XML 50 R19.htm IDEA: XBRL DOCUMENT
v3.22.4

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Income Taxes |
Income Taxes
Income before provision for income taxes, classified by source of income, was as follows:
In millions | 2022 |  | 2021 |  | 2020
U.S. | $ | 1,845.6 |  |  | $ | 2,413.9 |  |  | $ | 1,390.4 |
Outside the U.S. | 5,979.8 |  |  | 6,714.0 |  |  | 4,750.3 |
Income before provision for income taxes * | $ | 7,825.4 |  |  | $ | 9,127.9 |  |  | $ | 6,140.7 |
*Income before provision for income taxes decreased in 2022 primarily due to current and prior year charges and gains detailed in the Net Income and Diluted Earnings Per Share section on page 12 of this Form 10-K, which offset strong operating performance. The provision for income taxes, classified by the timing and location of payment, was as follows:
In millions | 2022 |  | 2021 |  | 2020
U.S. federal | $ | 517.3 |  |  | $ | 887.6 |  |  | $ | 554.1 |
U.S. state | 246.3 |  |  | 228.1 |  |  | 119.1 |
Outside the U.S. | 1,230.1 |  |  | 895.3 |  |  | 730.6 |
Current tax provision | 1,993.7 |  |  | 2,011.0 |  |  | 1,403.8 |
U.S. federal | (80.0) |  |  | (177.4) |  |  | 870.3 |
U.S. state | (46.2) |  |  | (24.1) |  |  | 73.3 |
Outside the U.S. | (219.5) |  |  | (226.8) |  |  | (937.2) |
Deferred tax provision | (345.7) |  |  | (428.3) |  |  | 6.4 |
Provision for income taxes | $ | 1,648.0 |  |  | $ | 1,582.7 |  |  | $ | 1,410.2 |
Net deferred tax (assets) liabilities consisted of:
In millions | December 31, 2022 |  | 2021
Lease right-of-use asset |  |  | $ | 3,045.0 |  |  | $ | 3,462.7 |
Property and equipment |  |  | 1,706.3 |  |  | 1,648.6 |
Intangible assets |  |  | 296.7 |  |  | 696.0 |
Other |  |  | 595.4 |  |  | 490.8 |
Total deferred tax liabilities |  |  | 5,643.4 |  |  | 6,298.1 |
Lease liability |  |  | (3,099.9) |  |  | (3,516.9) |
Intangible assets |  |  | (2,658.9) |  |  | (2,524.6) |
Property and equipment |  |  | (676.3) |  |  | (647.1) |
Deferred foreign tax credits |  |  | (74.5) |  |  | (311.5) |
Employee benefit plans |  |  | (180.6) |  |  | (153.6) |
Deferred revenue |  |  | (165.8) |  |  | (121.4) |
Operating loss carryforwards |  |  | (76.6) |  |  | (96.1) |
Other |  |  | (267.4) |  |  | (284.4) |
Total deferred tax assets before valuation allowance |  |  | (7,200.0) |  |  | (7,655.6) |
Valuation allowance |  |  | 1,077.1 |  |  | 1,076.1 |
Net deferred tax (assets) liabilities |  |  | $ | (479.5) |  |  | $ | (281.4) |
Balance sheet presentation: |  |  |  |  |
Deferred income taxes |  |  | $ | 1,997.5 |  |  | $ | 2,075.6 |
Other assets-miscellaneous |  |  | (2,477.0) |  |  | (2,357.0) |
Net deferred tax (assets) liabilities |  |  | $ | (479.5) |  |  | $ | (281.4) |
At December 31, 2022, the Company had net operating loss carryforwards of $407.5 million, of which $174.6 million has an indefinite carryforward. The remainder will expire at various dates from 2023 to 2040. The statutory U.S. federal income tax rate reconciles to the effective income tax rates as follows:
| 2022 |  | 2021 |  | 2020
Statutory U.S. federal income tax rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State income taxes, net of related federal income tax benefit | 2.0 |  |  | 1.8 |  |  | 1.8 |
Foreign income taxed at different rates | 1.1 |  |  | 0.9 |  |  | 0.4 |
Tax impact of intercompany transactions | 0.2 |  |  | 0.1 |  |  | 2.1 |
Global intangible low-tax income ("GILTI") | 0.4 |  |  | 0.3 |  |  | 1.2 |
Foreign-derived intangible income ("FDII") | (4.2) |  |  | (2.6) |  |  | (3.4) |
U.S./Foreign tax law changes | — |  |  | (3.9) |  |  | (1.8) |
Nonoperating expense related to France audit settlement | 1.4 |  |  | — |  |  | — |
Other, net | (0.8) |  |  | (0.3) |  |  | 1.7 |
Effective income tax rates | 21.1 | % |  | 17.3 | % |  | 23.0 | %
The 2022 effective income tax rate reflected the tax impact of $537 million of non-operating expense related to the settlement of the tax audit in France. In 2021, U.S./Foreign tax law changes included a $364 million income tax benefit related to the remeasurement of deferred taxes as a result of a change in the U.K. statutory income tax rate. As of December 31, 2022 and 2021, the Company’s gross unrecognized tax benefits totaled $647.0 million and $1,504.9 million, respectively. After considering the deferred tax accounting impact, it is expected that about $410 million of the total as of December 31, 2022 would favorably affect the effective tax rate if resolved in the Company’s favor. The following table presents a reconciliation of the beginning and ending amounts of unrecognized tax benefits:
In millions | 2022 |  | 2021
Balance at January 1 | $ | 1,504.9 |  |  | $ | 1,479.2 |
Decreases for positions taken in prior years | (579.4) |  |  | (31.9) |
