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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 components of income before income taxes were as follows:
| 2024 |  | 2023 |  | 2022
U.S. | $ | (448) |  |  | $ | (1) |  |  | $ | 295 |
Foreign | 1,191 |  |  | 796 |  |  | 761 |
| $ | 743 |  |  | $ | 795 |  |  | $ | 1,056 |
The provision for income taxes consisted of the following:
| 2024 |  | 2023 |  | 2022
Current tax: |  |  |  |  |
U.S. federal | $ | 89 |  |  | $ | 31 |  |  | $ | 18 |
State and foreign | 262 |  |  | 244 |  |  | 190 |
| $ | 351 |  |  | $ | 275 |  |  | $ | 208 |
Deferred tax: |  |  |  |  |
U.S. federal | $ | (109) |  |  | $ | (27) |  |  | $ | 46 |
State and foreign | (59) |  |  | (26) |  |  | (11) |
| (168) |  |  | (53) |  |  | 35 |
Total | $ | 183 |  |  | $ | 222 |  |  | $ | 243 |
The provision for income taxes differs from the amount of income tax determined by applying the U.S. statutory federal income tax rate to pre-tax income as a result of the following items:
| 2024 |  | 2023 |  | 2022 |  |  |  |
U.S. statutory rate at 21% | $ | 156 |  |  | $ | 167 |  |  | $ | 222 |  |  |  |  |
Statutory tax rate differences | (17) |  |  | 6 |  |  | 9 |  |  |  |  |
Taxes on foreign income | (30) |  |  | 1 |  |  | (39) |  |  |  |  |
Foreign withholding taxes | 19 |  |  | 23 |  |  | 5 |  |  |  |  |
U.S. taxes on foreign income, net of credits | 67 |  |  | 5 |  |  | 1 |  |  |  |  |
State taxes | (12) |  |  | 2 |  |  | (2) |  |  |  |  |
Valuation allowance changes | (17) |  |  | 5 |  |  | 33 |  |  |  |  |
Tax contingencies | 6 |  |  | 2 |  |  | 7 |  |  |  |  |
Tax law changes | 5 |  |  | 8 |  |  | 2 |  |  |  |  |
Other items, net | 6 |  |  | 3 |  |  | 5 |  |  |  |  |
Income tax provision | $ | 183 |  |  | $ | 222 |  |  | $ | 243 |  |  |  |  |
The Company benefits from certain incentives in Brazil which allow it to pay reduced income taxes. The incentives expire at various dates beginning in December 2026. These incentives increased net income attributable to the Company by $22 in 2024,$20 in 2023 and $21 in 2022. In the fourth quarter of 2024, the Company recorded a gain of $275 related to the $338 distribution from the sale of the Eviosys equity method investment by KPS Capital Partners. The tax charge of $64 is included in U.S. taxes on foreign income, net of credits, as a portion of the distribution was taxable in the U.S. The distribution was non-taxable in Switzerland, and is shown as a reduction of taxes on foreign income above. In 2022, taxes on foreign income includes income tax charges of $11 for the sale of the Company's Transit Packaging segment's Kiwiplan business in 2022. During the year-ended December 31, 2022, the Company recorded a deferred tax asset of $21 for goodwill amortization and net operating loss carryforwards in Switzerland and established a full valuation allowance for these deferred tax assets as it was more likely than not that the deferred tax assets would not be utilized prior to their expiration. During the year-ended December 31, 2024, the Company recognized a deferred tax benefit of $17 resulting from the release of this valuation allowance due to improved profitability and continued forecasted income in Switzerland. On July 8, 2022, Pennsylvania enacted a corporate net income tax rate reduction over a nine year period. The income tax rate for the 2022 and 2023 tax years were 9.99% and 8.99%, respectively. Starting with the 2024 tax year, the income tax rate is reduced by 0.50% annually until it reaches 4.99% for the 2031 tax year. The remeasurement of the Company's deferred taxes in 2022 had a $78 impact on the Company's state net operating loss carryforward and corresponding valuation allowance. As of December 31, 2024, the Company had not provided deferred taxes on approximately $1,100 of earnings in certain non-U.S. subsidiaries because such earnings are indefinitely reinvested in its international operations. Upon distribution of such earnings in the form of dividends or otherwise, the Company may be subject to incremental foreign tax. It is not practicable to estimate the amount of foreign tax that might be payable. The Company paid tax es of $398, $262 and $223, respectively, in 2024, 2023 and 2022. The components of deferred taxes at December 31 were:
| 2024 |  | 2023
| Assets |  | Liabilities |  | Assets |  | Liabilities
Tax carryforwards | $ | 251 |  |  | $ | — |  |  | $ | 274 |  |  | $ | — |
Disallowed interest carryforwards | 105 |  |  | — |  |  | 54 |  |  | — |
Intangible assets | — |  |  | 260 |  |  | — |  |  | 292 |
