TAXES (Tables)

12 Months Ended

Dec. 31, 2021

TAXES

Income before income taxes

	Year Ended December 31,
(Dollars in millions)	2021		2020		2019
Income (loss) before income taxes:
U.S. operations	$	(1,765)	$	(974)	$	(732)
Non-U.S. operations		(138)		(786)		159
Total income (loss) before income taxes	$	(1,903)	$	(1,760)	$	(573)

Components of the provision for income taxes by geographic operations and taxing jurisdiction

	Year Ended December 31,
(Dollars in millions)	2021		2020		2019
U.S. federal:
Current	$	17	$	—	$	—
Deferred		(73)		—		—
	$	(56)	$	—	$	—
U.S. state and local:
Current	$	—	$	—	$	—
Deferred		(5)		—		—
	$	(5)	$	—	$	—
Non-U.S.:
Current	$	790	$	305	$	413
Deferred		(327)		(58)		(47)
	$	463	$	247	$	366
Total provision for income taxes	$	402	$	247	$	366

Effective income tax rate reconciliation

	Year Ended December 31,
	2021		2020		2019
Statutory rate	21.0	%	21.0	%	21.0	%
Tax differential on foreign income	(8.6)	%	(5.9)	%	(18.8)	%
State and local taxes	3.0	%	2.8	%	6.4	%
Valuation allowances	(16.1)	%	(26.1)	%	(59.7)	%
Reserves for uncertain tax positions	(8.3)	%	(4.9)	%	(7.2)	%
Intercompany prepayment *	0.5	%	0.7	%	0.6	%
Undistributed foreign earnings	(0.6)	%	(1.0)	%	(3.5)	%
Impact of foreign operations	(4.7)	%	—	%	(0.9)	%
Separation-related transactions	(2.6)	%	—	%	—	%
Goodwill impairment	(4.0)	%	—	%	—	%
Other	(0.7)	%	(0.6)	%	(1.6)	%
Effective tax rate	(21.1)	%	(14.0)	%	(63.8)	%

*       Represents a U.S. tax rate benefit related to foreign tax prepayment on prepaid royalty income.
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Components of deferred tax assets and liabilities

	December 31,
(Dollars in millions)	2021		2020
Deferred tax assets
Retirement benefits	$	255	$	126
Leases		340		380
Stock-based and other compensation		60		37
Domestic tax loss/credit carryforwards		16		643
Deferred income		31		50
Foreign tax loss/credit carryforwards		76		509
Allowance for credit losses		10		37
Fixed assets and depreciation		130		—
Restructuring charges		—		59
Limitation on deductibility of interest		—		50
Accruals		57		91
Other		54		—
Gross deferred tax assets	$	1,029	$	1,982
Less: valuation allowance		(6)		(1,110)
Net deferred tax assets	$	1,023	$	872
Deferred tax liabilities
Fixed assets and depreciation	$	—	$	80
Goodwill and intangible assets		—		45
Leases and right-of-use assets		331		331
Undistributed foreign earnings		25		57
Deferred transition costs		106		—
Other		21		12
Gross deferred tax liabilities	$	483	$	525

Reconciliation of the beginning and ending amount of unrecognized tax benefits

(Dollars in millions)	2021		2020		2019
Balance at January 1	$	18	$	15	$	14
Additions based on tax positions related to the current year		479		89		41
Additions for tax positions of prior years		—		—		—
Reductions for tax positions of prior years (including impacts due to a lapse of statute)		—		—		—
Settlements (closed out to Net Parent investment)		(453)		(86)		(40)
Balance at December 31	$	44	$	18	$	15