Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Schedule of Components of Income Tax Expense (Benefit)

The following table presents the components of income tax expense (benefit) for the periods indicated:



	Years Ended December 31,
(In millions)	2019			2018			2017
Current:
Federal	$	157		$	122		$	343
State	86			148			24
Non-U.S.	357			374			380
Total current expense	600			644			747
Deferred:
Federal	(6		)	(128		)	45
State	33			(22		)	66
Non-U.S.	(157		)	14			(19		)
Total deferred expense (benefit)	(130		)	(136		)	92
Total income tax expense (benefit)	$	470		$	508		$	839

Schedule of Effective Income Tax Rate Reconciliation

The following table presents a reconciliation of the U.S. statutory income tax rate to our effective tax rate based on income before income tax expense for the periods indicated:



	Years Ended December 31,
	2019		2018		2017
U.S. federal income tax rate	21.0	%	21.0	%	35.0	%
Changes from statutory rate:
State taxes, net of federal benefit	3.4		3.1		2.0
Tax-exempt income	(1.5	)	(2.0	)	(4.3	)
Business tax credits⁽¹⁾	(5.4	)	(4.1	)	(3.7	)
Foreign tax differential	(0.1	)	(0.6	)	(7.2	)
Foreign legal entity restructuring	(4.3	)	—		—
Foreign tax credit limitations	2.2		0.2		—
Transition tax	—		—		15.2
Deferred tax revaluation	—		(1.0	)	(6.8	)
Foreign designated earnings	—		—		(0.7	)
Litigation expense	1.6		0.3		—
Other, net	0.4		(0.6	)	(1.6	)
Effective tax rate	17.3	%	16.3	%	27.9	%

⁽¹⁾ Business tax credits include low-income housing, production and investment tax credits.

Schedule of Deferred Tax Assets and Liabilities

The following table presents significant components of our gross deferred tax assets and gross deferred tax liabilities as of the dates indicated:



	December 31,
(In millions)	2019			2018
Deferred tax assets:
Other amortizable assets	$	394		$	49
Tax credit carryforwards	387			274
Lease obligations	254			—
Deferred compensation	120			134
Restructuring charges and other reserves	104			156
NOL and other carryforwards	73			104
Pension plan	66			55
Foreign currency translation	57			50
Unrealized losses on investment securities, net	—			146
Total deferred tax assets	1,455			968
Valuation allowance for deferred tax assets	(330		)	(138		)
Deferred tax assets, net of valuation allowance	$	1,125		$	830
Deferred tax liabilities:
Fixed and intangible assets	$	763		$	744
Investment basis differences	258			229
Right-of-use Assets	223			—
Unrealized gains on investment securities, net	86			—
Other	32			11
Total deferred tax liabilities	$	1,362		$	984

Summary of Valuation Allowance

The table below summarizes the deferred tax assets and related valuation allowances recognized as of December 31, 2019:



(In millions)	Deferred Tax Asset		Valuation Allowance			Expiration
Other amortizable assets	$	394	$	(243	)	__
Tax credits	387		(29		)	2029-2039
NOLs - Non-U.S.	33		(18		)	2020-2028, None
Other carryforwards	27		(27		)	None
NOLs - State	13		(13		)	2020-2039

Summary of Income Tax Contingencies

The following table presents activity related to unrecognized tax benefits as of the dates indicated:



	December 31,
(In millions)	2019			2018			2017
Beginning balance	$	108		$	94		$	71
Decrease related to agreements with tax authorities	(17		)	(40		)	(14		)
Increase related to tax positions taken during current year	13			12			26
Increase related to tax positions taken during prior years	49			44			11
Decreases related to a lapse of the applicable statute of limitations	(4		)	(2		)	—
Ending balance	$	149		$	108		$	94