INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2022

Income Tax Disclosure [Abstract]

Schedule of Income Tax Expense (Benefit)

Earnings before income taxes and the provision for income taxes are presented in the following table.

	Year Ended December 31,
(in millions)	2022		2021		2020
Earnings (loss) before income taxes:
U.S.1	$	51	$	(423)	$	437
Non-U.S.1	1,267		1,212		527
Total	$	1,318	$	789	$	964
Provision for income taxes:
Current:
Federal	$	75	$	43	$	19
State	7		7		2
Foreign	276		276		252
Total current expense	358		326		273
Deferred:
Federal	(58)		(98)		70
State	(9)		(13)		11
Foreign	1		(65)		43
Total deferred (benefit) expense	(66)		(176)		124
Total provision for income taxes	$	292	$	150	$	397

__________________________

1 In 2021, the U.S. loss before income taxes was primarily related to the $362 million unrealized loss related to the Company’s investment in Romeo Power, Inc. In 2020, the Company recognized a $382 million unrealized gain related to its investment in Romeo Power, Inc.

Schedule of Effective Income Tax Rate Reconciliation

The following table provides a reconciliation of tax expense based on the U.S. statutory tax rate to final tax expense.

	Year Ended December 31,
(in millions)	2022		2021		2020
Income taxes at U.S. statutory rate of 21%	$	277	$	166	$	203
Increases (decreases) resulting from:
Valuation allowance adjustments, net	67		39		53
Net tax on remittance of foreign earnings	36		43		93
Foreign rate differentials	25		36		21
Reserve adjustments, settlements and claims	16		(17)		45
Impact of tax law and rate change	2		(20)		—
State taxes, net of federal benefit	(4)		(9)		10
Affiliates' earnings	(6)		(10)		(4)
U.S. tax on non-U.S. earnings	(11)		4		10
Changes in accounting methods and filing positions	(14)		(18)		(18)
Tax credits	(16)		(5)		(12)
Enhanced research and development deductions	(42)		(27)		(9)
Tax holidays	(43)		(76)		(36)
Other, net	5		44		41
Provision for income taxes, as reported	$	292	$	150	$	397

Schedule of Reconciliation of Total Gross Unrecognized Tax Benefits

A roll forward of the Company’s total gross unrecognized tax benefits is presented below:

(in millions)	2022		2021		2020
Balance, January 1	$	221	$	231	$	146
Additions based on tax positions related to current year	20		23		14
Acquisitions	—		8		54
(Reductions) additions for tax positions of prior years	(8)		—		9
Reductions for lapse in statute of limitations	(14)		(36)		(5)
Reductions for closure of tax audits and settlements	(21)		—		—
Translation adjustment	(14)		(5)		13
Balance, December 31	$	184	$	221	$	231

Schedule of Tax Jurisdiction

The Company is no longer subject to income tax examinations by tax authorities in its major tax jurisdictions as follows:

Tax jurisdiction	Years no longer subject to audit	Tax jurisdiction	Years no longer subject to audit
U.S. Federal	2015 and prior	Japan	2018 and prior
Barbados	2016 and prior	Luxembourg	2016 and prior
China	2015 and prior	Mexico	2015 and prior
France	2015 and prior	Poland	2016 and prior
Germany	2011 and prior	South Korea	2015 and prior
Hungary	2015 and prior	United Kingdom	2015 and prior

Schedule of Deferred Tax Assets (Liabilities)

The components of deferred tax assets and liabilities consist of the following:

	December 31,
(in millions)	2022		2021
Deferred tax assets:
Net operating loss and capital loss carryforwards	$	607	$	634
Interest limitation carryforwards	156		123
Research and development capitalization	146		91
Pension and other postretirement benefits	45		41
Employee compensation	46		44
Warranty	31		31
State tax credits	29		28
Unrecognized tax benefits	24		32
Unrealized loss on equity securities	8		—
Foreign tax credits	7		8
Other comprehensive loss	—		39
Other	167		167
Total deferred tax assets	$	1,266	$	1,238
Valuation allowance	(591)		(551)
Net deferred tax asset	$	675	$	687
Deferred tax liabilities:
Goodwill and intangible assets	(267)		(274)
Unremitted foreign earnings	(141)		(146)
Fixed assets	(121)		(126)
Other comprehensive income	(14)		—
Unrealized gain on equity securities	—		(5)
Other	(87)		(88)
Total deferred tax liabilities	$	(630)	$	(639)
Net deferred taxes	$	45	$	48