Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income tax benefit (expense) was as follows for the years ended December 31:



(Millions)	2019			2018			2017
Current:
Federal	$	(0.1	)	$	(0.3	)	$	0.3
State	0.5			(7.6		)	(4.9		)
	0.4			(7.9		)	(4.6		)
Deferred:
Federal	254.6			(356.1		)	328.0
State	65.0			(85.1		)	84.7
	319.6			(441.2		)	412.7
Income tax benefit (expense)	$	320.0		$	(449.1	)	$	408.1

Income Tax Rate Reconciliation

Differences between the federal income tax statutory rates and effective income tax rates, which include both federal and state income taxes, were as follows for the years ended December 31:



	2019		2018		2017
Statutory federal income tax rate	21.0	%	21.0	%	35.0	%
Increase (decrease)
State income taxes, net of federal benefit	4.2		3.9		3.6
Adjust deferred taxes for state net operating loss carryforward	—		0.1		—
Transaction costs	—		—		(0.1	)
Valuation allowance	(1.7	)	(183.1	)	(0.1	)
Research and development credit	—		(1.0	)	0.1
Share-based compensation	—		(1.0	)	(0.1	)
Debt exchange	(0.2	)	6.8		(6.1	)
2017 federal tax reform	—		—		(7.6	)
Goodwill impairment	(13.2	)	—		(8.4	)
Sale of Consumer CLEC business	—		(9.3	)	—
Reorganization items, net	(0.8	)	—		—
Other items, net	(0.1	)	(1.4	)	(0.1	)
Effective income tax rate	9.2	%	(164.0	)%	16.2	%

Components of Deferred Tax Assets and Liabilities

The significant components of the net deferred income tax liability (asset) were as follows at December 31:



(Millions)	2019			2018
Property, plant and equipment	$	422.6		$	825.5
Goodwill and other intangible assets	215.6			477.7
Operating loss and credit carryforward	(548.0		)	(576.8		)
Postretirement and other employee benefits	(77.4		)	(79.6		)
Unrealized holding loss and interest rate swaps	(1.0		)	7.2
Deferred compensation	(2.2		)	(2.3		)
Bad debt	(21.4		)	(15.1		)
Long-term lease obligations	(1,033.8		)	(1,170.9		)
Operating lease right-of-use assets	1,008.0			—
Deferred debt costs	(36.8		)	(19.2		)
Share-based compensation	(4.5		)	(6.8		)
Interest expense	(30.4		)	—
Other, net	(7.3		)	(20.4		)
	(116.6		)	(580.7		)
Valuation allowance	189.2			685.0
Less amounts reclassified to liabilities subject to compromise	(72.6		)	—
Deferred income taxes, net	$	—		$	104.3
Deferred tax assets	$	(1,813.7	)	$	(1,954.0	)
Deferred tax liabilities	1,886.3			2,058.3
Less amounts reclassified to liabilities subject to compromise	(72.6		)	—
Deferred income taxes, net	$	—		$	104.3

Unrecognized Tax Benefits Reconciliation, Table

We account for uncertainty in taxes in accordance with authoritative guidance. A reconciliation of the unrecognized tax benefits is as follows:



(Millions)	2019		2018			2017
Beginning balance	$	8.0	$	8.7		$	8.8
Additions based on EarthLink acquisition	—		—			2.5
Additions based on tax positions related to current year	—		—			0.7
Reductions for tax positions of prior years	—		(0.7		)	(1.2		)
Settlements	—		—			(2.1		)
Ending balance	$	8.0	$	8.0		$	8.7