Income taxes

12 Months Ended

Dec. 31, 2024

Income Tax Disclosure [Abstract]

Income taxes

15. Income taxes

The summary of the Income from continuing operations before income tax expense for the years ended December 31 was:

in $ millions	2024	2023	2022
Income
U.S.	3,069	2,729	2,225
Non-U.S.	1,645	1,285	1,236
Total income	4,714	4,014	3,461

The summary of the Income tax expense from continuing operations for the years ended December 31 was:

in $ millions	2024	2023	2022
Current tax:
U.S. - Federal	466	632	443
U.S. - State	84	67	87
Non-U.S.	355	290	221
Total current tax expense	905	989	751
Deferred tax:
U.S. - Federal	187	(28)	11
U.S. - State	(5)	(12)	(6)
Non-U.S.	(2)	(24)	6
Total deferred tax expense (benefit)	180	(64)	11
Total income tax expense	1,085	925	762

Due to the percentage of global operations subject to tax in the United States, the Company uses the U.S. Federal statutory tax rate in the reconciliation of the effective income tax rate. The reconciliation of the applicable U.S. Federal income tax rate to the effective income tax rates was:

in $ millions	2024		2023		2022
U.S. statutory rate	990		843		727
State tax, net of federal tax benefit	47		38		73
Tax rate differentials	27		(11)		(6)
Uncertain tax positions	62		87		60
Tax credits	(127)		(125)		(96)
Non-deductible goodwill impairment	10		75		–
Non-taxable divestiture of the European Lime operations	(65)		–		–
Other	141		18		4
Total tax expense	1,085		925		762
Effective income tax rate	23	%	23	%	22	%

The significant components of the deferred tax assets and liabilities at December 31 were:

in $ millions	2024	2023
Deferred tax assets:
Company retirement benefit plans	2	38
Revaluation of derivative financial instruments to fair value	4	2
Tax losses, credits and interest deduction carryforwards	1,149	1,052
Share-based compensation	39	41
Accrued expenses	454	420
Lease liabilities	286	292
Total deferred tax assets	1,934	1,845
Less: valuation allowances	(1,059)	(914)
Total deferred tax assets after valuation allowances	875	931
Deferred tax liabilities:
Investment in subsidiaries	146	155
Depreciation, depletion and amortization	3,419	3,109
Leased right-of-use assets	278	274
Rolled-over capital gains	21	21
Other	15	12
Total deferred tax liabilities	3,879	3,571
Total net deferred tax liabilities	3,004	2,640

The net deferred tax assets and liabilities that are included in the Consolidated Balance Sheets at December 31 were:

in $ millions	2024	2023
Deferred income taxes, noncurrent assets	(101)	(98)
Deferred income taxes, noncurrent liabilities	3,105	2,738
Total net deferred tax liabilities	3,004	2,640

At December 31, 2024, the Company had gross loss carryforwards of $1,087 million related to foreign operations and $37 million of state net operating loss carryforwards. $390 million of certain foreign and state loss carryforwards have various expiration dates ranging from 2025 to 2050; $734 million do not expire based on current tax legislation. The Company had gross interest deduction carryforwards of $2,603 million related to foreign operations. $88 million of certain interest carryforwards have various expiration dates ranging from 2025 to 2045, $2,515 million do not expire based on current tax legislation.

The summary of the change in valuation allowance at December 31 was:

in $ millions	2024	2023	2022
Balance at January 1	914	737	578
Acquisitions	12	–	–
Provision for income taxes	188	151	203
Foreign currency and other	(55)	26	(44)
Balance at December 31	1,059	914	737

The Company maintains a valuation allowance on net operating losses and other deferred tax assets if, based on the weight of available evidence, it is more likely than not that some portion, or all, of a deferred tax asset will not be realized. At December 31, 2024, and December 31, 2023, the Company has a valuation allowance on net deferred tax assets of $1,059 million and $914 million, respectively. For the year ended December 31, 2024, the valuation allowance increased due to an increase in interest deduction carryforwards.

A deferred tax liability has been recognized in respect of any undistributed earnings in which the Company is not permanently reinvested. The Company has $18.6 billion of undistributed earnings that are considered permanently reinvested at December 31, 2024, for which no deferred tax liabilities have been recognized. It is not practicable to estimate the amount of tax that would be paid if there was a distribution of these earnings. Participation exemptions and tax credits are available in the majority of jurisdictions in which the Company operates.

The reconciliation of the changes in the unrecognized tax benefits at December 31 was:

in $ millions	2024	2023	2022
Balance at January 1	665	576	547
Increases related to prior periods	–	9	4
Decreases related to prior periods	(50)	(12)	(8)
Increases related to current period	99	148	130
Decreases related to settlements with taxing authorities and lapse of statute of limitations	(65)	(68)	(67)
Foreign currency and other	(15)	12	(30)
Balance at December 31	634	665	576

The Company files income tax returns in Ireland, the United States, the United Kingdom, Germany, Canada, and other various foreign jurisdictions and is subject to ongoing examination by tax authorities throughout the world. In general, the Company is no longer subject to significant income tax examinations by tax authorities in the jurisdictions noted for years before 2016. The Company believes that its income tax reserves are adequately maintained taking into consideration both the technical merits of its tax return positions and ongoing developments in its income tax audits. However, the final determination of the Company's tax return positions, if audited, is uncertain and therefore there is a possibility that the outcomes of such events could cause the Company’s estimate to change in the future. No single position is expected to generate a significant increase or decrease to the liability for unrecognized tax benefits within 12 months of the reporting date. At December 31, 2024, and December 31, 2023, the unrecognized tax benefits that, if recognized, would impact the effective tax rate were $589 million and $627 million, respectively.

The Company’s policy is to accrue interest and penalties related to potential underpayment of income taxes within the provision for income taxes. At December 31, 2024, and December 31, 2023, the Company had accrued interest of $101 million and $84 million, respectively. At December 31, 2024, December 31, 2023, and December 31, 2022, the interest and penalties included in Income tax expense was $20 million, $14 million, and $5 million, respectively.