XML 34 R16.htm IDEA: XBRL DOCUMENT
v3.25.0.1

INCOME TAXES | 12 Months Ended
--- | ---
Dec. 31, 2024
Income Tax Disclosure [Abstract] |
INCOME TAXES | 8. INCOME TAXES For the years ended December 31, income (loss) from continuing operations before income taxes consisted of the following:
In millions |  | 2024 |  | 2023 |  | 2022
Income (loss) before income taxes |  |  |  |  |  |
United States |  | $ | (249) |  |  | $ | (451) |  |  | $ | (351) |
Foreign |  | 50 |  |  | (94) |  |  | 34 |
Total income (loss) from continuing operations before income taxes |  | $ | (199) |  |  | $ | (545) |  |  | $ | (317) |
For the years ended December 31, income tax expense (benefit) consisted of the following:
In millions |  | 2024 |  | 2023 |  | 2022
Income tax expense (benefit) |  |  |  |  |  |
Current |  |  |  |  |  |
Federal |  | $ | (9) |  |  | $ | 26 |  |  | $ | 1 |
State |  | 2 |  |  | — |  |  | 2 |
Foreign |  | 26 |  |  | 31 |  |  | 25 |
Deferred |  |  |  |  |  |
Federal |  | (19) |  |  | (48) |  |  | (17) |
State |  | 1 |  |  | (3) |  |  | 1 |
Foreign |  | 3 |  |  | 178 |  |  | 40 |
Total income tax expense (benefit) |  | $ | 4 |  |  | $ | 184 |  |  | $ | 52 |
The following table presents the principal components of the difference between the effective tax rate and the U.S. federal statutory income tax rate for the years ended December 31:
In millions |  | 2024 |  | 2023 |  | 2022
Income tax (benefit) expense at the U.S. federal tax rate of 21% |  | $ | (42) |  |  | $ | (114) |  |  | $ | (67) |
Foreign income tax differential |  | 8 |  |  | 1 |  |  | (4) |
Additional U.S. tax on foreign income |  | (6) |  |  | 14 |  |  | (2) |
State and local income taxes (net of federal effect) |  | 2 |  |  | (3) |  |  | 2 |
Other U.S. permanent book/tax differences |  | 1 |  |  | 4 |  |  | 4 |
Meals and entertainment expense |  | 1 |  |  | 2 |  |  | 1 |
Cash surrender value received as income |  | 4 |  |  | — |  |  | — |
Nondeductible transaction costs |  | — |  |  | 2 |  |  | 1 |
Nondeductible executive compensation |  | (1) |  |  | 17 |  |  | 9 |
Dispositions |  | — |  |  | 16 |  |  | — |
Spin-off of NCR Atleos |  | — |  |  | 226 |  |  | — |
Gains/losses on internal entity restructuring |  | (4) |  |  | — |  |  | — |
Excess (benefit)/deficit from share-based payments |  | 8 |  |  | 2 |  |  | — |
Research and development tax credits |  | (3) |  |  | (2) |  |  | (5) |
Foreign tax law changes |  | (7) |  |  | (8) |  |  | 3 |
Valuation allowances |  | 57 |  |  | 31 |  |  | 117 |
Change in liability for unrecognized tax benefits |  | (9) |  |  | 3 |  |  | (15) |
Change in tax estimates for prior periods |  | (6) |  |  | (5) |  |  | 4 |
Other, net |  | 1 |  |  | (2) |  |  | 4 |
Total income tax (benefit) expense |  | $ | 4 |  |  | $ | 184 |  |  | $ | 52 |
The Company’s tax provisions include a provision for income taxes in certain tax jurisdictions where its subsidiaries are profitable, but reflect only a portion of the tax benefits related to certain foreign subsidiaries’ tax losses due to the uncertainty of the ultimate realization of future benefits from these losses. During 2024, our tax rate was impacted by a $57 million expense from recording a valuation allowance against deferred tax assets. During 2023, our tax rate was impacted by a net $226 million expense related to the Spin-Off of NCR Atleos. Also during 2023, our tax rate was impacted by a $31 million expense from recording a valuation allowance against deferred tax assets and a $17 million expense from nondeductible executive compensation. During 2022, our tax rate was impacted by a $117 million expense from recording a valuation allowance against deferred tax assets in the United Kingdom and other jurisdictions. As described in Note 1, “Basis of Presentation and Significant Accounting Policies”, on October 16, 2023, in connection with the Spin-Off, the Company completed a series of legal entity restructurings including both an internal and external spin-off transaction. These transactions are subject to tax laws in the U.S. and non-U.S. jurisdictions, which resulted in the use of significant judgments by management as it pertains to the interpretation and application of tax laws in the U.S. and non-U.S. jurisdictions to determine the potential taxability of the transactions. The Company did not provide additional U.S. income tax or foreign withholding taxes, if any, on approximately $295 million of undistributed earnings of its foreign subsidiaries, given the intention continues to be that those earnings are reinvested indefinitely. The amount of unrecognized deferred tax liability associated with these indefinitely reinvested earnings is approximately $32 million. The unrecognized deferred tax liability is made up of a combination of U.S. and state income taxes and foreign withholding taxes. We regularly review our deferred tax assets for recoverability and establish a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. The determination as to whether a deferred tax asset will be realized is made on a jurisdictional basis and is based on the evaluation of positive and negative evidence. This evidence includes historical taxable income/loss, projected future taxable income, the expected timing of the reversal of existing temporary differences and the implementation of tax planning strategies. Deferred income tax assets and liabilities included in the Consolidated Balance Sheets as of December 31 were as follows:
In millions |  | 2024 |  | 2023
Deferred income tax assets |  |  |  |
Employee pensions and other benefits |  | $ | 15 |  |  | $ | 7 |
Other balance sheet reserves and allowances |  | 104 |  |  | 197 |
Tax loss and credit carryforwards |  | 156 |  |  | 248 |
Capitalized research and development |  | 78 |  |  | 51 |
Property, plant and equipment |  | 1 |  |  | 17 |
Lease liabilities |  | 54 |  |  | 56 |
Capitalized software |  | 50 |  |  | 15 |
Other |  | 16 |  |  | 26 |
Total deferred income tax assets |  | $ | 474 |  |  | $ | 617 |
Valuation allowance |  | (153) |  |  | (211) |
Net deferred income tax assets |  | $ | 321 |  |  | $ | 406 |
Deferred income tax liabilities |  |  |  |
Intangibles |  | $ | 82 |  |  | $ | 119 |
