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Income Taxes | 12 Months Ended
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Dec. 31, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Income tax expense (benefit) attributable to continuing operations for the years ended December 31, 2020, 2019 and 2018, consists of the following (in millions):
| 2020 |  | 2019 |  | 2018
Current provision: |  |  |  |  |
Federal | $ | 81 |  |  | $ | 53 |  |  | $ | 169 |
State | 50 |  |  | 46 |  |  | 50 |
Foreign | 176 |  |  | 116 |  |  | 105 |
Total current provision | $ | 307 |  |  | $ | 215 |  |  | $ | 324 |
Deferred provision (benefit): |  |  |  |  |
Federal | $ | (53) |  |  | $ | (47) |  |  | $ | (95) |
State | (28) |  |  | 7 |  |  | (11) |
Foreign | (130) |  |  | (75) |  |  | (10) |
Total deferred provision (benefit) | (211) |  |  | (115) |  |  | (116) |
Total Provision (benefit) for income taxes | $ | 96 |  |  | $ | 100 |  |  | $ | 208 |
The provision for income taxes is based on pre-tax income from continuing operations, which is as follows for the years ended December 31, 2020, 2019 and 2018 (in millions):
| 2020 |  | 2019 |  | 2018
United States | $ | 441 |  |  | $ | 220 |  |  | $ | 744 |
Foreign | (175) |  |  | 193 |  |  | 360 |
Total | $ | 266 |  |  | $ | 413 |  |  | $ | 1,104 |
Total income tax expense for the years ended December 31, 2020, 2019 and 2018, is allocated as follows (in millions):
| 2020 |  | 2019 |  | 2018
Tax expense (benefit) per statement of earnings | $ | 96 |  |  | $ | 100 |  |  | $ | 208 |
Tax expense (benefit) attributable to discontinued operations | — |  |  | — |  |  | (1) |
Unrealized (loss) gain on foreign currency translation | (154) |  |  | 240 |  |  | — |
Unrealized gain (loss) on interest rate swaps | (7) |  |  | (41) |  |  | — |
Other components of other comprehensive earnings (loss) | — |  |  | (3) |  |  | 1 |
Total income tax expense (benefit) allocated to other comprehensive income | (161) |  |  | 196 |  |  | 1 |
Total income tax expense (benefit) | $ | (65) |  |  | $ | 296 |  |  | $ | 208 |
A reconciliation of the federal statutory income tax rate to the Company's effective income tax rate for the years ended December 31, 2020, 2019 and 2018, is as follows:
| 2020 |  | 2019 |  | 2018
Federal statutory income tax rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
State income taxes | 14.6 |  |  | 2.5 |  |  | 2.9 |
Federal benefit of state taxes | (3.1) |  |  | (0.5) |  |  | (0.6) |
Foreign rate differential | (10.1) |  |  | (1.7) |  |  | — |
U.K. tax rate adjustment | 38.2 |  |  | — |  |  | — |
Tax benefit from stock-based compensation | (18.1) |  |  | (8.1) |  |  | (5.2) |
Acquisition-related items | (15.9) |  |  | 1.8 |  |  | — |
Book basis in excess of tax basis for goodwill impairment and disposition | 9.2 |  |  | — |  |  | 3.0 |
Non-deductible executive compensation | 9.0 |  |  | 10.6 |  |  | 0.4 |
CVR liability fair value and foreign currency adjustment | 8.2 |  |  | 0.7 |  |  | — |
Foreign-derived intangible income deduction | (7.2) |  |  | (3.3) |  |  | (1.8) |
Return to provision adjustments | (4.9) |  |  | (0.4) |  |  | (0.3) |
Research and development credit | (4.1) |  |  | (2.4) |  |  | (0.9) |
State tax rate adjustment | (2.8) |  |  | 5.1 |  |  | — |
Cares Act net operating loss adjustment | (2.3) |  |  | — |  |  | — |
Withholding tax on distribution | 2.1 |  |  | — |  |  | (0.4) |
Deferred tax and other rate adjustments | 1.1 |  |  | 0.2 |  |  | — |
Unrecognized tax benefits | 0.3 |  |  | (1.4) |  |  | (0.3) |
Global intangible low-tax income | — |  |  | — |  |  | 1.1 |
Other | 0.8 |  |  | 0.1 |  |  | (0.1) |
Effective income tax rate | 36.0 | % |  | 24.2 | % |  | 18.8 | %
The significant components of deferred income tax assets and liabilities as of December 31, 2020 and 2019, consist of the following (in millions):
| 2020 |  | 2019
Deferred income tax assets: |  |  |
Net operating loss carryforwards | $ | 221 |  |  | $ | 177 |
Employee benefit accruals | 155 |  |  | 177 |
Other deferred tax assets | 204 |  |  | 142 |
Total gross deferred income tax assets | 580 |  |  | 496 |
