Income Taxes (Tables)

12 Months Ended

Dec. 31, 2016

Components of income tax expense (benefit)

The following table summarizes the income tax (expense) benefit attributable to the income (loss) before income taxes for each of the three years ended December 31, 2016, 2015 and 2014:



	2016			2015			2014
(dollars in millions)
Current:
United States Federal	$	—		$	—		$	—
State	(4		)	(3		)	(1		)
Foreign	(41		)	(33		)	(40		)
	(45		)	(36		)	(41		)
Deferred, net of changes in valuation allowances:
United States federal	(177		)	2,941			6
State	(27		)	246			15
Foreign	84			(1		)	96
	(120		)	3,186			117
Income Tax (Expense) Benefit	$	(165	)	$	3,150		$	76

Schedule of income before income tax, domestic and foreign

(loss) before income taxes for each of the three years ended December 31, 2016, 2015 and 2014 are as follows (some of the income (loss) is subject to taxation in multiple jurisdictions):



	2016		2015			2014
(dollars in millions)
United States	$	794	$	401		$	207
Foreign	48		(118		)	31
	$	842	$	283		$	238

Schedule of effective income tax rate reconciliation

A reconciliation of the actual income tax (expense) benefit and the tax computed by applying the U.S. federal rate (35%) to the income before income taxes for each of the three years ended December 31, 2016, 2015 and 2014 is shown in the following table:



	2016			2015			2014
	(dollars in millions)
Computed Tax Expense at Statutory Rate	$	(295	)	$	(99	)	$	(83	)
State and Local Income Taxes	(31		)	(15		)	(8		)
Effect of Earnings in Jurisdictions outside of the United States	24			30			13
Change in Valuation Allowance	139			3,401			205
Disallowed Interest	(58		)	(62		)	(25		)
Non-Deductible Deconsolidation Loss	—			(57		)	—
Other Permanent Items	(33		)	(25		)	(19		)
Adoption of ASU 2016-09, Improvements to Employee Share-Based Payment Accounting	22			—			—
U.S. Federal Law Changes	110			—			—
Indefinite-Lived Assets	—			—			2
Uncertain Tax Positions	(2		)	(5		)	3
Changes in Tax Rates	(24		)	(20		)	(7		)
Other, net	(17		)	2			(5		)
Income Tax (Expense) Benefit	$	(165	)	$	3,150		$	76

Deferred tax assets and liabilities

The components of the net deferred tax assets as of December 31, 2016 and 2015 are as follows:



	2016			2015
	(dollars in millions)
Deferred Tax Assets:
Deferred revenue	364			351
Unutilized tax net operating loss carry forwards	4,550			4,959
Fixed assets	95			115
Other	471			501
Total Deferred Tax Assets	5,480			5,926
Deferred Tax Liabilities:
Deferred revenue	(57		)	(58		)
Fixed assets	(962		)	(924		)
Intangible assets	(357		)	(399		)
Other	(120		)	(350		)
Total Deferred Tax Liabilities	(1,496		)	(1,731		)
Net Deferred Tax Assets before Valuation Allowance	3,984			4,195
Valuation Allowance	(862		)	(1,002		)
Net Deferred Tax Assets after Valuation Allowance	$	3,122		$	3,193

Operating loss carryforwards

The U.S. net operating tax loss carry forwards available for federal income tax purposes expire as follows (dollars in millions):



Expiring December 31,	Amount
2024	$	891
2025	1,267
2026	1,254
2027	1,645
2028	477
2029	694
2030	663
2031	833
2032	729
2033	194
2034	389
2035	1
	$	9,037

Uncertain tax benefits

A reconciliation of the beginning and ending balance of unrecognized income tax benefits follows (dollars in millions):



	Amount
Balance as of January 1, 2014	$	13
Tax positions of prior years netted against deferred tax assets	5
Gross increases - tax positions of prior years	1
Gross increases - tax positions during 2014	—
Gross decreases - lapse of statute of limitations	(2		)
Gross decreases - settlement with taxing authorities	—
Balance as of December 31, 2014	17
Tax positions of prior years netted against deferred tax assets	(2		)
Gross increases - tax positions of prior years	3
Gross increases - tax positions during 2015	2
Gross decreases - lapse of statute of limitations	(2		)
Gross decreases - settlement with taxing authorities	—
Balance as of December 31, 2015	18
Tax positions of prior years netted against deferred tax assets	(1		)
Gross increases - tax positions during 2016	2
Gross decreases - tax positions of prior years	(1		)
Gross decreases - lapse of statute of limitations	—
Gross decreases - settlement with taxing authorities	—
Balance as of December 31, 2016	$	18