Meritor Acquisition and 2022 Financial Results
Table of Contents
Our Consolidated Balance Sheets contain the following tax related items:
In millions
Prepaid expenses and other current assets
Refundable income taxes.
Other assets
Deferred income tax assets
Long-term refundable income taxes
Other accrued expenses
Income tax payable
Other liabilities
Long-term income taxes
Deferred income tax liabilities
$
A reconciliation of unrecognized tax benefits for the years ended December 31, 2022, 2021 and 2020 was as follows:
In millions
Balance at beginning of year
Additions to tax positions due to acquisitions
Additions to current year tax positions
Additions to prior years' tax positions
Reductions to prior years' tax positions
Reductions for tax positions due to settlements with taxing authorities
Balance at end of year
December 31,
2022
2021
83
S
101
101
625
428
14
173
107
192
263
649
403
2022
December 31,
2021
2020
$
89
$
122 $
77
189
17
11
9
17
16
49
(1)
(28)
(13)
(28)
(32)
S
283 $
89
$
122
Included in the December 31, 2022, 2021 and 2020, balances are $270 million, $85 million and $114 million, respectively, related to tax positions that, if recognized, would
favorably impact the effective tax rate in future periods. We also accrued interest expense related to the unrecognized tax benefits of $18 million, $15 million and $17 million as
of December 31, 2022, 2021 and 2020, respectively. We recognize potential accrued interest and penalties related to unrecognized tax benefits in income tax expense.
Audit outcomes and the timing of audit settlements are subject to significant uncertainty. Although we believe that adequate provision has been made for such issues, there is the
possibility that the ultimate resolution of such issues could have an adverse effect on our earnings. Conversely, if these issues are resolved favorably in the future, the related
provision would be reduced, thus having a positive impact on earnings.
As a result of our global operations, we file income tax returns in various jurisdictions including U.S. federal, state and foreign jurisdictions. We are routinely subject to
examination by taxing authorities throughout the world, including Australia, Belgium, Brazil, Canada, China, France, India, Mexico, the U.K. and the U.S. With few exceptions,
our U.S. federal, major state and foreign jurisdictions are no longer subject to income tax assessments for years before 2017.
90View entire presentation