Increases for positions taken in prior years | 49.8 |  |  | 26.1 |
Increases for positions related to the current year | 100.3 |  |  | 60.7 |
Settlements with taxing authorities | (428.1) |  |  | (16.8) |
Lapsing of statutes of limitations | (0.5) |  |  | (12.4) |
Balance at December 31(1) | $ | 647.0 |  |  | $ | 1,504.9 |
(1)Of this amount, $619.6 million and $1,157.5 million are included in Long-term income taxes for 2022 and 2021, respectively, and $27.3 million and $332.0 million are included in Prepaid expenses and other current assets for 2022 and 2021, respectively, on the Consolidated Balance Sheet. The remainder is included in Deferred income taxes on the Consolidated Balance Sheet. In 2015, the U.S. Internal Revenue Service (the "IRS") issued a Revenue Agent Report (“RAR”) that included certain disagreed transfer pricing adjustments related to the Company’s U.S. Federal income tax returns for 2009 and 2010. Also in 2015, the Company filed a protest with the IRS related to these disagreed transfer pricing matters. During 2017, the Company received a response to its protest, and beginning in December 2018 the Company met with the IRS Appeals team regarding settlement of these issues. In February 2023, the Company finalized a settlement agreement with the IRS Appeals team related to the disagreed transfer pricing matters for the years 2009-2010. In 2017, the IRS completed its examination of the Company’s U.S. Federal income tax returns for 2011 and 2012. In 2018, the IRS issued a RAR for these years. As expected, the RAR included the same disagreed transfer pricing matters as the 2009 and 2010 RAR. Also in 2018, the Company filed a protest with the IRS related to these disagreed transfer pricing matters. The Company continues to meet with the IRS Appeals team regarding the settlement of these issues. The Company is also under audit in multiple foreign tax jurisdictions for matters primarily related to transfer pricing, and the Company is under audit in multiple state tax jurisdictions. While the Company cannot estimate the impact to the effective tax rate, it is reasonably possible that the total amount of unrecognized tax benefits could decrease up to $70 million within the next 12 months. This would be due to the possible settlement of the IRS transfer pricing matters, completion of the aforementioned foreign and state tax audits and the expiration of the statute of limitations in multiple tax jurisdictions. In 2022, the Company settled an income tax audit with France, which resulted in $537 million of nondeductible non-operating expense and conclusion of income tax matters related to transfer pricing for the years 2009-2020. During 2022, the Company finalized and settled certain tax examinations and remeasured other income tax reserves based on audit progression. It is reasonably possible that, as a result of audit progression in both the U.S. and foreign tax audits within the next 12 months, there may be new information that causes the Company to reassess the total amount of unrecognized tax benefits recorded. While the Company cannot estimate the impact that new information may have on the unrecognized tax benefit balance, it believes that the liabilities recorded are appropriate and adequate. The Company operates within multiple tax jurisdictions and is subject to audit in these jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations for years before 2009. The Company had $24.7 million and $183.6 million accrued for interest and penalties related to tax matters at December 31, 2022 and 2021, respectively. The Company recognized interest and penalties related to tax matters of $90.5 million in 2022, $24.4 million in 2021, and $32.4 million in 2020, which are included in the provision for income taxes. As of December 31, 2022, the Company has accumulated undistributed earnings generated by its foreign subsidiaries, which were predominantly taxed in the U.S. as a result of the transition tax provisions enacted under the Tax Cuts and Jobs Act of 2017. Management does not assert that these previously-taxed unremitted earnings are indefinitely reinvested in operations outside the U.S. Accordingly, the Company has provided deferred taxes for the tax effects incremental to the transition tax. The Company has not provided for deferred taxes on outside basis differences in its investments in its foreign subsidiaries that are unrelated to these accumulated undistributed earnings, as these outside basis differences are indefinitely reinvested. A determination of the unrecognized deferred taxes related to these other components of the outside basis differences is not practicable.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration