Meritor Acquisition and 2022 Financial Results
Table of Contents
Other Operating Expense, Net
Other operating (expense) income, net was as follows:
Years ended December 31,
In millions
Amortization of intangible assets
Russian suspension costs
Asset impairments and other charges
Loss on write-off of assets
Gain (loss) on sale of assets, net
Royalty income, net
Other, net
2022
2021
$
(70)
$
(22)
(63) (1)
(36)
(7)
1
7
|བྱེ॰
(12)
9
(6)
(4)
Other operating expense, net
$
(174) $
(31)
(1) See NOTE 23, "RUSSIAN OPERATIONS," to our Consolidated Financial Statements for additional information.
Interest Expense
Interest expense increased $88 million, primarily due to the overall increase in floating interest rates, new term loan borrowings and higher short-term borrowings, including
commercial paper.
Other Income, Net
Other income, net was as follows:
In millions
Non-service pension and OPEB income
Interest income
(Loss) gain on marketable securities, net
Foreign currency (loss) gain, net
Years ended December 31,
2022
2021
140 $
96
49
25
(7)
6
(8)
2
Loss on corporate owned life insurance
(102)
Other, net
17
27
Other income, net
$
89
$
156
(1) Includes $35 million in gains from unwinding derivative instruments not designated as hedges as a result of foreign dividends paid.
Income Tax Expense
Our effective tax rate for 2022 was 22.6 percent compared to 21.3 percent for 2021.
The year ended December 31, 2022, contained discrete tax items that netted to zero, primarily due to $31 million of favorable changes in accrued withholding taxes,
$29 million of favorable changes in tax reserves, $15 million of favorable valuation allowance adjustments and $9 million of favorable other net discrete items, offset by $69
million of unfavorable tax costs associated with internal restructuring ahead of the planned separation of our filtration business and $15 million of unfavorable return to
provision adjustments related to the 2021 filed tax returns.
The year ended December 31, 2021, contained $9 million of unfavorable net discrete tax items, primarily due to $12 million of unfavorable provision to return adjustments
related to the 2020 filed tax returns, partially offset by $3 million of favorable other discrete tax items.
The change in effective tax rate for the year ended December 31, 2022, versus year ended December 31, 2021, was primarily due to the jurisdictional mix of pre-tax income.
Our effective tax rate for 2023 is expected to approximate 22.0 percent, excluding any discrete tax items that may arise.
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