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Income Taxes | 12 Months Ended
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Dec. 31, 2024
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Components of income (loss) before income taxes:
(in millions) | 2024 |  | 2023 |  | 2022
Domestic | $ | (20) |  |  | $ | (1) |  |  | $ | 24 |
Foreign | 435 |  |  | 347 |  |  | 359 |
Total income before income taxes | $ | 415 |  |  | $ | 346 |  |  | $ | 383 |
Components of the provision (benefit) for income taxes:
(in millions) | 2024 |  | 2023 |  | 2022
Current tax provision |  |  |  |  |
U.S. Federal | $ | (3) |  |  | $ | 1 |  |  | $ | 10 |
U.S. State | 5 |  |  | 1 |  |  | (1) |
Foreign | 73 |  |  | 54 |  |  | 55 |
Deferred tax provision |  |  |  |  |
U.S. Federal | (6) |  |  | 9 |  |  | 7 |
U.S. State | 6 |  |  | 3 |  |  | (4) |
Foreign | (5) |  |  | 2 |  |  | 7 |
Total income tax provision | $ | 70 |  |  | $ | 70 |  |  | $ | 74 |
Reconciliation of the U.S. federal statutory rate to UL Solutions effective tax rate:
| 2024 |  | 2023 |  | 2022
U.S. Federal Statutory Rate | 21.0 | % |  | 21.0 | % |  | 21.0 | %
Effect of: |  |  |  |  |
Foreign income taxed at different rates(a) | (4.2 | %) |  | (5.0 | %) |  | (2.3 | %)
U.S. tax on foreign activities | 0.6 | % |  | 2.0 | % |  | 1.3 | %
State and local income taxes, net of federal benefit | 2.0 | % |  | 0.9 | % |  | (1.3 | %)
Goodwill impairment | — | % |  | 1.8 | % |  | — | %
U.S. nondeductible compensation | 1.9 | % |  | — | % |  | — | %
Release of uncertain tax positions for lapse of statutes(a) | (4.7 | %) |  | (0.1 | %) |  | — | %
Other reconciling items, net | 0.3 | % |  | (0.4 | %) |  | 0.6 | %
Effective tax rate | 16.9 | % |  | 20.2 | % |  | 19.3 | %
__________ (a)The Company has reclassified the amounts presented for the year ended December 31, 2023 to conform to the current period’s presentation. Of the 1.9% U.S. nondeductible compensation in 2024, 1.0% is for the reduction to previously established deferred tax assets due to the Company becoming subject to Section 162(m) of the U.S. Internal Revenue Code, which limits U.S. public company compensation expenses of certain executive officers that were previously deductible as a private company. The remainder is related to current year compensation expense limitations. Other reconciling items consist of non-deductible expenses such as meals and entertainment, transaction costs related to merger and acquisition activities, movement in valuation allowances, and general business credits such as research and development tax credits. The Company has not recognized deferred tax liabilities in the U.S. with respect to its outside basis differences in most foreign affiliates. As of December 31, 2024 and 2023, approximately $318 million and $289 million, respectively, of the Company’s accumulated undistributed earnings from these foreign subsidiaries are intended to be indefinitely reinvested. It is not practicable to determine the amount of unrecognized deferred tax liabilities on these earnings. The Company is not indefinitely reinvested with regard to select other foreign affiliates and has recorded a deferred tax liability of $6 million and $5 million in its financial statements as of December 31, 2024 and 2023, respectively, for foreign withholding taxes on the unrepatriated earnings of those entities, where applicable. Components of the deferred income tax assets and liabilities:
(in millions) | 2024 |  | 2023 |  |
Deferred tax assets |  |  |  |  |
Accrued pension and postretirement liabilities | $ | 38 |  |  | $ | 47 |  |  |
Accrued employee benefits | 41 |  |  | 42 |  |  |
Other accrued expenses | 7 |  |  | 9 |  |  |
Net operating loss carryforward | 44 |  |  | 46 |  |  |
Advance payments | 39 |  |  | 25 |  |  |
Operating lease liabilities | 46 |  |  | 38 |  |  |
Capitalized research and development | 18 |  |  | 10 |  |  |
Foreign tax credit | 12 |  |  | 8 |  |  |
Other | 12 |  |  | 5 |  |  |
Subtotal (before valuation allowances) | 257 |  |  | 230 |  |  |
Valuation allowances | (53) |  |  | (56) |  |  |
Total deferred tax assets | 204 |  |  | 174 |  |  |
Deferred tax liabilities |  |  |  |  |
Basis difference for intangible assets | (38) |  |  | (32) |  |  |
