INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Summary of the Components of the (Benefit) Provision for Income Taxes

The following is a summary of the components of the (benefit) provision for income taxes for Verso:

	Year Ended December 31,
(Dollars in millions)	2017			2018			2019
Current tax (benefit) provision:
U.S. federal	$	(6	)	$	—		$	—
U.S. state and local	—			—			1
Total current tax (benefit) provision	(6		)	—			1
Deferred tax (benefit) provision:
U.S. federal	64			35			(4		)
U.S. state and local	(1		)	(31		)	2
Total deferred tax (benefit) provision	63			4			(2		)
Less: valuation allowance	(63		)	(4		)	(115		)
Allocation to Other comprehensive (income) loss	(2		)	—			(1		)
Total income tax (benefit) provision	$	(8	)	$	—		$	(117	)

Reconciliation of Income Tax Expense using the Statutory Federal Income Tax Rate Compared with Actual Income Tax Expense

A reconciliation of income tax expense using the statutory federal income tax rate compared with actual income tax expense follows:

	Year Ended December 31,
(Dollars in millions)	2017			2018			2019
Tax at Statutory U.S. Rate of 21% in 2019 and 2018 and 35% in 2017	$	(13	)	$	36		$	(4	)
Increase resulting from:
Federal tax rate change	71			—			—
Allocation to Other comprehensive (income) loss related to pension benefits.	(2		)	—			(1		)
Other expenses	—			(1		)	—
Net permanent differences	69			(1		)	(1		)
Valuation allowance	(63		)	(4		)	(115		)
State income taxes (benefit)	—			(31		)	3
Other	(1		)	—			—
Total income tax (benefit) provision	$	(8	)	$	—		$	(117	)

Summary of the Significant Components of Deferred Tax Position

The following is a summary of the significant components of the net deferred tax asset (liability):

	December 31,
(Dollars in millions)	2018			2019
Deferred tax assets:
Net operating loss	$	46		$	54
Credit carryforwards	40			44
Pension	140			123
Compensation obligations	18			15
Inventory reserves/capitalization	23			24
Capitalized expenses	4			4
Other	8			12
Gross deferred tax assets	279			276
Less: valuation allowance	(126		)	(11		)
Deferred tax assets, net of allowance	$	153		$	265
Deferred tax liabilities:
Property, plant and equipment	$	(149	)	$	(137	)
Intangible assets	(3		)	(5		)
Other	(1		)	(5		)
Total deferred tax liabilities	(153		)	(147		)
Net deferred tax assets	$	—		$	118

Schedule of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

(Dollars in millions)
Balance at December 31, 2017	$	2
Additions	—
Reductions	—
Balance at December 31, 2018	2
Additions	—
Reductions	—
Balance at December 31, 2019	$	2