XML 31 R12.htm IDEA: XBRL DOCUMENT
v3.8.0.1

Taxes on Income | 12 Months Ended
--- | ---
Dec. 31, 2017
Income Tax Disclosure [Abstract] |
Taxes on Income | Taxes on Income Comprehensive tax legislation enacted through the Tax Cuts and Jobs Act (“TCJA”) on December 22, 2017, significantly modified U.S. corporate income tax law. Provisional amounts have been recorded in our financial statements based on the Company’s initial analysis of the TCJA. The Company may adjust these amounts in future periods if our interpretation of the TCJA changes or as additional guidance from the U.S. Treasury becomes available. As a result of the TCJA, a provisional amount of $149 million has been recorded which reflects a one-time tax charge of approximately $173 million on the deemed repatriation of foreign earnings and a one-time tax benefit of approximately $24 million in respect of the re-valuation of net U.S. deferred tax liabilities at the reduced corporate income tax rate. Income before taxes on income resulting from domestic and foreign operations is as follows:
(in millions) | Year Ended December 31,
| 2017 |  | 2016 |  | 2015
Domestic operations | $ | 1,723 |  |  | $ | 2,585 |  |  | $ | 1,266 |
Foreign operations | 738 |  |  | 603 |  |  | 549 |
Total income before taxes | $ | 2,461 |  |  | $ | 3,188 |  |  | $ | 1,815 |
The provision for taxes on income consists of the following:
(in millions) | Year Ended December 31,
| 2017 |  | 2016 |  | 2015
Federal: |  |  |  |  |
Current | $ | 489 |  |  | $ | 641 |  |  | $ | 90 |
Deferred | 63 |  |  | 79 |  |  | 276 |
Total federal | 552 |  |  | 720 |  |  | 366 |
Foreign: |  |  |  |  |
Current | 194 |  |  | 133 |  |  | 111 |
Deferred | (3 | ) |  | (4 | ) |  | (1 | )
Total foreign | 191 |  |  | 129 |  |  | 110 |
State and local: |  |  |  |  |
Current | 73 |  |  | 99 |  |  | 34 |
Deferred | 7 |  |  | 12 |  |  | 37 |
Total state and local | 80 |  |  | 111 |  |  | 71 |
Total provision for taxes | $ | 823 |  |  | $ | 960 |  |  | $ | 547 |
A reconciliation of the U.S. federal statutory income tax rate to our effective income tax rate for financial reporting purposes is as follows:
| Year Ended December 31,
| 2017 |  | 2016 |  | 2015
U.S. federal statutory income tax rate | 35.0 | % |  | 35.0 | % |  | 35.0 | %
State and local income taxes | 2.5 |  |  | 2.7 |  |  | 2.6 |
Divestitures | — |  |  | (4.3 | ) |  | — |
Foreign operations | (3.9 | ) |  | (2.0 | ) |  | (3.2 | )
Impact of TCJA | 6.0 |  |  | — |  |  | — |
Stock-based compensation | (2.7 | ) |  | — |  |  | — |
S&P Dow Jones Indices LLC joint venture | (1.8 | ) |  | (1.2 | ) |  | (2.0 | )
Tax credits and incentives | (2.1 | ) |  | (1.6 | ) |  | (2.9 | )
Other, net | 0.4 |  |  | 1.5 |  |  | 0.6 |
Effective income tax rate | 33.4 | % |  | 30.1 | % |  | 30.1 | %
The principal temporary differences between the accounting for income and expenses for financial reporting and income tax purposes are as follows:
(in millions) | December 31,
| 2017 |  | 2016
Deferred tax assets: |  |  |
Legal and regulatory settlements | $ | 27 |  |  | $ | 23 |
Employee compensation | 50 |  |  | 78 |
Accrued expenses | 47 |  |  | 87 |
Postretirement benefits | 34 |  |  | 105 |
Unearned revenue | 26 |  |  | 33 |
Allowance for doubtful accounts | 8 |  |  | 11 |
Loss carryforwards | 135 |  |  | 112 |
Other | 45 |  |  | 3 |
Total deferred tax assets | 372 |  |  | 452 |
Deferred tax liabilities: |  |  |
Goodwill and intangible assets | (249 | ) |  | (320 | )
Fixed assets | (4 | ) |  | (3 | )
Other | — |  |  | — |
Total deferred tax liabilities | (253 | ) |  | (323 | )
Net deferred income tax asset before valuation allowance | 119 |  |  | 129 |
Valuation allowance | (127 | ) |  | (116 | )
Net deferred income tax (liability) asset | $ | (8 | ) |  | $ | 13 |
Reported as: |  |  |
Non-current deferred tax assets | $ | 59 |  |  | $ | 61 |
Non-current deferred tax liabilities | (67 | ) |  | (48 | )
