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Income Taxes | 12 Months Ended
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Dec. 31, 2019
Income Tax Disclosure [Abstract] |
Income Taxes | 15. Income Taxes The domestic and foreign components of income (loss) before income taxes were as follows (in millions):
|  | Years Ended December 31, |
|  | 2019 |  |  | 2018 |  |  | 2017 |
Domestic |  | $ | (4,501 | ) |  | $ | (168 | ) |  | $ | (470 | )
Foreign |  |  | (1,961 | ) |  |  | 209 |  |  |  | 78 |
|  | $ | (6,462 | ) |  | $ | 41 |  |  | $ | (392 | )
The components of the provision for income taxes consisted of (in millions):
|  | Years Ended December 31, |
|  | 2019 |  |  | 2018 |  |  | 2017 |
Current: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  | $ | (7 | ) |  | $ | (5 | ) |  | $ | 23 |
State |  |  | 4 |  |  |  | (3 | ) |  |  | 1 |
Foreign |  |  | 60 |  |  |  | 134 |  |  |  | 161 |
Total current income tax provision |  |  | 57 |  |  |  | 126 |  |  |  | 185 |
Deferred: |  |  |  |  |  |  |  |  |  |  |  |
Federal |  |  | (344 | ) |  |  | 11 |  |  |  | (332 | )
State |  |  | (18 | ) |  |  | - |  |  |  | (2 | )
Foreign |  |  | (64 | ) |  |  | (74 | ) |  |  | (7 | )
Total deferred income tax provision |  |  | (426 | ) |  |  | (63 | ) |  |  | (341 | )
Total income tax provision |  | $ | (369 | ) |  | $ | 63 |  |  | $ | (156 | )
The difference between the effective tax rate reflected in the provision for income taxes and the U.S. federal statutory rate was as follows (in millions):
|  | Years Ended December 31, |
|  | 2019 |  |  | 2018 |  |  | 2017 |
Federal income tax at U.S. statutory rate |  | $ | (1,357 | ) |  | $ | 9 |  |  | $ | (137 | )
Foreign income tax rate differential |  |  | (40 | ) |  |  | (3 | ) |  |  | (21 | )
Goodwill impairment |  |  | 666 |  |  |  | — |  |  |  | — |
Nondeductible expenses |  |  | 61 |  |  |  | 20 |  |  |  | 38 |
Foreign dividends, net of foreign tax credits |  |  | 163 |  |  |  | 27 |  |  |  | (132 | )
Tax rate change on timing differences |  |  | 1 |  |  |  | (7 | ) |  |  | (245 | )
Change in uncertain tax positions |  |  | (60 | ) |  |  | (5 | ) |  |  | 81 |
Prior years taxes |  |  | 3 |  |  |  | (13 | ) |  |  | (26 | )
Tax impact on foreign exchange |  |  | (2 | ) |  |  | (3 | ) |  |  | 5 |
Change in deferred tax valuation allowance |  |  | 218 |  |  |  | 49 |  |  |  | 280 |
State income taxes - net of federal benefit |  |  | (16 | ) |  |  | (3 | ) |  |  | (1 | )
Tax exempt income |  |  | (6 | ) |  |  | (5 | ) |  |  | — |
Income tax credits |  |  | — |  |  |  | (3 | ) |  |  | (4 | )
Other |  |  | — |  |  |  | — |  |  |  | 6 |
Total income tax provision |  | $ | (369 | ) |  | $ | 63 |  |  | $ | (156 | )
The effective tax rate for the year ended December 31, 2019 was 5.7%, compared to 153.7% for 2018. For the year ended December 31, 2019, the effective tax rate was negatively impacted by the impairment of nondeductible goodwill and the establishment of additional valuation allowance partially offset by the reduction in uncertain tax positions due to settlements. For the year ended December 31, 2018, valuation allowances established on foreign tax credits generated during the year resulted in a higher effective tax rate than the U.S. statutory rate. Significant components of our deferred tax assets and liabilities were as follows (in millions):
|  | December 31, |
|  | 2019 |  |  | 2018 |
Deferred tax assets: |  |  |  |  |  |  |  |
Allowances and operating liabilities |  | $ | 395 |  |  | $ | 293 |
Net operating loss carryforwards |  |  | 270 |  |  |  | 182 |
Stock Compensation |  |  | 69 |  |  |  | 66 |
Tax credit carryforwards |  |  | 702 |  |  |  | 768 |
Other |  |  | 60 |  |  |  | 59 |
Valuation allowance |  |  | (1,175 | ) |  |  | (955 | )
Total deferred tax assets |  |  | 321 |  |  |  | 413 |
Deferred tax liabilities: |  |  |  |  |  |  |  |
Tax over book depreciation |  |  | 115 |  |  |  | 139 |
Capital leases |  |  | 86 |  |  |  | - |
Intangible assets |  |  | 110 |  |  |  | 688 |
Deferred income |  |  | 65 |  |  |  | 70 |
Accrued tax on unremitted earnings |  |  | 33 |  |  |  | 17 |
Other |  |  | 52 |  |  |  | 52 |
Total deferred tax liabilities |  |  | 461 |  |  |  | 966 |
Net deferred tax liability |  | $ | 140 |  |  | $ | 553 |
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in millions):
