v3.20.2

Income Taxes | 6 Months Ended
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Jun. 30, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes Income Tax Expense (Benefit) The table below shows our consolidated income tax expense (benefit) and our effective tax rates for the periods indicated (in millions):
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2020 |  | 2019 |  | 2020 |  | 2019
Income tax expense (benefit) | $ | (31 | ) |  | $ | 9 |  |  | $ | 15 |  |  | $ | 19 |
Effective tax rate | (23 | )% |  | 3 | % |  | 5 | % |  | 4 | %
Our income tax rates do not bear a customary relationship to statutory income tax rates primarily as a result of the effect of our NOLs and changes in unrecognized tax benefits and valuation allowances. For the three and six months ended June 30, 2020 and 2019, the income tax expense recognized resulted from timing differences between the recognition of federal income tax expense and corresponding changes in NOLs and the valuation allowance. Income Tax Audits — We remain subject to periodic audits and reviews by taxing authorities; however, we do not expect these audits will have a material effect on our tax provision. Any NOLs we claim in future years to reduce taxable income could be subject to IRS examination regardless of when the NOLs were generated. Any adjustment of state or federal returns could result in a reduction of deferred tax assets rather than a cash payment of income taxes in tax jurisdictions where we have NOLs. We are currently under various state income tax audits for various periods. Valuation Allowance — U.S. GAAP requires that we consider all available evidence, both positive and negative, future earnings and tax planning strategies to determine whether, based on the weight of that evidence, a valuation allowance is needed to reduce the value of deferred tax assets. We have federal NOLs available to offset future income tax obligations recognized as deferred tax assets in the amount of $1.5 billion at June 30, 2020. During the second quarter of 2020, we recorded a partial valuation allowance release to the federal valuation allowance in the amount of $77 million. We recognize a valuation allowance against a subset of these NOLs given uncertainty in our ability to utilize all such NOLs. Future realization of the tax benefit of an existing deductible temporary difference or carryforward ultimately depends on the existence of sufficient taxable income of the appropriate character within the carryback or carryforward periods available under the tax law. For purposes of this evaluation, we consider both the existence of future taxable earnings as well as available tax planning strategies. To the extent that future expected sources of earnings materially changes, this could result in the reduction or increase in our valuation allowance.

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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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