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Taxes on Income | 12 Months Ended
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Dec. 31, 2019
Income Tax Disclosure [Abstract] |
Taxes on Income | Taxes on Income Income before taxes on income resulting from domestic and foreign operations is as follows:
(in millions) | Year Ended December 31,
| 2019 |  | 2018 |  | 2017
Domestic operations | $ | 2,068 |  |  | $ | 1,857 |  |  | $ | 1,723 |
Foreign operations | 862 |  |  | 824 |  |  | 738 |
Total income before taxes | $ | 2,930 |  |  | $ | 2,681 |  |  | $ | 2,461 |
The provision for taxes on income consists of the following:
(in millions) | Year Ended December 31,
| 2019 |  | 2018 |  | 2017
Federal: |  |  |  |  |
Current | $ | 303 |  |  | $ | 198 |  |  | $ | 489 |
Deferred | 13 |  |  | 53 |  |  | 63 |
Total federal | 316 |  |  | 251 |  |  | 552 |
Foreign: |  |  |  |  |
Current | 201 |  |  | 214 |  |  | 194 |
Deferred | 14 |  |  | (2 | ) |  | (3 | )
Total foreign | 215 |  |  | 212 |  |  | 191 |
State and local: |  |  |  |  |
Current | 93 |  |  | 84 |  |  | 73 |
Deferred | 3 |  |  | 13 |  |  | 7 |
Total state and local | 96 |  |  | 97 |  |  | 80 |
Total provision for taxes | $ | 627 |  |  | $ | 560 |  |  | $ | 823 |
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,
| 2019 |  | 2018 |  | 2017
U.S. federal statutory income tax rate | 21.0 | % |  | 21.0 | % |  | 35.0 | %
State and local income taxes | 2.6 |  |  | 2.8 |  |  | 2.5 |
Foreign operations | (0.3 | ) |  | 0.2 |  |  | (3.9 | )
TCJA Transition Tax | — |  |  | (0.3 | ) |  | 6.0 |
Stock-based compensation | (1.4 | ) |  | (1.2 | ) |  | (2.7 | )
S&P Dow Jones Indices LLC joint venture | (1.2 | ) |  | (1.2 | ) |  | (1.8 | )
Tax credits and incentives | (1.7 | ) |  | (1.7 | ) |  | (2.1 | )
Other, net | 2.4 |  |  | 1.3 |  |  | 0.4 |
Effective income tax rate | 21.4 | % |  | 20.9 | % |  | 33.4 | %
The increase in the effective income tax rate in 2019 was primarily due to an increase in accruals for potential tax liabilities for prior years in various jurisdictions. The decrease in the effective income tax rate in 2018 was primarily due to the reduction of the U.S. federal corporate tax rate as a result of the enactment of the Tax Cuts and Jobs Act (“TCJA”). Additionally, a one-time transition tax charge of $149 million due to the TCJA was recorded in 2017, which included tax expense of approximately $173 million on the deemed repatriation of foreign earnings and a tax benefit of approximately $24 million in respect of the re-valuation of the net U.S. deferred tax liabilities at the reduced corporate income tax rate. We have elected to recognize the tax on Global Intangible Low Taxed Income (“GILTI”) as a period expense in the year the tax is incurred. GILTI expense is included in Other, net above. 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,
| 2019 |  | 2018
Deferred tax assets: |  |  |
Legal and regulatory settlements | $ | 2 |  |  | $ | 2 |
Employee compensation | 58 |  |  | 57 |
Accrued expenses | 30 |  |  | 36 |
Postretirement benefits | 27 |  |  | 48 |
Unearned revenue | 28 |  |  | 29 |
Allowance for doubtful accounts | 9 |  |  | 8 |
Loss carryforwards | 155 |  |  | 155 |
Other | 24 |  |  | 24 |
Total deferred tax assets | 333 |  |  | 359 |
Deferred tax liabilities: |  |  |
Goodwill and intangible assets | (318 | ) |  | (295 | )
Total deferred tax liabilities | (318 | ) |  | (295 | )
Net deferred income tax asset before valuation allowance | 15 |  |  | 64 |
Valuation allowance | (163 | ) |  | (156 | )
Net deferred income tax (liability) asset | $ | (148 | ) |  | $ | (92 | )
Reported as: |  |  |
Non-current deferred tax assets | $ | 52 |  |  | $ | 52 |
Non-current deferred tax liabilities | (200 | ) |  | (144 | )
Net deferred income tax (liability) asset | $ | (148 | ) |  | $ | (92 | )
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. As of December 31, 2019, we have approximately $3.2 billion of undistributed earnings of our foreign subsidiaries, of which $776 million is reinvested indefinitely in our foreign operations. We have not recorded deferred income taxes applicable to undistributed earnings of foreign subsidiaries that are indefinitely reinvested in foreign operations. Quantification of the deferred tax liability, if any, associated with indefinitely reinvested earnings is not practicable. We made net income tax payments totaling $659 million in 2019, $558 million in 2018, and $709 million in 2017. As of December 31, 2019, we had net operating loss carryforwards of $689 million, of which a significant 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,
| 2019 |  | 2018 |  | 2017
Balance at beginning of year | $ | 147 |  |  | $ | 212 |  |  | $ | 221 |
Additions based on tax positions related to the current year | 21 |  |  | 19 |  |  | 23 |
Additions for tax positions of prior years | 11 |  |  | 2 |  |  | 17 |
Reduction for tax positions of prior years | (15 | ) |  | (21 | ) |  | (32 | )
Reduction for settlements | (33 | ) |  | (65 | ) |  | (5 | )
Expiration of applicable statutes of limitations | (7 | ) |  | — |  |  | (12 | )
Balance at end of year | $ | 124 |  |  | $ | 147 |  |  | $ | 212 |
The total amount of federal, state and local, and foreign unrecognized tax benefits as of December 31, 2019, 2018 and 2017 was $124 million, $147 million and $212 million, respectively, exclusive of interest and penalties. During the period ended December 31, 2019, the change in unrecognized tax benefits resulted in a net increase of tax expense of $10 million. We recognize accrued interest and penalties related to unrecognized tax benefits in interest expense and operating-related expense, respectively. 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 $10 million in the next twelve months as a result of the resolution of local tax examinations. In addition to the unrecognized tax benefits, as of December 31, 2019 and 2018, we had $20 million and $35 million, respectively, of accrued interest and penalties associated with unrecognized tax benefits. The U.S. federal income tax audit for 2017 and 2018 is in process. During 2019, we completed state and foreign tax audits and, with few exceptions, we are no longer subject to federal, state, or foreign income tax examinations by tax authorities for the years before 2013. The impact to tax expense in 2019, 2018 and 2017 was not material. We file income tax returns in the U.S. federal jurisdiction and various state 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, 2020. 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.

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- 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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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