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Income Taxes | 12 Months Ended
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Dec. 31, 2021
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Our income tax (benefit) expense consisted of the following for the years ended December 31 (in millions):
|  | 2021 |  | 2020 |  | 2019
Deferred: |  |  |  |  |  |
Federal |  | $ | (44) |  |  | $ | (247) |  |  | $ | 119 |
State |  | (44) |  |  | (82) |  |  | 20 |
Deferred income tax (benefit) expense |  | (88) |  |  | (329) |  |  | 139 |
Current: |  |  |  |  |  |
Federal |  | 3 |  |  | (199) |  |  | 36 |
State |  | 5 |  |  | (9) |  |  | 19 |
Foreign |  | (1) |  |  | (2) |  |  | 5 |
Current income tax expense (benefit) |  | 7 |  |  | (210) |  |  | 60 |
Total income tax (benefit) expense |  | $ | (81) |  |  | $ | (539) |  |  | $ | 199 |
On March 27, 2020, the CARES Act was enacted in response to the COVID-19 pandemic. The CARES Act permits net operating loss (NOL) carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021. In addition, the CARES Act allows NOLs incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid incomes taxes. As of December 31, 2021, the Company has filed its Application for Tentative Refund. Income tax (benefit) expense reconciles to the amount computed by applying the U.S. federal statutory income tax rate to (loss) income before income taxes for the years ended December 31 as follows (in millions):
|  | 2021 |  | 2020 |  | 2019
Income tax (benefit) expense at statutory rate |  | $ | (55) |  |  | $ | (398) |  |  | $ | 161 |
State income tax, net of federal benefit |  | (36) |  |  | (71) |  |  | 31 |
Nondeductible expenses |  | 5 |  |  | 5 |  |  | 8 |
Net operating loss carryback |  | — |  |  | (73) |  |  | — |
Foreign tax credit re-characterization |  | — |  |  | (13) |  |  | — |
Foreign rate differential |  | (5) |  |  | 2 |  |  | (3) |
Valuation allowance |  | 4 |  |  | 10 |  |  | — |
Unrecognized tax benefit |  | 7 |  |  | (3) |  |  | — |
Other, net |  | (1) |  |  | 2 |  |  | 2 |
Total income tax (benefit) expense |  | $ | (81) |  |  | $ | (539) |  |  | $ | 199 |
The components of our deferred tax assets and liabilities as of December 31 are as follows (in millions):
|  | 2021 |  | 2020
Deferred tax assets: |  |  |  |
Deferred revenue/gains |  | $ | 301 |  |  | $ | 161 |
Employee benefits |  | 70 |  |  | 71 |
Foreign tax credit |  | 83 |  |  | 77 |
Other |  | 4 |  |  | 4 |
Net operating loss carryforward |  | 522 |  |  | 335 |
Operating lease liabilities |  | 189 |  |  | 204 |
Rent expense |  | 108 |  |  | 120 |
Total deferred tax assets |  | 1,277 |  |  | 972 |
Valuation allowance |  | (73) |  |  | (69) |
Deferred tax assets, net |  | 1,204 |  |  | 903 |
Deferred tax liabilities: |  |  |  |
Accelerated depreciation |  | (1,845) |  |  | (1,625) |
Operating lease assets |  | (182) |  |  | (197) |
Other |  | (20) |  |  | (3) |
Total deferred tax liabilities |  | (2,047) |  |  | (1,825) |
Net deferred tax liability |  | $ | (843) |  |  | $ | (922) |
We have a U.S. foreign tax credit carryfor ward of $83 million which expires from 2022 to 2031. In evaluating the realizability of the deferred tax assets, we assess whether it is more likely than not that some portion, or all, of the deferred tax assets, will be realized. We consider, among other things, the generation of future taxable income (including reversals of deferred tax liabilities) during the periods in which the related temporary differences will become deductible. At December 31, 2021, we provided a $73 million valuation allowance to reduce the deferred tax assets to an amount that we consider is more likely than not to be realized. Of the total valuation allowance, $66 million relates to foreign NOL carryforward, and $7 million relates to U.S. foreign tax credit carryforward that begins to expire in 2022. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in millions):
|  | 2021 |  | 2020 |  | 2019
Unrecognized tax benefits at January 1, |  | $ | 32 |  |  | $ | 36 |  |  | $ | 33 |
Increases for tax positions taken during the period |  | 2 |  |  | 1 |  |  | 6 |
Decreases for tax positions taken during the period |  | (1) |  |  | — |  |  | — |
Increases for tax positions taken during a prior period |  | 19 |  |  | — |  |  | — |
Decreases for tax positions taken during a prior period |  | (12) |  |  | (5) |  |  | (3) |
Unrecognized tax benefits December 31, |  | $ | 40 |  |  | $ | 32 |  |  | $ | 36 |
Interest and penalties accrued on unrecognized tax benefits were not significant. If recognized, $10 million of the unrecognized tax benefits as of December 31, 2021 would impact our effective tax rate. We do not expect any significant change in the amount of the unrecognized tax benefits within the next twelve months. As a result of net operating losses and statute of limitations in our major tax jurisdictions, years 2016 through 2020 remain subject to examination by the relevant tax authorities.

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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://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
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