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Income Taxes | 12 Months Ended
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Dec. 31, 2023
Income Tax Disclosure [Abstract] |
Income Taxes |
Income Taxes
Income before provision for income taxes, classified by source of income, was as follows:
In millions | 2023 |  | 2022 |  | 2021
U.S. | $ | 3,665.0 |  |  | $ | 1,845.6 |  |  | $ | 2,413.9 |
Outside the U.S. | 6,857.2 |  |  | 5,979.8 |  |  | 6,714.0 |
Income before provision for income taxes * | $ | 10,522.2 |  |  | $ | 7,825.4 |  |  | $ | 9,127.9 |
*Income before provision for income taxes increased in 2023 primarily due to strong operating performance and prior year net charges detailed in the Net Income and Diluted Earnings Per Share section on page 13 of this Form 10-K. The provision for income taxes, classified by the timing and location of payment, was as follows:
In millions | 2023 |  | 2022 |  | 2021
U.S. federal | $ | 1,340.0 |  |  | $ | 517.3 |  |  | $ | 887.6 |
U.S. state | 262.7 |  |  | 246.3 |  |  | 228.1 |
Outside the U.S. | 1,137.1 |  |  | 1,230.1 |  |  | 895.3 |
Current tax provision | 2,739.8 |  |  | 1,993.7 |  |  | 2,011.0 |
U.S. federal | (146.0) |  |  | (80.0) |  |  | (177.4) |
U.S. state | (29.6) |  |  | (46.2) |  |  | (24.1) |
Outside the U.S. | (510.8) |  |  | (219.5) |  |  | (226.8) |
Deferred tax provision | (686.4) |  |  | (345.7) |  |  | (428.3) |
Provision for income taxes | $ | 2,053.4 |  |  | $ | 1,648.0 |  |  | $ | 1,582.7 |
Net deferred tax (assets) liabilities consisted of:
In millions | December 31, 2023 |  | 2022
Lease right-of-use asset |  |  | $ | 3,322.5 |  |  | $ | 3,045.0 |
Property and equipment |  |  | 1,668.5 |  |  | 1,706.3 |
Intangible assets |  |  | 264.0 |  |  | 296.7 |
Other |  |  | 284.8 |  |  | 595.4 |
Total deferred tax liabilities |  |  | 5,539.8 |  |  | 5,643.4 |
Lease liability |  |  | (3,384.0) |  |  | (3,099.9) |
Intangible assets |  |  | (3,018.2) |  |  | (2,658.9) |
Property and equipment |  |  | (641.8) |  |  | (676.3) |
Deferred foreign tax credits |  |  | (81.6) |  |  | (74.5) |
Employee benefit plans |  |  | (191.6) |  |  | (180.6) |
Deferred revenue |  |  | (166.9) |  |  | (165.8) |
Operating loss carryforwards |  |  | (266.5) |  |  | (76.6) |
Other |  |  | (281.0) |  |  | (267.4) |
Total deferred tax assets before valuation allowance |  |  | (8,031.6) |  |  | (7,200.0) |
Valuation allowance |  |  | 1,149.8 |  |  | 1,077.1 |
Net deferred tax (assets) liabilities |  |  | $ | (1,342.0) |  |  | $ | (479.5) |
Balance sheet presentation: |  |  |  |  |
Deferred income taxes |  |  | $ | 1,680.9 |  |  | $ | 1,997.5 |
Other assets-miscellaneous |  |  | (3,022.9) |  |  | (2,477.0) |
Net deferred tax (assets) liabilities |  |  | $ | (1,342.0) |  |  | $ | (479.5) |
At December 31, 2023, the Company had net operating loss carryforwards of $1,112.8 million, of which $924.8 million has an indefinite carryforward. The remainder will expire at various dates from 2024 to 2040. The statutory U.S. federal income tax rate reconciles to the effective income tax rates as follows:
| 2023 |  | 2022 |  | 2021
Statutory U.S. federal income tax rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State income taxes, net of related federal income tax benefit | 1.8 |  |  | 2.0 |  |  | 1.8 |
Foreign income taxed at different rates | 1.9 |  |  | 1.1 |  |  | 0.9 |
Tax impact of intercompany transactions | (0.7) |  |  | 0.2 |  |  | 0.1 |
Global intangible low-tax income ("GILTI") | 0.5 |  |  | 0.4 |  |  | 0.3 |
Foreign-derived intangible income ("FDII") | (2.7) |  |  | (4.2) |  |  | (2.6) |
U.S./Foreign tax law changes | — |  |  | — |  |  | (3.9) |
Nonoperating expense related to France audit settlement | — |  |  | 1.4 |  |  | — |
Other, net | (2.3) |  |  | (0.8) |  |  | (0.3) |
Effective income tax rates | 19.5 | % |  | 21.1 | % |  | 17.3 | %
Results for 2022 reflected $239 million of net tax benefits related to the sale of the Company’s Russia and Dynamic Yield businesses and the unfavorable impact of the non-deductible $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, 2023 and 2022, the Company’s gross unrecognized tax benefits totaled $587.7 million and $647.0 million, respectively. After considering the deferred tax accounting impact, it is expected that about $588 million of the total as of December 31, 2023 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 | 2023 |  | 2022
Balance at January 1 | $ | 647.0 |  |  | $ | 1,504.9 |
Decreases for positions taken in prior years | (82.1) |  |  | (579.4) |
Increases for positions taken in prior years | 27.5 |  |  | 49.8 |
Increases for positions related to the current year | 40.5 |  |  | 100.3 |
Settlements with taxing authorities | (45.2) |  |  | (428.1) |
Lapsing of statutes of limitations | — |  |  | (0.5) |
Balance at December 31(1) | $ | 587.7 |  |  | $ | 647.0 |
(1)Of this amount, $318.5 million and $619.6 million are included in Long-term income taxes for 2023 and 2022, respectively, and $269.2 million and $27.3 million are included in Income taxes for 2023 and 2022, respectively, on the Consolidated Balance Sheet. The Company is currently under audit with the U.S. Internal Revenue Service (the "IRS") for tax years 2011 through 2018. 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 and 2010. All results of this settlement have been reported in the Company's financial statements. As of December 31, 2023, the IRS examination for tax years 2011 and 2012 are awaiting final resolution with the IRS appeals team. The Company has reflected anticipated settlement results in the financial statements. In 2023, the IRS issued a Revenue Agent's Report for the 2013 through 2015 examination period, and the Company's results reflect expected resolution. Examination years 2016 through 2018 remain open as of the end of the period. The Company is also under audit in multiple foreign tax jurisdictions, primarily related to transfer pricing, as well as 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 $262 million within the next 12 months. This would be due to the possible resolution of the aforementioned U.S. Federal, foreign and U.S. state tax audits and the expiration of the statute of limitations in multiple tax jurisdictions. During 2023, 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 accrued $24.9 million and $24.7 million for interest and penalties related to tax matters at December 31, 2023 and 2022, respectively. Costs recognized for interest and penalties related to tax matters in 2023 were immaterial and were $90.5 million and $24.4 million in 2022 and 2021, respectively. These amounts are included in the provision for income taxes. As of December 31, 2023, 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.

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