Basis difference for fixed assets | (20) |  |  | (6) |  |  |
Operating lease right-of-use assets | (45) |  |  | (36) |  |  |
Tax on unrepatriated earnings | (6) |  |  | (5) |  |  |
Other | (10) |  |  | (9) |  |  |
Total deferred tax liabilities | (119) |  |  | (88) |  |  |
Net deferred income tax assets | $ | 85 |  |  | $ | 86 |  |  |
As of December 31, 2024, the Company has approximately $44 million of deferred tax assets related to net operating loss (“NOL”) carryforwards primarily attributable to foreign affiliates. If not used, $8 million of deferred tax assets will be written off to reflect the reduction of the NOL carryforwards that will expire between 2025 and 2044, while the remaining carryforward is indefinite. The use of certain NOL carryforwards is limited due to rules regarding acquired tax attributes, loss sharing between group members, and business continuity. The valuation allowances represent a reduction to deferred tax assets, including certain NOLs, for which the realization is unlikely. Movements in valuation allowance:
Deferred Tax Valuation Allowance |  | Balance at Beginning of Year |  | Charged to Costs and Expenses |  | Deductions |  |  |  | Balance at End of Year
(in millions) |  |  |  |  |  |  |  |  |  |
Year Ended December 31, 2024 |  | $ | 56 |  |  | $ | 7 |  |  | $ | (10) |  |  |  |  | $ | 53 |
Year Ended December 31, 2023 |  | $ | 47 |  |  | $ | 14 |  |  | $ | (5) |  |  |  |  | $ | 56 |
Year Ended December 31, 2022 |  | $ | 42 |  |  | $ | 10 |  |  | $ | (5) |  |  |  |  | $ | 47 |
Uncertain Tax Positions Movements in reserve for uncertain tax positions:
(in millions) | 2024 |  | 2023 |  | 2022
Balance at January 1, | $ | 30 |  |  | $ | 26 |  |  | $ | 25 |
Increases related to prior period tax positions | 2 |  |  | 3 |  |  | 5 |
Decreases related to prior period tax positions | (5) |  |  | — |  |  | (3) |
Increases related to current period tax positions | — |  |  | 2 |  |  | 1 |
Lapse of statute of limitation | (19) |  |  | (1) |  |  | — |
Settlement with taxing authorities | (1) |  |  | — |  |  | (2) |
Balance at December 31, | $ | 7 |  |  | $ | 30 |  |  | $ | 26 |
The total unrecognized tax benefits that, if recognized, would affect the Company’s effective tax rate were $6 million, $30 million and $26 million as of December 31, 2024, 2023 and 2022, respectively. The Company had accrued for interest and penalties of $3 million, $12 million and $10 million, as of December 31, 2024, 2023 and 2022, respectively, which are included within other liabilities in the Company’s Consolidated Balance Sheets. The Company is under audit in multiple state and foreign tax jurisdictions. It is reasonably possible that the amount of unrecognized tax benefits will change during the next 12 months. This could be due to completion of the aforementioned foreign and state income tax audits, the expiration of statutes of limitations and/or new information that causes the Company to reassess the total amount of unrecognized tax benefits recorded. The timing of the resolution of income tax examinations is uncertain as are the amounts and timing of tax payments that are part of any audit settlement process. These events could cause fluctuations in the balance sheet classification of our tax assets and liabilities. The Company believes that within the next 12 months, it is reasonably possible that either certain audits will conclude or statutes of limitations on certain income tax periods will expire, or both. Although the timing of resolution, settlement and closing of audits is not certain, the Company does not expect the balance of unrecognized tax benefits to change by a material amount in the next 12 months. In the United States, the Company has open years ranging from 2016 to 2024 and significant foreign jurisdictions still open for audit between 2009 and 2024. The Company believes sufficient provision has been made for potential adjustments for all years that are not closed by the statute in all major tax jurisdictions and that any such adjustments would not have a material adverse effect on the Company’s financial position, liquidity, or results of operations.

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