Company: CNDT
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0001677703-25-000029
Chunk: 125

Company: CONDUENT Inc
Filing Date: 2025-02-19
Form: 10-K
Item: Item 8
Chunk 125
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 the undistributed earnings of its foreign subsidiaries with respect to the U.S. These foreign subsidiaries have aggregate cumulative undistributed earnings of $118 million as of December 31, 2024. For years after 2017, current tax law allows for certain earnings to be repatriated free from U.S. Federal taxes. However, the repatriation of earnings could give rise to additional tax liabilities. The Company has not provided for these liabilities. The Company has also not provided for deferred taxes on outside basis differences in its investments in its foreign subsidiaries. A determination of the unrecognized deferred taxes related to these other components of the Company's outside basis differences is not practicable. The Company has provided for deferred taxes with respect to certain unremitted earnings of foreign subsidiaries that are not indefinitely reinvested between foreign subsidiaries outside of the U.S.

CNDT 2024 Annual Report82

The tax effects of temporary differences that give rise to significant portions of the deferred taxes were as follows: December 31,(in millions)20242023Deferred Tax Assets  Net operating losses and capital loss carryforward$86 $100 Operating reserves, accruals and deferrals41 36 Deferred compensation2 2 Interest expense capitalization11 18 Settlement reserves5 4 Operating lease liabilities43 48 Tax credits10 6 Capitalized research and experimentation costs24 21 Compensation related accruals18 16 Other1 2 Subtotal241 253 Valuation allowance(95)(100)Total$146 $153 Deferred Tax LiabilitiesIntangibles and goodwill$32 $29 Depreciation48 72 Operating lease right-of-use assets38 43 Other29 18 Total$147 $162 Total Deferred Tax Assets (Liabilities), Net$(1)$(9)The deferred tax assets for the respective periods were assessed for recoverability and, where applicable, a valuation allowance was recorded to reduce the total deferred tax asset to an amount that will, more-likely-than-not, be realized in the future. The net change in the total valuation allowance for the years ended December 31, 2024 and 2023 was a decrease of $5 million and a decrease of $2 million, respectively. The valuation allowance relates primarily to certain net operating loss carryforwards, tax credit carryforwards and deductible temporary differences for which the Company has concluded it is more-likely-than-not that these items will not be realized in