
	Years Ended December 31,
	2020		2019	2018
	(Dollars in millions)
Income tax expense was as follows:
Federal
Current	$	—	12	—
Deferred	162		186	199
State and local
Current	22		4	(9)
Deferred	42		41	28
Foreign
Current	19		17	30
Deferred	(24)		(5)	(52)
Total income tax expense	$	221	255	196


	Years Ended December 31,
	2020		2019	2018
	(Dollars in millions)
Income tax expense was allocated as follows:
Income tax expense in the consolidated statements of operations:
Attributable to income	$	221	255	196
Member's equity:
Tax effect of the change in accumulated other comprehensive loss	$	43	5	(49)


	Years Ended December 31,
	2020		2019		2018
	(Percentage of pre-tax income)
Statutory federal income tax rate	21.0	%	21.0	%	21.0	%
State income taxes, net of federal income tax benefit	5.8	%	(1.2)	%	2.8	%
Goodwill impairment	—	%	(26.4)	%	—	%
Tax law changes	(1.5)	%	(0.2)	%	17.2	%
Global intangible low-taxed income	—	%	(0.4)	%	1.8	%
Net foreign income tax	0.9	%	(0.8)	%	(4.8)	%
Executive compensation limitation	—	%	(0.2)	%	1.2	%
Research and development credits	(0.6)	%	0.1	%	(1.3)	%
Other, net	(0.3)	%	(0.5)	%	(1.4)	%
Effective income tax rate	25.3	%	(8.6)	%	36.5	%

For the year ended December 31, 2020, the effective tax rate is 25.3% compared to (8.6)% and 36.5% for the years ended December 31, 2019 and 2018, respectively. The effective tax rate for the year ended December 31, 2020 includes a $13 million favorable impact from U.S. tax law changes regarding Global Intangible Low Taxed Income regulations. The effective tax rate for the year ended December 31, 2019 includes a $779 million unfavorable impact of a non-deductible goodwill impairment. The effective tax rate for the year ended December 31, 2018 reflects $92 million of an estimated one-time income tax expense related to income tax law changes under the Tax Act enacted in 2017.

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


	As of December 31,
	2020		2019
	(Dollars in millions)
Deferred tax assets
Deferred revenue	$	277	306
Net operating loss carry forwards	3,503		3,233
Property, plant and equipment	65		58
Other	343		326
Gross deferred tax assets	4,188		3,923
Less valuation allowance	(1,170)		(892)
Net deferred tax assets	3,018		3,031
Deferred tax liabilities
Deferred revenue	(34)		(41)
Property, plant and equipment	(1,264)		(974)
Intangible assets	(1,773)		(1,898)
Other	(33)		(29)
Gross deferred tax liabilities	(3,104)		(2,942)
Net deferred tax (liabilities) assets	$	(86)	89

Of the $86 million net deferred tax liabilities as of December 31, 2020, $247 million is reflected as a long-term liability, in other on our consolidated balance sheets and $161 million is reflected as a net noncurrent deferred tax asset, in other, net on our consolidated balance sheets. Of the $89 million net deferred tax assets as of December 31, 2019, $241 million is reflected as a long-term liability, in other on our consolidated balance sheets and $330 million is reflected as a noncurrent deferred tax asset, in other, net on our consolidated balance sheets.

As of December 31, 2020, we had federal NOLs of $12.9 billion before uncertain tax positions of $4.1 billion, which will expire between 2024 and 2037 if unused, and state NOLs of $8.3 billion before uncertain tax positions of $618 million. As of December 31, 2020, we had foreign NOLs of $7.2 billion.

We establish valuation allowances when necessary to reduce the deferred tax assets to amounts we expect to realize. As of December 31, 2020, a valuation allowance of $1.2 billion was recorded as it is more likely than not that this amount of net operating loss and tax credit carryforwards will not be utilized prior to expiration. Our valuation allowance as of December 31, 2020 and 2019 is primarily related to foreign and state NOL carryforwards.

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 2020 and 2019 is as follows:


	2020		2019
	(Dollars in millions)
Unrecognized tax benefits at beginning of period	$	952	970
Tax positions of prior periods netted against deferred tax assets	(32)		(24)
Increase in tax positions taken in the prior period	—		1
Increase in tax positions taken in the current period	4		5
Decrease due to settlement/payments	(1)		—
Decrease from the lapse of statute of limitations	—		—
Unrecognized tax benefits at end of period	$	923	952

The total amount (including interest and any related federal benefit) of unrecognized tax benefits that, if recognized, would impact the effective income tax rate was $33 million and $30 million for the years ended December 31, 2020 and 2019, respectively.

Our policy is to reflect interest expense associated with unrecognized tax benefits in income tax expense. We had accrued interest (presented before related tax benefits) of approximately $9 million and $8 million as of December 31, 2020 and 2019, respectively.

We, or at least one of our affiliates, file income tax returns in the U.S. federal jurisdiction and various states and foreign jurisdictions. With few exceptions, we are no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2002. The Internal Revenue Service and state and local taxing authorities reserve the right to audit any period where net operating loss carry forwards are available.

Based on our current assessment of various factors, including (i) the potential outcomes of these ongoing examinations, (ii) the expiration of statute of limitations for specific jurisdictions, (iii) the negotiated settlement of certain disputed issues, and (iv) the administrative practices of applicable taxing jurisdictions, it is reasonably possible that the related unrecognized tax benefits for uncertain tax positions previously taken may decrease by up to $2 million within the next 12 months. The actual amount of such decrease, if any, will depend on several future developments and events, many of which are outside our control.