The Company and its eligible subsidiaries file a consolidated U.S. federal income tax return. Certain subsidiaries are not eligible to be included in the consolidated U.S. federal income tax return and separate provisions for income taxes have been determined for these entities or groups of entities. The tax returns and the amount of taxable income or loss are subject to examination by U.S. federal, state, local and foreign taxing authorities.

The Company continually assesses both positive and negative evidence to determine whether it is more likely than not that deferred tax assets can be realized prior to their expiration. Pioneer monitors Company-specific, oil and gas industry and worldwide economic factors and based on that information, along with other data, reassesses the likelihood that the Company's net operating loss carryforwards ("NOLs") and other deferred tax attributes in the U.S. federal, state, local and foreign tax jurisdictions will be utilized prior to their expiration.

Enactment of the Consolidated Appropriations Act, 2021. On December 27, 2020, President Trump signed into law the Consolidated Appropriations Act, 2021 ("the Act"). The Act includes many tax provisions, including the extension of various expiring provisions, extensions and expansions of certain earlier pandemic tax relief provisions, among other things. The Act did not have a material impact on the Company's current year tax provision or the Company's consolidated financial statements.

Enactment of the Coronavirus Aid, Relief and Economic Security Act. On March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief and Economic Security Act ("CARES Act"). The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. The CARES Act did not have a material impact on the Company's current year tax provision or the Company's consolidated financial statements.

Enactment of the Tax Cuts and Jobs Act. On December 22, 2017, the U.S. enacted the Tax Cuts and Jobs Act (the "Tax Reform Legislation"), which introduced significant changes to the U.S. federal income tax law. The changes that most impact the Company include:

•Repeal of the corporate alternative minimum tax ("AMT"). The Tax Reform Legislation provides that existing AMT credit carryovers are refundable beginning in 2018. As of December 31, 2020, the Company's AMT credit carryovers have been substantially refunded.

•The Tax Reform Legislation preserves the deductibility of intangible drilling costs and provides for 100 percent bonus depreciation on personal tangible property expenditures through 2022. The bonus depreciation percentage will be phased out from 2023 through 2026.

The Tax Reform Legislation is a comprehensive bill containing other provisions, such as limitations on the deductibility of interest expense and certain executive compensation, that are not expected to materially affect Pioneer. The ultimate impact of the Tax Reform Legislation may differ from the Company's estimates due to changes in the interpretations and assumptions made by the Company as well as additional regulatory guidance that may be issued.

Uncertain tax positions. The Company had unrecognized tax benefits ("UTBs") resulting from research and experimental expenditures related to horizontal drilling and completion innovations. In December 2019, the Company and the taxing authorities effectively settled the uncertain tax position for the 2012-2015 tax years. In December 2020, the Company and the taxing authorities effectively settled the remaining uncertain tax position for the 2016-2018 tax years. As of December 31, 2020, the Company no longer has any UTBs.


	Year Ended December 31,
	2020		2019		2018
	(in millions)
Beginning unrecognized tax benefits	$	39	$	141	$	124
Current year additions	—		—		17
Effectively settled tax positions	(39)		(102)		—
Ending unrecognized tax benefits	$	—	$	39	$	141

The Company files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. As of December 31, 2020, there are no proposed adjustments in any jurisdiction that would have a significant effect on the Company's future results of operations or financial position.


	Year Ended December 31,
	2020		2019		2018
	(in millions)
Current:
U.S. federal	$	12	$	8	$	—
U.S. state	(3)		(3)		(2)
Current income tax benefit (provision)	9		5		(2)
Deferred:
U.S. federal	55		(228)		(258)
U.S. state	(3)		(12)		(16)
Deferred income tax benefit (provision)	52		(240)		(274)
Income tax benefit (provision)	$	61	$	(235)	$	(276)


	Year Ended December 31,
	2020			2019			2018
	(in millions, except percentages)
Income (loss) before income taxes	$	(261)		$	1,008		$	1,251
Net loss attributable to noncontrolling interests	—			—			3
Income (loss) attributable to common stockholders before income taxes	$	(261)		$	1,008		$	1,254
Federal statutory income tax rate	21		%	21		%	21		%
Benefit (provision) for federal income taxes at the statutory rate	55			(212)			(263)
State income tax provision (net of federal tax)	(5)			(12)			(12)



Other	11			(11)			(1)
Income tax benefit (provision)	$	61		$	(235)		$	(276)
Effective income tax rate, excluding net loss attributable to noncontrolling interests	23		%	23		%	22		%


	As of December 31,
	2020		2019
	(in millions)
Deferred tax assets:
Net operating loss carryforward (a)	$	1,111	$	1,039
Credit carryforwards (b)	110		101

Asset retirement obligations	61		41
Incentive plans	29		40
Net deferred hedge losses	68		—
South Texas Divestiture	62		75
Lease deferred tax assets	167		191
Other	47		47
Deferred tax assets	1,655		1,534
Deferred tax liabilities:
Oil and gas properties, principally due to differences in basis, depletion and the deduction of intangible drilling costs for tax purposes	(2,741)		(2,628)
Other property and equipment, principally due to the deduction of bonus depreciation for tax purposes	(196)		(189)
Net deferred hedge gains	—		(9)
South Texas Divestiture	(16)		(35)
Lease deferred tax liabilities	(43)		(61)
Convertible Notes	(23)		—


Other	(2)		(5)
Deferred tax liabilities	(3,021)		(2,927)
Net deferred tax liability	$	(1,366)	$	(1,393)

(a)Net operating loss carryforwards as of December 31, 2020 consist of $5 billion of U.S. federal NOLs, which expire between 2032 and 2040. Additionally, the net operating loss carryforwards consist of $177 million of Colorado NOLs that begin to expire in 2027 and which has a fully offsetting valuation allowance.