XML 55 R24.htm IDEA: XBRL DOCUMENT v3.22.0.1
Income Taxes
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Income tax expense (benefit) attributable to continuing operations for the years ended December 31, 2021, 2020 and 2019, consists of the following (in millions):
 202120202019
Current provision (benefit):   
Federal$220 $81 $53 
State68 50 46 
Foreign172 176 116 
Total current provision$460 $307 $215 
Deferred provision (benefit):   
Federal$(118)$(53)$(47)
State(11)(28)7 
Foreign40 (130)(75)
Total deferred provision(89)(211)(115)
Total provision for income taxes$371 $96 $100 

The provision for income taxes is based on pre-tax income from continuing operations, which is as follows for the years ended December 31, 2021, 2020 and 2019 (in millions):
 202120202019
United States$747 $441 $220 
Foreign42 (175)193 
Total$789 $266 $413 

Total income tax expense for the years ended December 31, 2021, 2020 and 2019, is allocated as follows (in millions):
 202120202019
Tax expense (benefit) per statements of earnings$371 $96 $100 
  Unrealized gain (loss) on derivatives141 (7)(41)
Foreign currency translation adjustments143 (154)240 
   Other components of other comprehensive earnings (loss)— — (3)
Total income tax expense (benefit) allocated to other comprehensive earnings284 (161)196 
Total income tax expense (benefit)$655 $(65)$296 
A reconciliation of the federal statutory income tax rate to the Company's effective income tax rate for the years ended December 31, 2021, 2020 and 2019, is as follows:
 202120202019
Federal statutory income tax rate21.0 %21.0 %21.0 %
State income taxes6.7 14.6 2.5 
Federal benefit of state taxes(1.4)(3.1)(0.5)
Foreign rate differential(4.5)(10.1)(1.7)
U.K. tax rate adjustment23.6 38.2 — 
Non-deductible executive compensation3.5 9.0 10.6 
Withholding tax on actual and estimated remittances2.9 2.1 — 
Foreign-derived intangible income deduction(2.4)(7.2)(3.3)
Tax benefit from stock-based compensation(2.2)(18.1)(8.1)
CVR liability fair value and foreign currency adjustment2.0 8.2 0.7 
Research and development credit(1.6)(4.1)(2.4)
Unrecognized tax benefits0.6 0.3 (1.4)
Return to provision adjustments(0.3)(4.9)(0.4)
Acquisition-related items— (15.9)1.8 
Book basis in excess of tax basis for goodwill impairment and disposition— 9.2 — 
State tax rate adjustment— (2.8)5.1 
Cares Act net operating loss adjustment— (2.3)— 
Deferred tax and other rate adjustments— 1.1 0.2 
Other(0.9)0.8 0.1 
Effective income tax rate47.0 %36.0 %24.2 %

The significant components of deferred income tax assets and liabilities as of December 31, 2021 and 2020, consist of the following (in millions):
 20212020
Deferred income tax assets:  
Net operating loss carryforwards$194 $221 
Employee benefit accruals173 155 
Other deferred tax assets154 204 
Total gross deferred income tax assets521 580 
Less valuation allowance(191)(204)
Total deferred income tax assets330 376 
Deferred income tax liabilities:  
Amortization of goodwill and intangible assets(3,743)(3,945)
Foreign currency translation adjustment(320)(95)
Deferred contract costs(196)(173)
Other deferred tax liabilities(215)(140)
Total deferred income tax liabilities(4,474)(4,353)
Net deferred income tax liability$(4,144)$(3,977)
Deferred income taxes are classified in the consolidated balance sheets as of December 31, 2021 and 2020, as follows (in millions):
 20212020
Noncurrent deferred income tax assets (included in Other noncurrent assets)$49 $40 
Noncurrent deferred income tax liabilities(4,193)(4,017)
Net deferred income tax liability$(4,144)$(3,977)

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, 2021 and 2020, the Company had net income taxes receivable of $132 million and $147 million, respectively. These amounts are included in Other receivables in the consolidated balance sheets.

As of December 31, 2021 and 2020, the Company has federal, state and foreign net operating loss carryforwards resulting in deferred tax assets of $194 million and $221 million, respectively. The federal and state net operating losses result in deferred tax assets as of December 31, 2021 and 2020, of $69 million and $90 million, respectively, which expire between 2022 and 2041. The Company has a valuation allowance related to these deferred tax assets for net operating loss carryforwards in the amounts of $41 million and $48 million as of December 31, 2021 and 2020. The Company has foreign net operating loss carryforwards resulting in deferred tax assets as of December 31, 2021 and 2020, of $125 million and $131 million, respectively. The Company has a full valuation allowance against the foreign net operating losses as of December 31, 2021 and 2020.

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 2018. 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. Tax years that remain subject to examination by major foreign and state tax jurisdictions are 2014 and forward.
As of December 31, 2021 and 2020, the Company had gross unrecognized tax benefits of $54 million and $44 million of which $47 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, 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 period9 
Amount of unrecognized tax benefit as of December 31, 202044 
Amount of decreases due to lapse of the applicable statute of limitations(4)
Amount of decreases due to settlements(2)
Increases as a result of tax positions taken in prior period11 
Increases as a result of tax positions taken in the current period6 
Foreign currency translation(1)
Amount of unrecognized tax benefit as of December 31, 2021$54 
The total amount of interest expense recognized in the consolidated statements of earnings for unpaid taxes is $3 million, $3 million and $3 million for the years ended December 31, 2021, 2020 and 2019, respectively. The total amount of interest and penalties included in the consolidated balance sheets is $16 million and $15 million as of December 31, 2021 and 2020, respectively. Interest and penalties are recorded as a component of income tax expense in the consolidated statements of earnings.