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Taxes on Income
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
Taxes on Income Taxes on Income
Income before taxes on income resulting from domestic and foreign operations is as follows:
(in millions)Year Ended December 31,
 202420232022
Domestic operations$3,436 $1,899 $3,426 
Foreign operations1,872 1,772 1,276 
Total income before taxes$5,308 $3,671 $4,702 
The provision for taxes on income consists of the following:
(in millions)Year Ended December 31,
 202420232022
Federal:
Current$740 $559 $928 
Deferred(131)(177)(185)
Total federal609 382 743 
Foreign:
Current472 370 322 
Deferred(161)(150)(98)
Total foreign311 220 224 
State and local:
Current252 216 265 
Deferred(31)(40)(52)
Total state and local221 176 213 
Total provision for taxes $1,141 $778 $1,180 

A reconciliation of the U.S. federal statutory income tax rate to our effective income tax rate for financial reporting purposes is as follows:
Year Ended December 31,
 202420232022
U.S. federal statutory income tax rate21.0 %21.0 %21.0 %
State and local income taxes3.5 3.5 3.9 
Foreign operations(4.7)(5.1)(2.8)
Stock-based compensation(0.3)(0.4)— 
S&P Dow Jones Indices LLC joint venture(1.1)(1.5)(1.1)
Tax credits and incentives(0.8)(2.5)(1.3)
Divestitures0.1 1.8 2.9 
Other, net3.8 4.4 2.5 
Effective income tax rate 21.5 %21.2 %25.1 %

Fluctuation in tax rates by year is primarily due to tax charge on merger related divestitures and change in mix of income by jurisdiction.

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.
The principal temporary differences between the accounting for income and expenses for financial reporting and income tax purposes are as follows: 
(in millions)December 31,
20242023
Deferred tax assets:
Accrued expenses$114 $122 
Losses and other carryforwards695 622 
Research & Development Expenditures350 258 
Other423 473 
Total deferred tax assets1,582 1,475 
Deferred tax liabilities:
Goodwill and intangible assets(4,348)(4,573)
Other(245)(212)
Total deferred tax liabilities(4,593)(4,785)
Net deferred income tax asset before valuation allowance(3,011)(3,310)
Valuation allowance(313)(316)
Net deferred income tax liability$(3,324)$(3,626)
Reported as:
Non-current deferred tax assets$73 $64 
Non-current deferred tax liabilities(3,397)(3,690)
Net deferred income tax liability$(3,324)$(3,626)

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 and other carryforwards.

As of December 31, 2024, we have approximately $8.5 billion of undistributed earnings of our foreign subsidiaries, of which $4.7 billion 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 $1,159 million in 2024, $1,279 million in 2023, and $1,555 million in 2022. As of December 31, 2024, we had net operating loss carryforwards of $1,228 million, of which a significant portion has an unlimited carryover period under current law.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
(in millions)Year ended December 31,
 202420232022
Balance at beginning of year$230 $223 $147 
Additions based on tax positions related to the current year76 21 28 
Additions for tax positions of prior years48 10 62 
Reduction for settlements(11)(11)— 
Expiration of applicable statutes of limitations(18)(13)(14)
Balance at end of year$325 $230 $223 

The total amount of federal, state and local, and foreign unrecognized tax benefits as of December 31, 2024, 2023 and 2022 was $325 million, $230 million and $223 million, respectively, exclusive of interest and penalties. During the year ended December 31, 2024, the change in unrecognized tax benefits resulted in a net increase of tax expense of $95 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 $16 million in the next twelve months as a result of the
resolution of local tax examinations and expiration of applicable statutes of limitations. In addition to the unrecognized tax benefits, we had accrued interest and penalties associated with unrecognized tax benefits of $65 million and $50 million as of December 31, 2024 and 2023, respectively.

The U.S. federal income tax audits for 2018 through 2024 are in process. During 2024, 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 2016. The impact to tax expense in 2024, 2023 and 2022 was not material.

We file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions, and we are routinely under audit by many different tax authorities. We believe that our accrual for tax liabilities is adequate for all open audit years based on an assessment of many factors including past experience and interpretations of tax law. This assessment relies on estimates and assumptions and may involve a series of complex judgments about future events. It is possible that tax examinations will be settled prior to December 31, 2025. If any of these tax audit settlements do occur within that period, we would make any necessary adjustments to the accrual for unrecognized tax benefits.

The Organization for Economic Co-operation and Development (“OECD”) introduced an international tax framework under Pillar Two which includes a global minimum tax of 15%. This framework has been implemented by several jurisdictions, including jurisdictions in which we operate, with effect from January 1, 2024, and many other jurisdictions, including jurisdictions in which we operate, are in the process of implementing it. The effect of enacted Pillar Two taxes has been included in the results disclosed and did not have a significant impact on our consolidated financial statements. The Company continues to monitor jurisdictions that are expected to implement Pillar Two in the future, and it is in the process of evaluating the potential impact of the enactment of Pillar Two by such jurisdictions on its consolidated financial statements.