Company: BKR
Filing Date: 2025-02-04
Form Type: 10-K
Source: 0001701605-25-000035
Chunk: 35

Company: Baker Hughes Co
Filing Date: 2025-02-04
Form: 10-K
Item: Item 8
Chunk 35
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 Company 2024 Form 10-K | 79

Baker Hughes CompanyNotes to Consolidated Financial Statements

At December 31, 2024, $3,908 million of valuation allowances are recorded against various deferred tax assets, primarily related to foreign operating and capital losses of $3,161 million and non-U.S. tax credit carryforwards of $401 million. The following table presents the change in the valuation allowances during the year:20242023Balance at the beginning of the year$4,416 $4,090 Release in the U.S., net of current year non-U.S. activity(625)53 Other117 273 Balance at end of year$3,908 $4,416 Indefinite reinvestment is determined by management's intentions concerning the future operations of the Company. In cases where repatriation would otherwise incur significant withholding or income taxes, these earnings have been indefinitely reinvested in the Company's active non-U.S. business operations. As of December 31, 2024, the cumulative amount of undistributed foreign earnings is approximately $4,659 million. Computation of the potential deferred tax liability associated with these undistributed earnings and any other basis differences is not practicable.At December 31, 2024, the Company had $455 million of tax liabilities for total gross unrecognized tax benefits related to uncertain tax positions. In addition to these uncertain tax positions, the Company had $81 million and $66 million related to interest and penalties, respectively, for total liabilities of $602 million for uncertain positions. If the Company were to prevail on all uncertain positions, the net effect would result in an income tax benefit of approximately $534 million. The remaining $68 million is comprised of $42 million for deferred tax assets that represent tax benefits that would be received in different taxing jurisdictions or in a different character and $26 million increased valuation allowances.The following table presents the changes in the Company's gross unrecognized tax benefits included in the consolidated statements of financial position.Asset / (Liability)20242023Balance at beginning of year$(467)$(496)Additions for tax positions of the current year(17)(15)Additions for tax positions of prior years(51)(50)Reductions for tax positions of prior years28 32 Settlements with tax authorities24 26 Lapse of statute of limitations28 36 Balance at end of year$(455)$(467)It is expected that the amount of unrecognized tax benefits will change in