Right of use assets |  | 57 |  |  | 57 |
Capitalized software |  | — |  |  | — |
Total deferred income tax liabilities |  | $ | 139 |  |  | $ | 176 |
Total net deferred income tax assets |  | $ | 182 |  |  | $ | 230 |
The Company has previously recorded valuation allowances related to certain deferred tax assets due to the uncertainty of the ultimate realization of the future benefits from those assets. The recorded valuation allowances cover deferred tax assets, including tax loss carryforwards, interest expense carryforwards, and foreign tax credits in tax jurisdictions where there is uncertainty as to the ultimate realization of those tax assets. If we are unable to generate sufficient future taxable income of the proper source in the time period within which the temporary differences underlying our deferred tax assets become deductible, or before the expiration of our loss and credit carryforwards, additional valuation allowances could be required. As of December 31, 2024, the Company had U.S. federal, U.S. state (tax effected), and foreign tax attribute carryforwards of approximately $571 million. The net operating loss carryforwards that are subject to expiration will expire in the years 2025 through 2044. The attributes include U.S. tax credit carryforwards of $27 million, which expire in the years 2028 through 2034. The Company’s current tax liability was $336 million and $31 million as of December 31, 2024 and December 31, 2023, respectively, presented within Other current liabilities on the Consolidated Balance Sheets. The increase in the expected current tax liability relates to taxes for the Digital Banking Sale which is expected to be paid within the next 12 months. The aggregate changes in the balance of our gross unrecognized tax benefits were as follows for the years ended December 31:
In millions |  | 2024 |  | 2023 |  | 2022
Gross unrecognized tax benefits - January 1 |  | $ | 58 |  |  | $ | 87 |  |  | $ | 121 |
Increases related to tax positions from prior years |  | 1 |  |  | 1 |  |  | 3 |
Decreases related to tax positions from prior years |  | (5) |  |  | (1) |  |  | (15) |
Increases related to tax provisions taken during the current year |  | 1 |  |  | 2 |  |  | 7 |
Settlements with tax authorities |  | (4) |  |  | — |  |  | (22) |
Lapses of statutes of limitation |  | (5) |  |  | (1) |  |  | (7) |
Distributions to NCR Atleos |  | — |  |  | (30) |  |  | — |
Total gross unrecognized tax benefits - December 31 |  | $ | 46 |  |  | $ | 58 |  |  | $ | 87 |
Of the total amount of gross unrecognized tax benefits as of December 31, 2024, $42 million would affect the Company’s effective tax rate if realized. The Company’s liability arising from uncertain tax positions is recorded in Income tax accruals and Other current liabilities in the Consolidated Balance Sheets. We recognized interest and penalties associated with uncertain tax positions as part of the provision for income taxes in our Consolidated Statements of Operations of zero, $4 million of expense, and $1 million of benefit for the years ended December 31, 2024, 2023, and 2022, respectively. The gross amount of interest and penalties accrued as of December 31, 2024 and 2023 was $16 million and $18 million, respectively. In the United States, the Company files consolidated federal and state income tax returns, with statutes of limitations generally ranging from three to five years. In 2022, the IRS commenced an examination of our 2019 income tax return, which concluded during the third quarter of 2024 with no changes made to our reported tax. U.S. federal tax years remain open from 2020 forward. Years beginning on or after 2010 are still open to examination by certain foreign taxing authorities. The Company engages in discussions and negotiations with taxing authorities regarding tax matters, and the Company has determined that over the next 12 months it expects to resolve certain tax matters related to U.S. and foreign jurisdictions. As a result, as of December 31, 2024, we estimate that it is reasonably possible that unrecognized tax benefits may decrease by $11 million to $14 million in the next 12 months.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income tax. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12 Reference 2: http://www.xbrl.org/2003/role/exampleRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 231 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482663/740-10-55-231 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12C -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12C Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 12B -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-12B Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 270 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Publisher FASB -URI https://asc.fasb.org/1943274/2147477891/740-270-50-1 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SAB Topic 6.I.5.Q1) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479360/740-10-S99-1 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 946 -SubTopic 20 -Name Accounting Standards Codification -Section 50 -Paragraph 13 -Publisher FASB -URI https://asc.fasb.org/1943274/2147480990/946-20-50-13 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 235 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480678/235-10-S99-1 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/740/tableOfContent Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 14 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-14 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-21 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 17 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482685/740-10-50-17 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 10 -Name Accounting Standards Codification -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -Publisher FASB -URI https://asc.fasb.org/1943274/2147479360/740-10-S99-2 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 740 -SubTopic 30 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482603/740-30-50-2 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration