Income Taxes (Tables)

12 Months Ended

Dec. 31, 2024

Schedule of Components of Income Before Provision for Income Taxes

The components of income before provision for income taxes are as follows:


(In millions)	2024		2023		2022
U.S.	$	2,226	$	2,431	$	3,859
Non-U.S.	4,812		3,867		3,976
Income before income taxes	$	7,037	$	6,298	$	7,835

Schedule of Components of the Provision for Income Taxes

The components of the provision for income taxes are as follows:


(In millions)	2024		2023		2022
Current income tax provision
Federal	$	561	$	228	$	813
Non-U.S.	1,175		1,206		633
State	130		150		254
	1,866		1,584		1,700
Deferred income tax provision/(benefit)
Federal	$	(1,026)	$	(551)	$	(611)
Non-U.S.	(72)		(647)		(314)
State	(111)		(102)		(72)
	(1,209)		(1,300)		(997)
Provision for/(benefit from) income taxes	$	657	$	284	$	703

Schedule of Effective Income Tax Rate Reconciliation

The provision for income taxes in the accompanying statement of income differs from the provision calculated by applying the statutory federal income tax rate to income before income taxes due to the following:


(In millions)	2024			2023			2022
Statutory federal income tax rate	21		%	21		%	21		%
Provision for income taxes at statutory rate	$	1,478		$	1,323		$	1,645
Increases (decreases) resulting from:
Foreign rate differential	(131)			(223)			(329)
Income tax credits	(333)			(276)			(202)
Global intangible low-taxed income	57			113			96
Foreign-derived intangible income	(133)			(108)			(149)
Excess tax benefits from stock options and restricted stock units	(67)			(69)			(80)
Provision for (reversal of) tax reserves, net	218			13			(544)
Intra-entity transfers	(106)			(233)			(18)
Foreign exchange loss on inter-company debt refinancing	—			(112)			—

Provision for (reversal of) valuation allowances, net	(229)			(32)			344

Withholding taxes	74			33			84



Tax return reassessments and settlements	(192)			(187)			(210)
State income taxes, net of federal tax	66			70			111

Other, net	(45)			(28)			(45)
Provision for/(benefit from) income taxes	$	657		$	284		$	703

Schedule of Deferred Tax Asset (Liability) and Changes in Valuation Allowance

Net deferred tax asset/(liability) in the accompanying balance sheet consists of the following:


(In millions)	2024		2023
Deferred tax asset/(liability)
Depreciation and amortization	$	(4,133)	$	(4,286)
Net operating loss and credit carryforwards	2,915		2,385
Reserves and accruals	161		157
Accrued compensation	318		299
Inventory basis difference	309		275
Deferred interest	534		753
Research and development and other capitalized costs	536		380
Unrealized (gains) losses on hedging instruments	(363)		(66)
Contract liabilities	280		130
Other, net	147		199
Deferred tax assets/(liabilities), net before valuation allowance	705		226
Less: Valuation allowance	1,043		1,317
Deferred tax assets/(liabilities), net	$	(338)	$	(1,091)

The company estimates the degree to which tax assets, losses and credit carryforwards will result in a benefit based on expected profitability by tax jurisdiction and provides a valuation allowance for tax assets and loss and credit carryforwards that it believes will more likely than not expire unutilized. At December 31, 2024, all of the company’s valuation allowance relates to deferred tax assets, primarily net operating losses and disallowed interest expense carryforward, for which any subsequently recognized tax benefits will reduce income tax expense.

The changes in the valuation allowance are as follows:


	Year Ended December 31,
(In millions)	2024		2023		2022
Beginning balance	$	1,317	$	1,322	$	968
Additions/(reductions) recognized in income tax provision, net	(229)		(32)		344
Additions due to acquisitions	—		4		14


Currency translation and other	(46)		23		(4)
Ending balance	$	1,043	$	1,317	$	1,322

Schedule of Reconciliation of Unrecognized Tax Benefits

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


(In millions)	2024		2023		2022
Beginning balance	$	540	$	572	$	1,124
Additions due to acquisitions	19		—		15

Additions for tax positions of current year	91		4		104
Additions for tax positions of prior years	244		34		24
Reductions for tax positions of prior years	(182)		(43)		(659)
Closure of tax years	—		(6)		(4)
Settlements	(187)		(21)		(32)
Ending balance	$	525	$	540	$	572