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Income Taxes
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Income Taxes
Income Taxes
Income before provision for income taxes, classified by source of income, was as follows:
In millions202420232022
U.S.$3,282 $3,665 $1,846 
Outside the U.S.7,062 6,857 5,980 
Income before provision for income taxes $10,345 $10,522 $7,825 
The provision for income taxes, classified by the timing and location of payment, was as follows:
In millions202420232022
U.S. federal$1,412 $1,340 $517 
U.S. state269 263 246 
Outside the U.S.1,014 1,137 1,230 
Current tax provision2,695 2,740 1,994 
U.S. federal(76)(146)(80)
U.S. state(20)(30)(46)
Outside the U.S.(478)(511)(220)
Deferred tax (benefit) provision(574)(686)(346)
Provision for income taxes$2,121 $2,053 $1,648 
Net deferred tax (assets) liabilities consisted of:
In millionsDecember 31, 20242023
Lease right-of-use asset$3,213 $3,323 
Property and equipment1,568 1,669 
Intangible assets187 264 
Other437 285 
Total deferred tax liabilities5,405 5,541 
Lease liability(3,292)(3,384)
Intangible assets(3,495)(3,018)
Property and equipment(469)(642)
Deferred foreign tax credits(50)(82)
Employee benefit plans(168)(192)
Deferred revenue(113)(167)
Operating loss carryforwards(195)(267)
Other(170)(281)
Total deferred tax assets before valuation allowance(7,951)(8,033)
Valuation allowance917 1,150 
Net deferred tax (assets) liabilities$(1,629)$(1,342)
Balance sheet presentation:
Deferred income taxes$1,914 $1,681 
Other assets-miscellaneous(3,543)(3,023)
Net deferred tax (assets) liabilities$(1,629)$(1,342)
At December 31, 2024, the Company had net operating loss carryforwards of $819 million, of which $762 million has an indefinite carryforward. The remainder will expire at various dates from 2025 to 2041.
The statutory U.S. federal income tax rate reconciles to the effective income tax rates as follows:
202420232022
Statutory U.S. federal income tax rate21.0 %21.0 %21.0 %
State income taxes, net of related federal income tax benefit1.9 1.8 2.0 
Foreign income taxed at different rates2.4 1.9 1.1 
Tax impact of intercompany transactions(1.1)(0.7)0.2 
Global intangible low-tax income ("GILTI") 0.5 0.5 0.4 
Foreign-derived intangible income ("FDII")(3.4)(2.7)(4.2)
Nonoperating expense related to France audit settlement
— — 1.4 
Other, net(0.8)(2.3)(0.8)
Effective income tax rates20.5 %19.5 %21.1 %
Results for 2023 reflected income tax benefits primarily related to global audit progression and deferred tax adjustments. 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 a tax audit in France.
As of December 31, 2024 and 2023, the Company’s gross unrecognized tax benefits totaled $461 million and $588 million, respectively. After considering the deferred tax accounting impact, it is expected that about $425 million of the total as of December 31, 2024 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 millions20242023
Balance at January 1$588 $647 
Decreases for positions taken in prior years(133)(82)
Increases for positions taken in prior years131 28 
Increases for positions related to the current year47 41 
Settlements with taxing authorities(172)(45)
Lapsing of statutes of limitations— — 
Balance at December 31(1)
$461 $588 
(1)Of this amount, $421 million and $319 million are included in Long-term income taxes for 2024 and 2023, respectively, and $40 million and $269 million are included in Income taxes for 2024 and 2023, 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 2012 and 2016 through 2021. As of December 31, 2024, the IRS examination for tax years 2011 and 2012 are awaiting final resolution with the IRS appeals team. Examination years 2016 through 2021 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 $45 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. 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.
During 2024, 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 accrued $17 million and $25 million for interest and penalties related to tax matters at December 31, 2024 and 2023, respectively. Costs recognized for interest and penalties related to tax matters in 2024 and 2023 were immaterial and $91 million in 2022. These amounts are included in the provision for income taxes.
As of December 31, 2024, 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.