Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

The components of income tax expense for 2019, 2018 and 2017, are as follows:

(in millions)	2019			2018			2017
Current income tax expense:
Federal	$	735		$	605		$	1,166
State and local		109			97			36
Foreign		400			600			289
Total net current income tax expense		1,244			1,302			1,491
Deferred income tax expense (benefit):
Federal		15			(71	)		(1,382	)
State and local		7			(1	)		81
Foreign		(5	)		(154	)		80
Total net deferred income tax expense (benefit)		17			(226	)		(1,221	)
Total income tax expense	$	1,261		$	1,076		$	270

Components of Income before Taxes, Less Net Income (Loss) Attributable to Noncontrolling Interests

Income tax expense has been based on the following components of income before taxes, less net income (loss) attributable to NCI:

(in millions)	2019		2018		2017
Domestic	$	3,766	$	3,536	$	3,280
Foreign		1,971		1,845		1,942
Total	$	5,737	$	5,381	$	5,222

Reconciliation of Income Tax Expense with Expected Federal Income Tax Expense

A reconciliation of income tax expense with expected federal income tax expense computed at the applicable federal income tax rate of 21% for 2019 and 2018 and 35% for 2017 is as follows:

(in millions)	2019					2018					2017
Statutory income tax expense	$	1,205		21	%	$	1,130		21	%	$	1,834		35	%
Increase (decrease) in income taxes resulting from:
State and local taxes (net of federal benefit)		96		2			99		2			60		1
Impact of federal, foreign, state, and local tax rate changes on deferred taxes		5		—			0		—			(1,637	)	(31	)
Mandatory deemed repatriation tax		—		—			0		—			477		9
Stock-based compensation awards		(23	)	—			(64	)	(1	)		(159	)	(3	)
Effect of foreign tax rates		(76	)	(1	)		(119	)	(2	)		(337	)	(6	)
Other		54		—			30		—			32		—
Income tax expense	$	1,261		22	%	$	1,076		20	%	$	270		5	%

Components of Deferred Income Tax Assets and Liabilities

The components of deferred income tax assets and liabilities are shown below:

	December 31,
(in millions)	2019			2018
Deferred income tax assets:
Compensation and benefits	$	282		$	267
Loss carryforwards		84			82
Other		481			362
Gross deferred tax assets		847			711
Less: deferred tax valuation allowances		(51	)		(68	)
Deferred tax assets net of valuation allowances		796			643
Deferred income tax liabilities:
Goodwill and acquired indefinite-lived intangibles		3,971			3,939
Acquired finite-lived intangibles		179			48
Unrealized investment gains		63			30
Other		142			34
Gross deferred tax liabilities		4,355			4,051
Net deferred tax (liabilities)	$	(3,559	)	$	(3,408	)

Reconciliation of Gross Unrecognized Tax Benefits

The following tabular reconciliation presents the total amounts of gross unrecognized tax benefits:

(in millions)	2019			2018			2017
Balance at January 1	$	795		$	629		$	410
Additions for tax positions of prior years		99			82			161
Reductions for tax positions of prior years		(27	)		(15	)		(3	)
Additions based on tax positions related to current year		47			102			67
Lapse of statute of limitations		(4	)		(3	)		(6	)
Settlements		(10	)		—			—
Balance at December 31	$	900		$	795		$	629