

(in millions)	Year Ended December 31,
	2019		2018		2017
Domestic operations	$	2,068	$	1,857	$	1,723
Foreign operations	862		824		738
Total income before taxes	$	2,930	$	2,681	$	2,461



(in millions)	Year Ended December 31,
	2019		2018			2017
Federal:
Current	$	303	$	198		$	489
Deferred	13		53			63
Total federal	316		251			552
Foreign:
Current	201		214			194
Deferred	14		(2		)	(3		)
Total foreign	215		212			191
State and local:
Current	93		84			73
Deferred	3		13			7
Total state and local	96		97			80
Total provision for taxes	$	627	$	560		$	823



	Year Ended December 31,
	2019		2018		2017
U.S. federal statutory income tax rate	21.0	%	21.0	%	35.0	%
State and local income taxes	2.6		2.8		2.5
Foreign operations	(0.3	)	0.2		(3.9	)
TCJA Transition Tax	—		(0.3	)	6.0
Stock-based compensation	(1.4	)	(1.2	)	(2.7	)
S&P Dow Jones Indices LLC joint venture	(1.2	)	(1.2	)	(1.8	)
Tax credits and incentives	(1.7	)	(1.7	)	(2.1	)
Other, net	2.4		1.3		0.4
Effective income tax rate	21.4	%	20.9	%	33.4	%

The increase in the effective income tax rate in 2019 was primarily due to an increase in accruals for potential tax liabilities for prior years in various jurisdictions. The decrease in the effective income tax rate in 2018 was primarily due to the reduction of the U.S. federal corporate tax rate as a result of the enactment of the Tax Cuts and Jobs Act (“TCJA”). Additionally, a one-time transition tax charge of $149 million due to the TCJA was recorded in 2017, which included tax expense of approximately $173 million on the deemed repatriation of foreign earnings and a tax benefit of approximately $24 million in respect of the re-valuation of the net U.S. deferred tax liabilities at the reduced corporate income tax rate.

We have elected to recognize the tax on Global Intangible Low Taxed Income (“GILTI”) as a period expense in the year the tax is incurred. GILTI expense is included in Other, net above.



(in millions)	December 31,
	2019			2018
Deferred tax assets:
Legal and regulatory settlements	$	2		$	2
Employee compensation	58			57
Accrued expenses	30			36
Postretirement benefits	27			48
Unearned revenue	28			29
Allowance for doubtful accounts	9			8
Loss carryforwards	155			155
Other	24			24
Total deferred tax assets	333			359
Deferred tax liabilities:
Goodwill and intangible assets	(318		)	(295		)
Total deferred tax liabilities	(318		)	(295		)
Net deferred income tax asset before valuation allowance	15			64
Valuation allowance	(163		)	(156		)
Net deferred income tax (liability) asset	$	(148	)	$	(92	)
Reported as:
Non-current deferred tax assets	$	52		$	52
Non-current deferred tax liabilities	(200		)	(144		)
Net deferred income tax (liability) asset	$	(148	)	$	(92	)

We record valuation allowances against deferred income tax assets when we determine that it is more likely than not that such deferred income tax assets will not be realized based upon all the available evidence. The valuation allowance is primarily related to operating losses.

As of December 31, 2019, we have approximately $3.2 billion of undistributed earnings of our foreign subsidiaries, of which $776 million is reinvested indefinitely in our foreign operations. We have not recorded deferred income taxes applicable to undistributed earnings of foreign subsidiaries that are indefinitely reinvested in foreign operations. Quantification of the deferred tax liability, if any, associated with indefinitely reinvested earnings is not practicable.

We made net income tax payments totaling $659 million in 2019, $558 million in 2018, and $709 million in 2017. As of December 31, 2019, we had net operating loss carryforwards of $689 million, of which a significant portion has an unlimited carryover period under current law.



(in millions)	Year ended December 31,
	2019			2018			2017
Balance at beginning of year	$	147		$	212		$	221
Additions based on tax positions related to the current year	21			19			23
Additions for tax positions of prior years	11			2			17
Reduction for tax positions of prior years	(15		)	(21		)	(32		)
Reduction for settlements	(33		)	(65		)	(5		)
Expiration of applicable statutes of limitations	(7		)	—			(12		)
Balance at end of year	$	124		$	147		$	212

The total amount of federal, state and local, and foreign unrecognized tax benefits as of December 31, 2019, 2018 and 2017 was $124 million, $147 million and $212 million, respectively, exclusive of interest and penalties. During the period ended December 31, 2019, the change in unrecognized tax benefits resulted in a net increase of tax expense of $10 million.

We recognize accrued interest and penalties related to unrecognized tax benefits in interest expense and operating-related expense, respectively. Based on the current status of income tax audits, we believe that the total amount of unrecognized tax benefits on the balance sheet may be reduced by up to approximately $10 million in the next twelve months as a result of the resolution of local tax examinations. In addition to the unrecognized tax benefits, as of December 31, 2019 and 2018, we had $20 million and $35 million, respectively, of accrued interest and penalties associated with unrecognized tax benefits.

The U.S. federal income tax audit for 2017 and 2018 is in process. During 2019, we completed state and foreign tax audits and, with few exceptions, we are no longer subject to federal, state, or foreign income tax examinations by tax authorities for the years before 2013. The impact to tax expense in 2019, 2018 and 2017 was not material.