Income Taxes

9 Months Ended

Sep. 30, 2024

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE G – INCOME TAXES

The following table provides a reconciliation of our reported tax rate to the rate from continuing operations:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Reported tax rate	30.0	%	17.3	%	24.4	%	26.5	%
Impact of certain receipts/charges(1)	(12.3)	%	(0.2)	%	(6.0)	%	(7.3)	%
Rate from continuing operations	17.7	%	17.1	%	18.3	%	19.2	%

(1)These receipts/charges are taxed at different rates than our rate from continuing operations.

Our reported tax rate is affected by recurring items such as the amount of our earnings subject to differing tax rates in foreign jurisdictions and the impact of certain receipts and charges that are taxed at rates that differ from our rate from continuing operations.

In the third quarter of 2024, the primary difference between the rate from continuing operations and our reported tax rate relates to certain acquisition-related net charges. In the first nine months of 2024, the primary difference between the rate from continuing operations and our reported tax rate relates to certain acquisition-related net charges, benefits for intangible asset impairment charges, and discrete tax benefits primarily related to stock-based compensation.

In the third quarter of 2023, the primary difference between the rate from continuing operations and our reported tax rate relates to litigation-related charges. In the first nine months of 2023, the primary difference between the rate from continuing operations and our reported tax rate relates to certain acquisition-related net charges, litigation-related charges and discrete tax benefits related to unrecognized tax benefits and stock-based compensation.

As of September 30, 2024, we had $493 million of gross unrecognized tax benefits, of which a net $417 million, if recognized, would affect our effective tax rate. As of December 31, 2023, we had $467 million of gross unrecognized tax benefits, of which a net $395 million, if recognized, would affect our effective tax rate. The change in gross unrecognized tax benefit is primarily related to current year accruals for reserves and audits.

It is reasonably possible that within the next 12 months, we will resolve multiple issues with foreign, federal and state taxing authorities, resulting in a reduction in our balance of unrecognized tax benefits of up to $9 million.