Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Components of Income Before Income Taxes and Equity in Earnings (Losses) of Unconsolidated Affiliates

The components of income before income taxes and equity in earnings (losses) of unconsolidated affiliates are as follows (in millions):

	Year Ended December 31,
	2017			2016			2015
Domestic	$	(495	)	$	(85	)	$	68
Foreign		826			564			471
	$	331		$	479		$	539

Components of Income Tax Expense Attributable to Continuing Operations

The components of income tax expense attributable to continuing operations are as follows (in millions):

	Year Ended December 31,
	2017			2016			2015
Current expense:
Federal and state	$	(3	)	$	64		$	51
Foreign		222			129			109
		219			193			160
Deferred (benefit) expense:
Federal and state		(1,165	)		166			5
Foreign		(41	)		(14	)		(6	)
		(1,206	)		152			(1	)
	$	(987	)	$	345		$	159

As a result of the Tax Act, the Company recorded a provisional deferred tax benefit of $977 million related to the revaluation of deferred taxes at the newly enacted 21% rate and reversal of the deferred tax liability on undistributed earnings net of the newly enacted transition tax.

IQVIA HOLDINGS INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements - Continued

Effective Income Tax Rate Reconciliation

The differences between the Company’s consolidated income tax expense attributable to continuing operations and the expense computed at the 35% United States statutory income tax rate were as follows (in millions):

	Year Ended December 31,
	2017			2016			2015
Federal income tax expense at statutory rate	$	116		$	167		$	189
State and local income taxes, net of federal effect		(13	)		—			2
Research and development		(9	)		(11	)		(13	)
Foreign nontaxable interest income		(7	)		(8	)		(9	)
United States taxes recorded on foreign earnings		6			252			38
Tax contingencies		17			2			(8	)
Foreign rate differential		(95	)		(60	)		(49	)
Equity compensation		(19	)		—			—
Provisional Tax Act impact		(977	)		—			—
Other		(6	)		3			9
	$	(987	)	$	345		$	159

Income Tax Effects of Temporary Differences from Continuing Operations that Give Rise to Significant Portions of Deferred Income Tax Assets (Liabilities)

The income tax effects of temporary differences from continuing operations that give rise to significant portions of deferred income tax assets (liabilities) are presented below (in millions):

	December 31,
	2017			2016
Deferred income tax assets:
Net operating loss and capital loss carryforwards	$	278		$	242
Tax credit carryforwards		170			267
Accrued expenses and unearned income		46			75
Employee benefits		189			273
Other		82			32
		765			889
Valuation allowance for deferred income tax assets		(200	)		(153	)
Total deferred income tax assets		565			736
Deferred income tax liabilities:
Undistributed foreign earnings		(21	)		(590	)
Amortization and depreciation		(1,334	)		(2,026	)
Other		(30	)		(164	)
Total deferred income tax liabilities		(1,385	)		(2,780	)
Net deferred income tax liabilities	$	(820	)	$	(2,044	)

Reconciliation of Beginning and Ending Amount of Gross Unrecognized Income Tax Benefits

A reconciliation of the beginning and ending amount of gross unrecognized income tax benefits is presented below (in millions):

	Year Ended December 31,
	2017			2016			2015
Balance at January 1	$	64		$	30		$	41
IMS Health balance as of Merger		—			37			—
Additions based on tax positions related to the current year		11			3			2
Additions for income tax positions of prior years		13			7			9
Impact of changes in exchange rates		4			(3	)		(1	)
Settlements with tax authorities		(2	)		—			—
Reductions for income tax positions of prior years		(2	)		(1	)		(2	)
Reductions due to the lapse of the applicable statute of limitations		(6	)		(9	)		(19	)
Balance at December 31	$	82		$	64		$	30

Summary of Tax Years Open for Examination

The Company conducts business globally and, as a result, files income tax returns in the United States federal jurisdiction and various state and foreign jurisdictions. In the normal course of business, the Company is subject to examination by taxing authorities throughout the world. The following table summarizes the tax years that remain open for examination by tax authorities in the most significant jurisdictions in which the Company operates:

United States	2014-2016
India	2006-2017
Japan	2012-2016
United Kingdom	2016
Switzerland	2013-2016