Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Income Loss Before Income Taxes

Income before income taxes included the following (dollars in millions):

	Years ended December 31,
	2019		2018		2017
U.S. income	$	712	$	755	$	491
Foreign income		56		50		36
Total	$	768	$	805	$	527

Provision for Income Tax Expense

The provision for income tax expense was estimated as follows (dollars in millions):

	Years ended December 31,
	2019		2018		2017
Estimated current income taxes:
U.S. federal	$	75	$	94	$	61
Foreign		13		9		7
U.S. state and local		11		11		5
Total Current		99		114		73
Deferred income tax expense (credit), net:
U.S. federal		58		45		(44	)
Foreign		—		—		1
U.S. state and local		7		7		(7	)
Total Deferred		65		52		(50	)
Total income tax expense	$	164	$	166	$	23

Reconciliation of Provision for Income Tax Expense

A reconciliation of the provision for income tax expense compared with the amounts at the U.S. federal statutory rate is as follows (dollars in millions):

	Years ended December 31,
	2019			2018			2017
Tax at U.S. statutory income tax rate	$	161		$	169		$	185
State tax expense		14			15			10
Non-deductible expenses		(7	)		(9	)		7
Tax credits		(4	)		(3	)		(21	)
Effect of tax rate changes		(2	)		(4	)		—
Valuation allowance		1			2			3
Foreign rate differential		(1	)		(4	)		(5	)
Impact related to U.S. Tax Cuts and Jobs Act		—			—			(155	)
Other adjustments		2			—			(1	)
Total income tax expense	$	164		$	166		$	23

Deferred Tax Assets and Liabilities

Temporary differences and carryforwards that gave rise to deferred tax assets and liabilities included the following (dollars in millions):

	As of December 31 2019			As of December 31 2018
Deferred tax assets:
Deferred revenue	$	28		$	24
Intangibles		23			29
Other accrued liabilities		23			20
Warranty accrual		11			14
Operating loss carryforwards		8			10
Interest rate hedges		8			2
Stock-based compensation		7			5
Sales allowances and rebates		6			8
Inventories		6			4
Technology-related investments		5			5
Other		7			8
Total Deferred tax assets		132			129
Valuation allowances		(10	)		(10	)
Deferred tax liabilities:
Goodwill		(337	)		(311	)
Trade name		(132	)		(114	)
Property, plant and equipment		(28	)		(10	)
Post-retirement		(6	)		(9	)
Other		(2	)		(2	)
Total Deferred tax liabilities		(505	)		(446	)
Net Deferred tax liability	$	(383	)	$	(327	)

Liability for Unrecognized Tax Benefit

December 31, 2017	$	2
Increases in unrecognized tax benefits as a result of current year activity		—
December 31, 2018	$	2
Increases in unrecognized tax benefits as a result of current year activity		1
December 31, 2019	$	3