INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Domestic and Foreign Earnings (Loss) Before Income Taxes

Domestic and Foreign Earnings (Loss) Before Income Taxes

DOLLAR AMOUNTS IN MILLIONS
	2019			2018		2017
Domestic earnings (loss)	$	(268	)	$	556	$	643
Foreign earnings		55			251		73
Total earnings (loss) before income taxes	$	(213	)	$	807	$	716

Provision (Benefit) for Income Taxes

Provision (Benefit) for Income Taxes

DOLLAR AMOUNTS IN MILLIONS
	2019			2018			2017
Current:
Federal	$	21		$	(69	)	$	10
State		1			(5	)		—
Foreign		10			61			82
Total current		32			(13	)		92
Deferred:
Federal		(137	)		45			61
State		(31	)		12			(18	)
Foreign		(1	)		15			(1	)
Total deferred		(169	)		72			42
Total income tax provision (benefit)	$	(137	)	$	59		$	134

Effective Income Tax Rate Applicable

Effective Income Tax Rate

DOLLAR AMOUNTS IN MILLIONS
	2019			2018			2017
U.S. federal statutory income tax	$	(45	)	$	170		$	250
State income taxes, net of federal tax benefit		(31	)		8			(2	)
REIT income not subject to federal income tax		(68	)		(116	)		(198	)
SDT settlement(1)		—			21			—
Tax effect of U.S. corporate rate change(2)		—			—			74
Voluntary pension contribution(3)		—			(41	)		—
Return to provision adjustment		4			(1	)		2
Foreign taxes		(2	)		15			54
Repatriation of Canadian earnings		—			—			(22	)
Other, net		5			3			(24	)
Total income tax provision (benefit)	$	(137	)	$	59		$	134
Effective income tax rate	64.1%			7.3%			18.8%

(1) In fourth quarter 2018, we recorded tax expense of $21 million related to the settlement of a dispute with the IRS. Refer to “Resolution of IRS Matter” below for further information.

(2) In December 2017, H.R. 1 (the Tax Act) was enacted. The Tax Act contained significant changes to corporate taxation, including a reduction in the corporate tax rate from 35 percent to 21 percent. As a result of this change, we revalued our deferred tax assets and liabilities and recorded tax expense of $74 million during 2017, which reduced our net deferred tax asset.

(3) At the end of 2017, we revalued our deferred tax assets and liabilities to the 21 percent federal tax rate prescribed by the Tax Act. During 2018, we made a voluntary contribution of $300 million to our U.S. qualified pension plan. We deducted this contribution on our 2017 U.S. federal tax return at the 2017 federal tax rate of 35 percent. This resulted in an incremental $41 million tax benefit for the portion attributable to our TRSs. Refer to Note 9: Pension and Other Postretirement Benefit Plans for further information on the voluntary contribution.

Balance Sheet Classification of Deferred Income Tax Assets (Liabilities)

Balance Sheet Classification of Deferred Income Tax Assets (Liabilities)

DOLLAR AMOUNTS IN MILLIONS
	DECEMBER 31, 2019			DECEMBER 31, 2018
Net noncurrent deferred tax asset	$	72		$	15
Net noncurrent deferred tax liability		(6	)		(43	)
Net deferred tax asset (liability)	$	66		$	(28	)

Items Included in Our Deferred Income Tax Assets (Liabilities)

Items Included in Our Deferred Income Tax Assets (Liabilities)

DOLLAR AMOUNTS IN MILLIONS
	DECEMBER 31, 2019			DECEMBER 31, 2018
Deferred tax assets:
Pension and postretirement benefits	$	159		$	112
State tax credits		53			51
Depletion		34			41
Excess interest		55			30
Incentive compensation		17			20
Workers compensation		18			18
Net operating loss carryforwards		28			19
Other		101			96
Gross deferred tax assets		465			387
Valuation allowance		(64	)		(61	)
Net deferred tax assets		401			326
Deferred tax liabilities:
Property, plant and equipment		(224	)		(197	)
Timber installment notes		(74	)		(116	)
Other		(37	)		(41	)
Net deferred tax liabilities		(335	)		(354	)
Net deferred tax asset (liability)	$	66		$	(28	)