

	2019			2018			2017
Current provision:
Federal	$	53		$	169		$	476
State	46			50			81
Foreign	116			105			127
Total current provision	$	215		$	324		$	684
Deferred provision (benefit):
Federal	$	(47	)	$	(95	)	$	(979	)
State	7			(11		)	(24		)
Foreign	(75		)	(10		)	(2		)
Total deferred provision (benefit)	(115		)	(116		)	(1,005		)
Total Provision (benefit) for income taxes	$	100		$	208		$	(321	)



	2019			2018			2017
Tax expense (benefit) per statement of earnings	$	100		$	208		$	(321	)
Tax expense (benefit) attributable to discontinued operations	—			(1		)	—
Unrealized (loss) gain on foreign currency translation	240			—			—
Unrealized gain (loss) on interest rate swaps	(41		)	—			—
Other components of other comprehensive earnings (loss)	(3		)	1			(11		)
Total income tax expense (benefit) allocated to other comprehensive income	196			1			(11		)
Total income tax expense (benefit)	$	296		$	208		$	(332	)



	2019		2018		2017
Federal statutory income tax rate	21.0	%	21.0	%	35.0	%
State income taxes	2.5		3.0		2.4
Federal benefit of state taxes	(0.5	)	(0.6	)	(0.8	)
Foreign rate differential	(1.7	)	—		(5.1	)
Non-deductible executive compensation	10.6		—		—
Tax benefit from stock-based compensation	(8.1	)	(5.2	)	(6.7	)
State tax rate adjustment	5.1		—		—
Foreign-derived intangible income deduction	(3.3	)	(1.8	)	—
Research and development credit	(2.4	)	(0.9	)	(0.9	)
Unrecognized tax benefits	(1.4	)	(0.3	)	—
Book basis in excess of tax basis for dispositions	—		3.0		18.5
Tax Cuts and Jobs Act of 2017	—		—		(73.1	)
Other	2.4		0.6		(2.2	)
Effective income tax rate	24.2	%	18.8	%	(32.9	)%



	2019			2018
Deferred income tax assets:
Net operating loss carryforwards	$	177		$	108
Employee benefit accruals	177			58
Other deferred tax assets	142			105
Total gross deferred income tax assets	496			271
Less valuation allowance	(178		)	(116		)
Total deferred income tax assets	318			155
Deferred income tax liabilities:
Amortization of goodwill and intangible assets	(4,123		)	(1,291		)
Foreign currency translation adjustment	(208		)	—
Deferred contract costs	(125		)	(109		)
Other deferred tax liabilities	(105		)	(83		)
Total deferred income tax liabilities	(4,561		)	(1,483		)
Net deferred income tax liability	$	(4,243	)	$	(1,328	)



	2019			2018
Noncurrent assets (included in Other noncurrent assets)	$	38		$	32
Total deferred income tax assets	38			32
Noncurrent liabilities	(4,281		)	(1,360		)
Total deferred income tax liabilities	(4,281		)	(1,360		)
Net deferred income tax liability	$	(4,243	)	$	(1,328	)

We believe that based on our historical pattern of taxable income, projections of future income, tax planning strategies and other relevant evidence, the Company will produce sufficient income in the future to realize its deferred income tax assets. A valuation allowance is established for any portion of a deferred income tax asset for which we believe it is more likely than not that the Company will not be able to realize the benefits of all or a portion of that deferred income tax asset. We also receive periodic assessments from taxing authorities challenging our positions that must be taken into consideration in determining our tax accruals. Resolving these assessments, which may or may not result in additional taxes due, may require an extended period of time. Adjustments to the valuation allowance will be made if there is a change in our assessment of the amount of deferred income tax asset that is realizable.

As of December 31, 2019 and 2018, the Company had net income taxes receivable of $174 million and $30 million, respectively. These amounts are included in Other receivables and Accounts payable, accrued and other liabilities as of December 31, 2019 and 2018, in the Consolidated Balance Sheets.

As of December 31, 2019 and 2018, the Company has federal, state and foreign net operating loss carryforwards resulting in deferred tax assets of $177 million and $108 million, respectively. The federal and state net operating losses result in deferred tax assets as of December 31, 2019 and 2018 of $68 million and $42 million, respectively, which expire between 2021 and 2039. The Company has a valuation allowance related to these deferred tax assets for net operating loss carryforwards in the amounts of $48 million and $36 million as of December 31, 2019 and 2018. The Company has foreign net operating loss carryforwards resulting in deferred tax assets as of December 31, 2019 and 2018 of $110 million and $66 million, respectively. The Company has a full valuation allowance against the foreign net operating losses as of December 31, 2019 and December 31, 2018.

The Company participates in the IRS' Compliance Assurance Process ("CAP"), which is a real-time continuous audit. The IRS has completed its review for years through 2017. Currently, we believe the ultimate resolution of the IRS examinations will not result in a material adverse effect to the Company's financial position or results of operations. Substantially all material foreign income tax return matters have been concluded through 2012. Substantially all state income tax returns have been concluded through 2012.

As of December 31, 2019 and 2018, the Company had gross unrecognized tax benefits of $45 million and $61 million of which $38 million and $52 million would favorably impact our income tax rate in the event that the unrecognized tax benefits are recognized.



	Gross Amount
Amounts of unrecognized tax benefits as of January 1, 2018	$	75
Amount of decreases due to lapse of the applicable statute of limitations	(4		)
Amount of decreases due to settlements	(12		)
Increases as a result of tax positions taken in the current period	1
Increases as a result of tax positions taken in a prior period	1
Amount of unrecognized tax benefit as of December 31, 2018	61
Amount of decreases due to lapse of the applicable statute of limitations	(5		)
Amount of decreases due to settlements	(17		)
Increases as a result of tax positions taken in the current period	1
Assumed in Worldpay acquisition	5
Amount of unrecognized tax benefit as of December 31, 2019	$	45

The total amount of interest expense recognized in the Consolidated Statements of Earnings for unpaid taxes is $3 million, $4 million and $5 million for the years ended December 31, 2019, 2018 and 2017, respectively. The total amount of interest and penalties included in the Consolidated Balance Sheets is $19 million and $24 million as of December 31, 2019 and 2018, respectively. Interest and penalties are recorded as a component of income tax expense in the Consolidated Statements of Earnings.

On December 22, 2017, H.R. 1, originally known as the Tax Cuts and Jobs Act (the "Act") was signed into law. The Act included significant changes to the Internal Revenue Code. Changes impacting the Company were the decrease in the corporate Federal rate from 35% to 21%, the transition to a territorial system of taxation from a worldwide system, and a one-time tax on the deemed repatriation of cumulative foreign earnings and profits. In 2017, the Company recorded amounts for certain enactment-date effects of the Act by applying the guidance in SEC Staff Accounting Bulletin No. 118 ("SAB 118").

Due to 2017 tax reform, the Company provided for U.S. income tax on its deemed repatriation of accumulated foreign earnings. Those historic earnings are indefinitely reinvested offshore, however, those undistributed earnings could still be subject to additional income tax if repatriated. It is not practicable to determine the unrecognized deferred tax liability on a hypothetical distribution of those earnings.