Net operating losses and tax credits, remaining to expire over next 10 years

                                             The principal items that gave rise to deferred income tax assets and liabilities follow:

|  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |
|  | 2020  |  |  | 2021  |  |
| Deferred tax assets: |  |  |  |
|    Net operating losses, capital losses and tax credits | $ | 487  |  |  | 316  |  |
|    Accrued liabilities | 219  |  |  | 216  |  |
|    Postretirement and postemployment benefits | 33  |  |  | 29  |  |
|    Employee compensation and benefits | 119  |  |  | 149  |  |
|    Pensions | 69  |  |  | —  |  |
|    Other | 137  |  |  | 128  |  |
|         Total | $ | 1,064  |  |  | 838  |  |
|  |  |  |  |
| Valuation allowances | $ | (293) |  |  | (236) |  |
|  |  |  |  |
| Deferred tax liabilities: |  |  |  |
|    Intangibles | $ | (652) |  |  | (787) |  |
|    Pensions | —  |  |  | (107) |  |
|    Property, plant and equipment | (212) |  |  | (212) |  |
|    Undistributed non-U.S. earnings | (36) |  |  | (38) |  |
|    Other | (33) |  |  | (54) |  |
|         Total | $ | (933) |  |  | (1,198) |  |
|  |  |  |  |
|              Net deferred income tax liability | $ | (162) |  |  | (596) |  |

  
Total income taxes paid were approximately $680, $400 and $650 in 2021, 2020 and 2019, respectively. Approximately half of the $316 of net operating losses and tax credits expire over the next 10 years, while most of the remainder can be carried forward indefinitely.  
(15) STOCK-BASED COMPENSATION  
The Company's stock-based compensation plans include performance shares, restricted stock, restricted stock units, and stock options. Although the Company has discretion, shares distributed under these plans are issued from treasury stock.   
Total compensation expense and income tax benefits for stock options and incentive shares follows. The Company's performance shares awards are marked-to-market each period based on changes in the stock price.  


|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | 2019  |  |  | 2020  |  |  | 2021 |
| Performance shares | $ | 96  |  |  | 98  |  |  | 203  |  |
| Restricted stock and restricted stock units | 21  |  |  | 11  |  |  | 21  |  |
| Stock options | 3  |  |  | 1  |  |  | —  |  |
|      Total stock compensation expense | $ | 120  |  |  | 110  |  |  | 224  |  |
|  |  |  |  |  |  |
| Income tax benefits recognized | $ | 20  |  |  | 18  |  |  | 27  |  |

  
As of September 30, 2021, total unrecognized compensation expense related to unvested shares awarded under these plans was $164, which is expected to be recognized over a weighted-average period of 1.8 years.  
Performance Shares, Restricted Stock and Restricted Stock Units The Company's incentive shares plans include performance shares awards which distribute the value of common stock to key management employees at the conclusion of a three-year period subject to certain operating performance conditions and other terms and restrictions. The form of distribution is primarily shares of common stock, with a portion in cash in the first quarter following the end of the applicable three-year performance period. 52  

