Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Components of income tax expense (benefit)



	Successor							Predecessor
	Year Ended December 31, 2019			Year Ended December 31, 2018		Period Ended December 31, 2017		Period Ended October 31, 2017
	(Dollars in millions)
Income tax expense was as follows:
Federal
Current	$	12		—		—		—
Deferred	186			199		231		193
State
Current	4			(9	)	2		7
Deferred	41			28		6		16
Foreign
Current	17			30		4		39
Deferred	(5		)	(52	)	(9	)	13
Total income tax expense	$	255		196		234		268

Schedule of income before income tax, domestic and foreign



	Successor				Predecessor
	Year Ended December 31, 2019	Year Ended December 31, 2018		Period Ended December 31, 2017	Period Ended October 31, 2017
	(Dollars in millions)
Income tax expense was allocated as follows:
Income tax expense in the consolidated statements of operations:
Attributable to income	255	196		234	268
Member's/Stockholders' equity:
Tax effect of the change in accumulated other comprehensive loss	5	(49	)	17	49

Schedule of effective income tax rate reconciliation

The following is a reconciliation from the statutory federal income tax rate to our effective income tax rate:



	Successor						Predecessor
	Year Ended December 31, 2019		Year Ended December 31, 2018		Period Ended December 31, 2017		Period Ended October 31, 2017
	(Percentage of pre-tax income)
Statutory federal income tax rate	21.0	%	21.0	%	35.0	%	35.0	%
State income taxes, net of federal income tax benefit	(1.2	)%	2.8	%	3.6	%	2.9	%
Goodwill impairment	(26.4	)%	—	%	—	%	—	%
Tax Reform	(0.2	)%	17.2	%	210.6	%	—	%
Global intangible low-taxed income	(0.4	)%	1.8	%	—	%	—	%
CenturyLink acquisition transaction costs	—	%	—	%	11.3	%	—	%
Uncertain tax positions	—	%	0.5	%	1.2	%	0.1	%
Base erosion and anti-abuse tax	(0.4	)%	—	%	—	%	—	%
Net foreign income tax	(0.8	)%	(4.8	)%	(19.3	)%	0.9	%
Executive compensation limitation	(0.2	)%	1.2	%	5.4	%	0.9	%
Research and development credits	0.1	%	(1.3	)%	(0.9	)%	(1.2	)%
Other, net	(0.1	)%	(1.9	)%	4.7	%	0.1	%
Effective income tax rate	(8.6	)%	36.5	%	251.6	%	38.7	%

Deferred tax assets and liabilities

The tax effects of temporary differences that gave rise to significant portions of the deferred tax assets and deferred tax liabilities were as follows:



	December 31,
	2019			2018
	(Dollars in millions)
Deferred tax assets
Deferred revenue	$	306		298
Net operating loss carry forwards	3,233			3,494
Property, plant and equipment	58			57
Other	326			309
Gross deferred tax assets	3,923			4,158
Less valuation allowance	(892		)	(931	)
Net deferred tax assets	3,031			3,227
Deferred tax liabilities
Deferred revenue	(41		)	(45	)
Property, plant and equipment	(974		)	(853	)
Intangible assets	(1,898		)	(1,998	)
Other	(29		)	(25	)
Gross deferred tax liabilities	(2,942		)	(2,921	)
Net deferred tax assets	89			306

Schedule of unrecognized tax benefits

A reconciliation of the change in our gross unrecognized tax benefits (excluding both interest and any related federal benefit) from January 1 to December 31 for 2019 and 2018 is as follows:



	2019			2018
	(Dollars in millions)
Unrecognized tax benefits at beginning of period	$	970		21
Tax positions of prior periods netted against deferred tax assets	(24		)	950
(Decrease) increase in tax positions taken in the prior period	1			(1	)
Increase in tax positions taken in the current period	5			3
Decrease due to settlement/payments	—			(1	)
Decrease from the lapse of statute of limitations	—			(2	)
Unrecognized tax benefits at end of period	952			970