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Income Taxes | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The provision for income taxes is based on income before income taxes and income (loss) from investments in unconsolidated affiliates, as follows:
| Year Ended December 31,
(In millions) | 2024 |  | 2023 |  | 2022
United States | $ | 3,683 |  |  | $ | 3,342 |  |  | $ | 2,752 |
Foreign | 823 |  |  | 556 |  |  | 161 |
Total | $ | 4,506 |  |  | $ | 3,898 |  |  | $ | 2,913 |
The income tax provision was as follows:
| Year Ended December 31,
(In millions) | 2024 |  | 2023 |  | 2022
Components of income tax provision (benefit): |  |  |  |  |
Current: |  |  |  |  |
Federal | $ | 831 |  |  | $ | 913 |  |  | $ | 802 |
State | 242 |  |  | 148 |  |  | 175 |
Foreign | 230 |  |  | 204 |  |  | 132 |
| 1,303 |  |  | 1,265 |  |  | 1,109 |
Deferred: |  |  |  |  |
Federal | (407) |  |  | (380) |  |  | (339) |
State | (112) |  |  | (12) |  |  | (84) |
Foreign | (143) |  |  | (119) |  |  | (135) |
| (662) |  |  | (511) |  |  | (558) |
Income tax provision | $ | 641 |  |  | $ | 754 |  |  | $ | 551 |
A reconciliation of the statutory federal income tax rate to the Company’s effective income tax rate is as follows:
| Year Ended December 31,
| 2024 |  | 2023 |  | 2022
Statutory federal income tax rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State income taxes, net of federal effect | 2.6 | % |  | 2.8 | % |  | 2.5 | %
Foreign derived intangibles income deduction | — | % |  | (0.4) | % |  | (0.9) | %
Excess tax benefit from share-based awards | (1.3) | % |  | (0.8) | % |  | (0.8) | %
Sale of businesses and subsidiary restructuring | (0.2) | % |  | (1.3) | % |  | (2.2) | %
Unrecognized tax benefits | — | % |  | (0.2) | % |  | (0.5) | %
Nondeductible executive compensation | 0.3 | % |  | 0.2 | % |  | 0.4 | %
Transferable federal tax credits (1) | (2.3) | % |  | (1.4) | % |  | — | %
Non-cash impairment charge (see Note 8) | (2.9) | % |  | — | % |  | — | %
Valuation allowance | (1.0) | % |  | (0.6) | % |  | (0.5) | %
Other, net | (2.0) | % |  | — | % |  | (0.1) | %
Effective income tax rate | 14.2 | % |  | 19.3 | % |  | 18.9 | %
(1) Pursuant to provisions under the Inflation Reduction Act, the Company purchased transferable federal tax credits during 2024 and 2023 from various counterparties. Such federal tax credits were purchased at negotiated discounts, resulting in an income tax benefit recorded during the years ended December 31, 2024 and 2023. Receivables associated with transferable federal tax credits are recorded within prepaid expenses and other current assets, and amounts owed to counterparties for the purchased credits are recorded within accounts payable and other current liabilities within the consolidated balance sheets at December 31, 2024 and 2023. Significant components of deferred tax assets and liabilities consisted of the following:
| December 31,
(In millions) | 2024 |  | 2023
Accrued expenses | $ | 167 |  |  | $ | 193 |
Share-based compensation | 93 |  |  | 122 |
Net operating loss and credit carry-forwards | 586 |  |  | 642 |
Leasing liabilities | 258 |  |  | 183 |
Other | 215 |  |  | 252 |
Subtotal | 1,319 |  |  | 1,392 |
Valuation allowance | (404) |  |  | (467) |
Total deferred tax assets | 915 |  |  | 925 |
Capitalized software development costs | (219) |  |  | (331) |
Intangible assets | (1,728) |  |  | (2,047) |
Property and equipment | (278) |  |  | (341) |
Capitalized commissions | (108) |  |  | (112) |
Investments in joint ventures | (392) |  |  | (562) |
Leasing right-of-use assets | (220) |  |  | (144) |
Other | (371) |  |  | (386) |
Total deferred tax liabilities | (3,316) |  |  | (3,923) |
Total | $ | (2,401) |  |  | $ | (2,998) |
The Company maintained a valuation allowance of $404 million and $467 million at December 31, 2024 and 2023, respectively, against its deferred tax assets. Substantially all of the valuation allowance relates to certain foreign and state net operating loss carryforwards. Deferred tax assets and liabilities are reported in the consolidated balance sheets as follows:
| December 31,
(In millions) | 2024 |  | 2023
Noncurrent assets | $ | 76 |  |  | $ | 80 |
Noncurrent liabilities | (2,477) |  |  | (3,078) |
Total | $ | (2,401) |  |  | $ | (2,998) |
Noncurrent deferred tax assets are included in other long-term assets in the consolidated balance sheets at December 31, 2024 and 2023. The following table presents the amounts of federal, state and foreign net operating loss carryforwards and foreign tax credit carryforwards:
| December 31,
(In millions) | 2024 |  | 2023
Net operating loss carryforwards: (1) |  |  |
Federal | $ | 28 |  |  | $ | 86 |
State | 2,829 |  |  | 3,074 |
Foreign | 1,597 |  |  | 1,880 |
Foreign tax credit carryforwards | 43 |  |  | 16 |
(1)At December 31, 2024, the Company had federal net operating loss carryforwards of $28 million, most of which do not expire, state net operating loss carryforwards of $2.8 billion, most of which expire in 2025 through 2044, and foreign net operating loss carryforwards of $1.6 billion, of which $65 million expire in 2025 through 2044, and the remainder of which do not expire. The Company asserts that its investment in its foreign subsidiaries is intended to be indefinitely reinvested. Undistributed historical and future earnings of its foreign subsidiaries are not considered to be indefinitely reinvested. Should these earnings be distributed in the future in the form of dividends or otherwise, the Company may be subject to foreign or U.S. taxes. The Company has the ability and intent to limit distributions so as to not make a distribution in excess of its investment in those subsidiaries. The Company will continue to monitor its global cash requirements and the need to recognize a deferred tax liability. Unrecognized tax benefits were as follows:
| December 31,
(In millions) | 2024 |  | 2023 |  | 2022
Unrecognized tax benefits - Beginning of year | $ | 84 |  |  | $ | 96 |  |  | $ | 124 |
Increases for tax positions taken during the current year | 2 |  |  | 2 |  |  | 3 |
Increases for tax positions taken in prior years | 4 |  |  | 8 |  |  | — |
Decreases for tax positions taken in prior years | — |  |  | (10) |  |  | (18) |
Decreases for settlements | — |  |  | (3) |  |  | (2) |
Lapse of the statute of limitations | (5) |  |  | (9) |  |  | (11) |
Unrecognized tax benefits - End of year | $ | 85 |  |  | $ | 84 |  |  | $ | 96 |
At December 31, 2024, unrecognized tax benefits of $50 million, net of federal and state benefits, would affect the effective income tax rate if recognized. The Company believes it is reasonably possible that the liability for unrecognized tax benefits may decrease by up to $7 million over the next twelve months as a result of possible closure of federal tax audits, potential settlements with certain states and foreign countries, and the lapse of the statute of limitations in various state and foreign jurisdictions. The Company classifies interest expense and penalties related to income taxes as components of its income tax provision. The income tax provision included interest expense and penalties on unrecognized tax benefits of $1 million in 2024, $2 million in 2023 and less than $1 million in 2022. Accrued interest expense and penalties related to unrecognized tax benefits totaled $16 million and $15 million at December 31, 2024 and 2023, respectively. The Company’s U.S. federal income tax returns for 2023 and 2024, and tax returns in certain states and foreign jurisdictions for 2017 through 2024, remain subject to examination by taxing authorities.

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