Net deferred income tax (liability) asset | $ | (8 | ) |  | $ | 13 |
We record valuation allowances against deferred income tax assets when we determine that it is more likely than not that such deferred income tax assets will not be realized based upon all the available evidence. The valuation allowance is primarily related to operating losses. We have not recorded deferred income taxes applicable to undistributed earnings of foreign subsidiaries that are indefinitely reinvested in foreign operations. Undistributed earnings that are indefinitely reinvested in foreign operations amounted to $780 million at December 31, 2017. Quantification of the deferred tax liability, if any, associated with indefinitely reinvested earnings is not practicable. We made net income tax payments for continuing and discontinued operations totaling $709 million in 2017, $683 million in 2016, and $260 million in 2015. As of December 31, 2017, we had net operating loss carryforwards of $564 million, of which a major portion has an unlimited carryover period under current law. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
(in millions) | Year ended December 31,
| 2017 |  | 2016 |  | 2015
Balance at beginning of year | $ | 221 |  |  | $ | 162 |  |  | $ | 155 |
Additions based on tax positions related to the current year | 23 |  |  | 48 |  |  | 24 |
Additions for tax positions of prior years | 17 |  |  | 20 |  |  | 16 |
Reduction for tax positions of prior years | (32 | ) |  | (3 | ) |  | (15 | )
Reduction for settlements | (5 | ) |  | (6 | ) |  | (18 | )
Expiration of applicable statutes of limitations | (12 | ) |  | — |  |  | — |
Balance at end of year | $ | 212 |  |  | $ | 221 |  |  | $ | 162 |
The total amount of federal, state and local, and foreign unrecognized tax benefits as of December 31, 2017, 2016 and 2015 was $212 million, $221 million and $162 million, respectively, exclusive of interest and penalties. During the period ending December 31, 2017, the change in unrecognized tax benefits resulted in a net reduction of tax expense of $4 million. We recognize accrued interest and penalties related to unrecognized tax benefits in interest expense and operating-related expense, respectively. In addition to the unrecognized tax benefits, as of December 31, 2017 and 2016, we had $59 million and $44 million, respectively, of accrued interest and penalties associated with unrecognized tax benefits. Based on the current status of income tax audits, we believe that the total amount of unrecognized tax benefits on the balance sheet may be reduced by up to approximately $60 million in the next twelve months as a result of the resolution of local tax examinations. The U.S. federal income tax audits for 2016 and 2015 are in process. During 2017, we completed various state and foreign tax audits and, with few exceptions, we are no longer subject to federal, state and local, or non-U.S. income tax examinations by tax authorities for the years before 2010. The impact to tax expense in 2017, 2016 and 2015 was not material. We file income tax returns in the U.S. federal jurisdiction, various states, and foreign jurisdictions, and we are routinely under audit by many different tax authorities. We believe that our accrual for tax liabilities is adequate for all open audit years based on an assessment of many factors including past experience and interpretations of tax law. This assessment relies on estimates and assumptions and may involve a series of complex judgments about future events. It is possible that tax examinations will be settled prior to December 31, 2018. If any of these tax audit settlements do occur within that period, we would make any necessary adjustments to the accrual for unrecognized tax benefits.

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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration