Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Components of (Provision) Benefit for Income Taxes

The components of the Company’s provision (benefit) for income taxes for the years ended December 31, 2013, 2012 and 2011 are shown in the table below.



	Years Ended December 31,
	2013			2012			2011
Current	(in millions)
Federal	$	(22	)	$	(5	)	$	(19	)
State and local	(3		)	5			3
	(25		)	—			(16		)
Deferred
Federal	(319		)	4			(74		)
State and local	(32		)	2			(35		)
	(351		)	6			(109		)
Total provision (benefit) for income taxes	$	(376	)	$	6		$	(125	)

Reconciliation of Statutory Federal Tax Rate to Effective Tax Rate

The following table shows the principal reasons for the differences between the effective income tax rate and the statutory federal income tax rate for the years ended December 31, 2013, 2012 and 2011.



	Years Ended December 31,
	2013		2012		2011
Statutory federal tax rate	35.0	%	35.0	%	35.0	%
State and local taxes, net of federal tax benefit	2.2		4.3		3.6
Non-deductible interest expenses	(0.4	)	11.8		—
Non-deductible goodwill impairment charge	(2.2	)	—		(27.5	)
Tax attribution reduction	(0.1	)	(4.3	)	—
Subsidiary basis adjustment	1.3		19.1		12.6
Change in valuation allowance	(5.9	)	(63.8	)	(8.0	)
Change in unrecognized tax benefits	2.4		—		2.9
Change in state tax laws	(0.2	)	4.3		—
Other, net	(0.6	)	6.4		0.8
Effective tax rate	31.5	%	12.8	%	19.4	%

Components of Deferred Tax Assets and Liabilities

Significant components of deferred income tax assets and liabilities as of December 31, 2013 and 2012 are shown in the following table.



	At December 31,
	2013			2012
	(in millions)
Deferred tax assets
Deferred revenue	$	4		$	9
Allowance for doubtful accounts	7			14
Deferred and other compensation	13			9
Capital investments	6			6
Debt and other interest	148			1
Pension and other post-employment benefits	34			29
Net operating loss and credit carryforwards	341			434
Other, net	21			7
Total deferred tax assets	574			509
Valuation allowance	(208		)	(133		)
Net deferred tax assets	$	366		$	376
Deferred tax liabilities
Fixed assets and capitalized software	$	(33	)	$	(33	)
Goodwill and intangible assets	(285		)	(337		)
Deferred directory costs	(35		)	(2		)
Investment in subsidiaries	(10		)	(18		)
Gain on debt retirement	(22		)	—
Total deferred tax liabilities	$	(385	)	$	(390	)
Net deferred tax liability	$	(19	)	$	(14	)

Reconciliation of Gross Unrecognized Tax Benefits

The following table shows changes to and balances of unrecognized tax benefits for the years ended December 31, 2013 and 2012.



	Years Ended December 31,
	2013			2012
	(in millions)
Balance at beginning of period	$	6		$	6
Additions for tax positions related to SuperMedia acquisition	45			—
Additions for tax positions related to the current year	1			—
Reductions for tax positions related to the current year	—			—
Reductions for tax positions related to prior years	—			—
Gross reductions for tax positions related to the lapse of applicable statute of limitations	(33		)	—
Settlements	—			—
Balance at end of period	$	19		$	6

Schedule of Valuation and Qualifying Accounts

Deferred Income Tax Asset Valuation Allowance



	Years Ended December 31,
	2013		2012			2011
	(in millions)
Balance at beginning of period	$	133	157			$	98
Net additions charged to revenue and expense	75		(24		)	59
Net charges to other balance sheet accounts	—		—			—
Write-offs and other deductions	—		—			—
Balance at end of period	$	208	$	133		$	157