Income Taxes

3 Months Ended

Mar. 31, 2025

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 3 — INCOME TAXES

Our provisions for income taxes for the quarters ended March 31, 2025 and 2024 were $502 million and $445 million, respectively, and the effective tax rate was 23.8% and 21.8%, respectively. The increase in the effective tax rate for the quarter ended March 31, 2025 is related primarily to a reduction in the amount of deductible share-based compensation for vested employee equity awards. Our provisions for income taxes included tax benefits related to settlements of employee equity awards of $24 million and $69 million for the quarters ended March 31, 2025 and 2024, respectively.

Our gross unrecognized tax benefits were $512 million, excluding accrued interest of $126 million, as of March 31, 2025 ($504 million and $115 million, respectively, as of December 31, 2024). Unrecognized tax benefits of $308 million ($295 million as of December 31, 2024) would affect the effective rate, if recognized.

At March 31, 2025, the Internal Revenue Service (“IRS”) was examining the Company’s 2022 and 2023 income tax returns and the 2019 income tax returns of certain affiliates. We are subject to examination by the IRS for tax years after 2020, 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.