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Income Taxes
 6 Months Ended
Jun. 30, 2021
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The effective tax rate was approximately (37)% and (124)% for the three and six months ended June 30, 2021, respectively. The effective tax rate was approximately (18)% and (4)% for the three and six months ended June 30, 2020, respectively. The effective tax rate for the six months ended June 30, 2021, as compared to the U.S. statutory rate of 21%, was primarily impacted by an equity adjustment on an LNG project and the enactment of a tax rate change in the United Kingdom. An equity adjustment was booked in Q2 2021 on an entity in which KBR is a JV partner. Since the tax impact for this adjustment was taxed at the JV level, KBR will not receive a tax benefit. In Q2 2021, the U.K. enacted legislation to raise the corporate tax rate from 19% to 25% beginning April 1, 2023. All deferred tax balances in this region were remeasured and the tax impact was booked accordingly. Excluding the tax impact of these adjustments, our tax rate would be 25% for the three and six months ended June 30, 2021. The three and six months ended June 30, 2020 was primarily impacted by impairment and restructuring charges incurred during the period. Excluding the tax impact of these adjustments, our tax rate would have been 27% for the three and six months ended June 30, 2020.

Our estimated annual effective rate for 2021 is 25% excluding the effects of discrete items. Our estimated annual
effective rate is subject to change based on the actual jurisdictions where our 2021 earnings are generated.

The valuation allowance for deferred tax assets as of June 30, 2021 and December 31, 2020 was $219 million and $220 million, respectively. The remaining valuation allowance is primarily related to foreign tax credit carryforwards and foreign and state net operating loss carryforwards that, in the judgment of management, are not more likely than not to be realized. The ultimate realization of deferred tax assets is dependent on the generation of future taxable income, in the appropriate character and source, during the periods in which those temporary differences become deductible or within the remaining carryforward period. Management considers the scheduled reversal of deferred tax liabilities (including the impact of available carryback and carryforward periods), projected future taxable income and tax-planning strategies in making this assessment.
The utilization of the unreserved foreign tax credit carryforwards is based on our ability to generate income from foreign sources of approximately $690 million prior to their expiration. The utilization of other net deferred tax assets, excluding those associated with indefinite-lived intangible assets, is based on our ability to generate U.S. forecasted taxable income of approximately $581 million. Changes in our forecasted taxable income, in the appropriate character and source, as well as jurisdiction, could affect the ultimate realization of deferred tax assets.
The provision for uncertain tax positions included in "Other liabilities" and "Deferred income taxes" on our condensed consolidated balance sheets as of June 30, 2021, and December 31, 2020 was