Income Taxes

9 Months Ended

Sep. 30, 2024

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 3 — INCOME TAXES

Our provisions for income taxes for the quarters ended September 30, 2024 and 2023 were $424 million and $355 million, respectively, and the effective tax rates were 25.0% and 24.8%, respectively. Our provisions for income taxes for the nine months ended September 30, 2024 and 2023 were $1.419 billion and $1.131 billion, respectively, and the effective tax rates were 24.7% and 23.7%, respectively. The increase in the effective tax rate for the nine months ended September 30, 2024 is related primarily to adjustments to our liability for unrecognized tax benefits. Our provisions for income taxes included tax benefits related to settlements of employee equity awards of $93 million and $89 million for the nine months ended September 30, 2024 and 2023, respectively.

Our gross unrecognized tax benefits were $720 million, excluding accrued interest and penalties of $261 million, as of September 30, 2024 ($639 million and $177 million, respectively, as of December 31, 2023). Unrecognized tax benefits of $465 million ($320 million as of December 31, 2023) would affect the effective tax rate, if recognized.

At September 30, 2024, the Internal Revenue Service (“IRS”) was conducting examinations of the Company’s 2016, 2017 and 2018 federal income tax returns and the 2019 returns of certain affiliates. We are also subject to examination by the IRS for tax years after 2019 as well as by state and foreign taxing authorities. Depending on the resolution of any federal, state and foreign tax disputes, the completion of examinations by federal, state or foreign taxing authorities, or the expiration of statutes of limitation for specific taxing jurisdictions, we believe it is reasonably possible that our liability for unrecognized tax benefits may significantly increase or decrease within the next 12 months. However, we are currently unable to estimate the range of any possible change.