INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Total Deferred Tax Asset [Table Text Block]

Net deferred tax assets and liabilities are included in the consolidated balance sheets as follows:

	December 31,
	2019			2018
	(in millions)
Long-term assets	$	269		$	280
Long-term liabilities	(15		)	(14		)
Total deferred tax asset	$	254		$	266

Provision (benefit) for income taxes

	Year Ended December 31,
	2019		2018			2017
	(in millions)
Current income tax expense	$	48	$	99		$	113
Deferred income tax expense (benefit), net	9		(108		)	(7		)
Total income tax expense (benefit)	$	57	$	(9	)	$	106

Reconciliation of the provision for income taxes compared with the amounts at the notional U.S. federal statutory rate

reconciliation of the provision for income taxes compared with the amounts at the theoretical rate:

	Year Ended December 31,
	2019			2018			2017
	(in millions)
Theoretical income taxes at the U.K. weighted average rate	$	16		$	69		$	81
Income taxed at other rates	10			(42		)	(10		)
Losses not benefitted	30			9			28
Tax credits	(18		)	—			—
Other change in tax reserves	2			17			4
Change in valuation allowances	2			(78		)	(12		)
Withholding taxes	12			11			11
Change in tax law	—			2			7
Other adjustments	3			3			(3		)
Total income tax expense (benefit)	$	57		$	(9	)	$	106
Effective tax rate	66		%	(2		)%	25		%

Significant components of the deferred tax assets and liabilities

Significant components of the deferred tax assets and liabilities are as follows:

	December 31,
	2019			2018
	(in millions)
Deferred tax assets:
Pension	$	75		$	83
Employee benefits	5			4
Net operating loss carryforwards	245			236
Warranty and other liabilities	31			35
Intangible assets	7			10
Tax credits	20			—
Other	80			51
Total gross deferred tax assets	463			419
Less: valuation allowances	(181		)	(124		)
Total deferred tax assets (1)	$	282		$	295
Deferred tax liabilities:
Fixed assets	$	17		$	16
Tax on unremitted profits of certain foreign subsidiaries	11			13
Total gross deferred tax liabilities	28			29
Net deferred tax assets	$	254		$	266

(1)

Reflects gross amount before jurisdictional netting of deferred tax assets and liabilities.

Summary of Valuation Allowance [Table Text Block]

The table below summarizes the activity in the valuation allowance account for the years ended December 31, 2019, 2018 and 2017:

	Year Ended December 31,
	2019			2018			2017
	(in millions)
Balance at beginning of year	$	124		$	196		$	70
Provision charged to costs and expenses (1)	61			71			20
Deductions	(2		)	(144		)	(12		)
Other activity (2)	(2		)	1			118
Balance at end of year	$	181		$	124		$	196

(1) Provision charged to costs and expenses primarily related to taxable losses for which the tax benefit has been reserved.

(2)

In 2017, the Other activity primarily represents the transfer of certain deferred tax assets and the related valuation allowance from the Former Parent as a result of the Separation.

reconciliation of the gross change in the unrecognized tax benefits balance

A reconciliation of the gross change in the unrecognized tax benefits balance, excluding interest and penalties is as follows:

	Year Ended December 31,
	2019			2018		2017
	(in millions)
Balance at beginning of year	$	46		$	22	$	9
Additions related to current year	2			16		3
Additions related to prior years	—			1		2
Settlements	(2		)	—		—
Transfers to/from Former Parent	—			7		8
Balance at end of year	$	46		$	46	$	22