|  | 2019 |  |  | 2018 |  |  | 2017 |
Unrecognized tax benefit at beginning of year |  | $ | 98 |  |  | $ | 132 |  |  | $ | 78 |
Gross increase for current period tax positions |  |  | — |  |  |  | 15 |  |  |  | 10 |
Gross increase for tax positions in prior years |  |  | 10 |  |  |  | 31 |  |  |  | 64 |
Gross decrease for tax positions in prior years |  |  | (60 | ) |  |  | (10 | ) |  |  | (14 | )
Cash Settlements |  |  | (3 | ) |  |  | (69 | ) |  |  | — |
Lapse of statute of limitations |  |  | (7 | ) |  |  | (1 | ) |  |  | (6 | )
Unrecognized tax benefit at end of year |  | $ | 38 |  |  | $ | 98 |  |  | $ | 132 |
The balance of unrecognized tax benefits at December 31, 2019, 2018 and 2017 was $38 million, $98 million and $132 million, respectively. Resolutions of foreign jurisdiction audits resulted in a $60 million and $74 million decrease in uncertain tax provisions for the years ended December 31, 2019 and 2018, respectively. Accruals related to foreign jurisdiction audits of prior years resulted in uncertain tax position increases of $64 million in 2017. Substantially all of the unrecognized tax benefits, if ultimately realized, would be recorded as a benefit to the effective tax rate. The Company anticipates that it is reasonably possible that the amount of unrecognized tax benefits may decrease by up to $21 million in the next twelve months due to settlements and conclusions of tax examinations. To the extent penalties and interest would be assessed on any underpayment of income tax, such accrued amounts have been classified as a component of income tax expense in the financial statements consistent with the Company’s policy. For the years ended December 31, 2019, 2018 and 2017, we recorded income tax expense of nil, nil and $17 million, respectively, for interest and penalty related to unrecognized tax benefits. As of December 31, 2019 and 2018, the Company had accrued $11 million and $12 million, respectively, of interest and penalty relating to unrecognized tax benefits. The Company is subject to taxation in the United States as well as various states and foreign jurisdictions. The Company has significant operations in the United States, Norway, Canada, the United Kingdom, the Netherlands, France and Denmark. Tax years that remain subject to examination by major tax jurisdictions vary by legal entity, but are generally open in the U.S. for tax years ending after 2013 and outside the U.S. for tax years ending after 2014. Net operating loss carryforwards by jurisdiction and expiration as of December 31, 2019 were as follows (in millions):
|  | Federal |  |  | State |  |  | Foreign |  |  | Total |
2020 - 2024 Expiration |  | $ | 6 |  |  | $ | 4 |  |  | $ | 73 |  |  | $ | 83 |
2025 - 2039 Expiration |  |  | 30 |  |  |  | 150 |  |  |  | 346 |  |  |  | 526 |
Unlimited Expiration |  |  | 198 |  |  |  | — |  |  |  | 406 |  |  |  | 604 |
Total Net Operating Loss (NOL) |  | $ | 234 |  |  | $ | 154 |  |  | $ | 825 |  |  | $ | 1,213 |
Tax Effected NOL |  | $ | 49 |  |  | $ | 9 |  |  | $ | 212 |  |  |  | 270 |
Valuation Allowance (VA) |  |  | (49 | ) |  |  | (9 | ) |  |  | (211 | ) |  |  | (269 | )
Tax Effected NOL Net of VA |  | $ | — |  |  | $ | — |  |  | $ | 1 |  |  | $ | 1 |
The Company has $702 million of excess foreign tax credits in the United States as of December 31, 2019, of which $11 million, $141 million, $285 million, $142 million, $88 million and $35 million will expire in 2020, 2022, 2026, 2027, 2028 and 2029, respectively. As of December 31, 2018, the Company has remaining tax-deductible goodwill of $194 million, resulting from acquisitions. The amortization of this goodwill is deductible over various periods ranging up to 12 years. Undistributed earnings of certain of the Company’s foreign subsidiaries amounted to $757 million at December 31, 2019. These earnings are considered to be indefinitely reinvested and no provision for U.S. federal and state income taxes has been made. Distribution of these earnings in the form of dividends or otherwise could result in incremental U.S. federal and state taxes at statutory rates and withholding taxes payable in various foreign countries.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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