Property, plant and equipment | 14 |  |  | 257 |  |  | 16 |  |  | 253 |
Accruals and other | 126 |  |  | 129 |  |  | 123 |  |  | 94 |
Pensions | 48 |  |  | 21 |  |  | 90 |  |  | 20 |
Asbestos | 46 |  |  | — |  |  | 50 |  |  | — |
Postretirement and postemployment benefits | 23 |  |  | — |  |  | 23 |  |  | — |
Lease liabilities | 32 |  |  | — |  |  | 32 |  |  | — |
Right of use assets | — |  |  | 30 |  |  | — |  |  | 31 |
Valuation allowances | (152) |  |  | — |  |  | (178) |  |  | — |
Total | $ | 493 |  |  | $ | 697 |  |  | $ | 484 |  |  | $ | 690 |
Tax carryforwards expire as follows:
Year |  | Amount
2025 |  | $ | 13 |
2026 |  | 12 |
2027 |  | 7 |
2028 |  | 2 |
2029 |  | 10 |
Thereafter |  | 77 |
Unlimited |  | 130 |
Tax carryforwards expiring after 2029 include $48 of U.S. state tax loss carryforwards. The unlimited category includes $76 of French tax loss carryforwards and $25 of Luxembourg tax loss carryforwards. In addition, the Company has disallowed interest in the U.S. which can be carried forward indefinitely. The Company’s valuation allowances at December 31, 2024 include $72 related to the portion of U.S. state tax loss carryforwards that the Company does not believe are more likely than not to be utilized prior to their expiration. The Company’s ability to utilize state tax loss carryforwards is impacted by several factors including taxable income, expiration dates, limitations imposed by certain states on the amount of loss carryforwards that can be used in a given year to offset taxable income and whether the state permits the Company to file a combined return. In addition, the Company's valuation allowances at December 31, 2024 includes $62 related to tax loss carryforwards in France. Management’s estimate of the appropriate valuation allowance in any jurisdiction involves a number of assumptions and judgments, including the amount and timing of future taxable income. Should future results differ from management’s estimates, it is possible there could be future adjustments to the valuation allowances that would result in an increase or decrease in tax expense in the period such changes in estimates are made. A reconciliation of unrecognized tax benefits follows:
| 2024 |  | 2023 |  | 2022
Balance at January 1 | $ | 46 |  |  | $ | 46 |  |  | $ | 48 |
Additions for prior year tax positions | 10 |  |  | 6 |  |  | 7 |
Reductions to prior period tax positions | (4) |  |  | — |  |  | — |
Lapse of statute of limitations | (4) |  |  | (4) |  |  | (1) |
Settlements | (2) |  |  | (2) |  |  | (6) |
Foreign currency translation | — |  |  | — |  |  | (2) |
Balance at December 31 | $ | 46 |  |  | $ | 46 |  |  | $ | 46 |
The Company’s unrecognized tax benefits include potential liabilities related to transfer pricing, foreign withholding taxes, and non-deductibility of expenses. The total interest and penalties recorded in income tax expense was $2 in 2024 and 2023 and less than $1 in 2022. As of December 31, 2024, unrecognized tax benefits of $46, if recognized, would affect the Company's effective tax rate. The Company’s unrecognized tax benefits are not expected to increase over the next twelve months and are expected to decrease as open tax years lapse or claims are settled. The Company is unable to estimate a range of reasonably possible changes in its unrecognized tax benefits in the next twelve months as it is unable to predict when, or if, the tax authorities will commence their audits, the time needed for the audits, and the audit findings that will require settlement with the applicable tax authorities, if any. The tax years that remained subject to examination by major tax jurisdictions as of December 31, 2024 were, 2010 and subsequent years for Germany; 2013 and subsequent years for India and Cambodia; 2015 and subsequent years for Thailand; 2016 and subsequent years for Vietnam; 2018 and subsequent years for Italy; 2019 and subsequent years for Mexico, Greece, Luxembourg and Netherlands; 2020 and subsequent years for Canada, Spain, Turkey, Brazil and Singapore; 2021 and subsequent years for the U.S., U.K. and France.; 2022 and subsequent years for Switzerland and Belgium. The U.S. also remains subject to exam for 2018, specifically as it relates to the transition tax incurred related to the 2017 Tax Act. In addition, tax authorities in certain jurisdictions, including France and the U.S., may examine earlier years when tax carryforwards that were generated in those years are subsequently utilized.

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