Less valuation allowance | (204) |  |  | (178) |
Total deferred income tax assets | 376 |  |  | 318 |
Deferred income tax liabilities: |  |  |
Amortization of goodwill and intangible assets | (3,945) |  |  | (4,123) |
Foreign currency translation adjustment | (95) |  |  | (208) |
Deferred contract costs | (173) |  |  | (125) |
Other deferred tax liabilities | (140) |  |  | (105) |
Total deferred income tax liabilities | (4,353) |  |  | (4,561) |
Net deferred income tax liability | $ | (3,977) |  |  | $ | (4,243) |
Deferred income taxes are classified in the consolidated balance sheets as of December 31, 2020 and 2019, as follows (in millions):
| 2020 |  | 2019
Noncurrent assets (included in Other noncurrent assets) | $ | 40 |  |  | $ | 38 |
Total deferred income tax assets | 40 |  |  | 38 |
Noncurrent liabilities | (4,017) |  |  | (4,281) |
Total deferred income tax liabilities | (4,017) |  |  | (4,281) |
Net deferred income tax liability | $ | (3,977) |  |  | $ | (4,243) |
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 (net of valuation allowance). 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; these assessments 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, 2020 and 2019, the Company had net income taxes receivable of $147 million and $174 million, respectively. These amounts are included in Other receivables in the consolidated balance sheets. As of December 31, 2020 and 2019, the Company has federal, state and foreign net operating loss carryforwards resulting in deferred tax assets of $221 million and $177 million, respectively. The federal and state net operating losses result in deferred tax assets as of December 31, 2020 and 2019, of $90 million and $68 million, respectively, which expire between 2022 and 2040. The Company has a valuation allowance related to these deferred tax assets for net operating loss carryforwards in the amounts of $48 million and $48 million as of December 31, 2020 and 2019. The Company has foreign net operating loss carryforwards resulting in deferred tax assets as of December 31, 2020 and 2019, of $131 million and $110 million, respectively. The Company has a full valuation allowance against the foreign net operating losses as of December 31, 2020 and 2019. 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 2013. Substantially all state income tax returns have been concluded through 2013. As of December 31, 2020 and 2019, the Company had gross unrecognized tax benefits of $44 million and $45 million of which $38 million and $38 million, respectively, would favorably impact our income tax rate in the event that the unrecognized tax benefits are recognized. The following table reconciles the gross amounts of unrecognized tax benefits at the beginning and end of the period (in millions):
| Gross Amount
Amounts of unrecognized tax benefits 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 |
Amount of decreases due to lapse of the applicable statute of limitations | (1) |
Amount of decreases due to settlements | (9) |
Increases as a result of tax positions taken in the current period | 9 |
Amount of unrecognized tax benefit as of December 31, 2020 | $ | 44 |
The total amount of interest expense recognized in the consolidated statements of earnings for unpaid taxes is $3 million, $3 million and $4 million for the years ended December 31, 2020, 2019 and 2018, respectively. The total amount of interest and penalties included in the consolidated balance sheets is $15 million and $19 million as of December 31, 2020 and 2019, respectively. Interest and penalties are recorded as a component of income tax expense in the consolidated statements of earnings. Due to the expiration of various statutes of limitation in the next 12 months, an estimated $1 million of gross unrecognized tax benefits may be recognized during that 12-month period.

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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://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
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