3	)%	(1.0	)%	(2.5	)%
Non-deductible expenses	3.3	%	0.3	%	2.2	%
Uncertain tax positions	1.4	%	(22.0	)%	10.7	%
TCJA net impact	—	%	(4.7	)%	91.4	%
Intra-entity intangible asset transfers	(597.0	)%	—	%	—	%
Other, net	(2.5	)%	1.8	%	(0.2	)%
	(584.0	)%	(17.5	)%	88.8	%

(1)

Due to the inclusion of new tax provisions in 2018 created by the TJCA, we have reclassified select items in prior years to align with the new categories established in 2018, domestic taxes on foreign earnings and uncertain tax positions.

Summary of Income Tax Contingencies [Table Text Block]

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

	Year Ended December 31,
(in millions)	2019			2018			2017
Beginning Balance	$	427		$	1,238		$	1,095
Additions based on positions related to the current year	30			79			134
Additions based on positions related to prior years	45			4			16
Reductions for tax positions of prior years	(34		)	(433		)	(3		)
Settlements with taxing authorities	(4		)	(459		)	(2		)
Statute of limitation expirations	(9		)	(3		)	(2		)
Ending Balance	$	455		$	427		$	1,238

Schedule of Income before Income Tax, Domestic and Foreign [Table Text Block]

Our Income (loss) before income taxes consisted of the following:

	Year Ended December 31,
(in millions)	2019			2018		2017
Domestic	$	(1,145	)	$	35	$	(408	)
Foreign	1,832			1,387		1,341
	$	687		$	1,422	$	933

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

Our deferred tax assets, deferred tax liabilities and prepaid on intercompany profit, are included in the following locations within our accompanying consolidated balance sheets (in millions):

	Location on Consolidated Balance Sheets	As of December 31,
Component		2019		2018
Prepaid on intercompany profit	Prepaid income taxes	$	195	$	161
Non-current deferred tax asset	Deferred tax assets	4,196		87
Deferred Tax Assets and Prepaid on Intercompany Profit		4,391		249
Non-current deferred tax liability	Deferred income taxes	595		328
Deferred Tax Liabilities		595		328
Net Deferred Tax Assets (Liabilities) and Prepaid on Intercompany Profit		$	3,796	$	(80	)

Significant components of our deferred tax assets and liabilities are as follows:

	As of December 31,
(in millions)	2019			2018
Deferred Tax Assets:
Inventory costs and related reserves	$	—		$	18
Tax benefit of net operating loss and credits	545			450
Reserves and accruals	258			258
Restructuring-related charges	20			12
Litigation and product liability reserves	168			221
Investment write-down	42			28
Compensation related	121			106
Federal benefit of uncertain tax positions	10			10
Intangible assets	3,447			—
Other	—			37
	4,611			1,140
Less: valuation allowance	(915		)	(344		)
	3,696			796
Deferred Tax Liabilities:
Property, plant and equipment	16			25
Unrealized gains and losses on derivative financial instruments	52			44
Intangible assets	—			968
Inventory costs and related services	2			—
Other	25			—
	95			1,037
Net Deferred Tax Assets / (Liabilities)	3,601			(241		)
Prepaid on intercompany profit	195			161
Net Deferred Tax Assets / (Liabilities) and Prepaid on Intercompany Profit	$	3,796		$	(80	)

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

The related benefit for income taxes consisted of the following:

	Year Ended December 31,
(in millions)	2019			2018			2017
Current
Federal	$	120		$	(221	)	$	320
State	54			(27		)	9
Foreign	101			160			255
	275			(87		)	584
Deferred
Federal	(146		)	(124		)	272
State	(18		)	4			1
Foreign	(4,124		)	(42		)	(28		)
	(4,288		)	(162		)	244
	$	(4,013	)	$	(249	)	$	828