Note 13 - Income Taxes

3 Months Ended

Mar. 31, 2019

Notes to Financial Statements

Income Tax Disclosure [Text Block]

13

.

Income Taxes

For the

three

-months ended

March 31, 2019

and

2018,

our income tax expense and effective income tax rates were as follows (dollars in millions):

	Three Months Ended March 31,
	2019			2018
Income tax expense	$	3		$	6
Effective income tax rate		(20	%)		23	%

We estimate our differences between taxable income or loss and recorded income or loss on an annual basis. Our tax provision for each quarter is based upon these full year projections, which are revised each reporting period. These projections incorporate estimates of permanent differences between U.S. GAAP income or loss and taxable income or loss, state income taxes and adjustments to our liability for unrecognized tax benefits to adjust our statutory Federal income tax rate of

21.0%

to our effective income tax rate. For the

three

-months ended

March 31, 2019,

these estimates increased or decreased our statutory Federal income tax rate to our effective income tax rate of (

20%

) as follows: state income taxes added

6%,

permanent differences between our U.S. GAAP income and taxable income related to

1

) restricted stock vesting that resulted in an increase of

6%,

and

2

) the divestiture of component

2

goodwill that resulted in a decrease of

53%.

For the

three

-months ended

March 31, 2018,

these estimates increased or decreased our statutory Federal income tax rate to our effective income tax rate of

23%

as follows: state income taxes added

5%

and discrete adjustments resulted in a reduction of

3%.