Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Schedule of components of the income tax expense from continuing operations

The components of the income tax expense from continuing operations are as follows:



	Years Ended December 31,
	2017			2016		2015
	(Dollars in millions)
Income tax expense:
Current:
Federal and foreign	$	777		686		734
State and local	130			115		114
Total current	907			801		848
Deferred:
Federal and foreign	(736		)	(103	)	(170	)
State and local	(37		)	(20	)	(19	)
Total deferred	(773		)	(123	)	(189	)
Income tax expense	$	134		678		659

Schedule of effective income tax rate for continuing operations that differs from the statutory tax rate

The effective income tax rate for continuing operations differs from the statutory tax rate as follows:



	Years Ended December 31,
	2017		2016		2015
	(in percent)
Effective income tax rate:
Federal statutory income tax rate	35.0	%	35.0	%	35.0	%
State income taxes-net of federal effect	3.4	%	3.5	%	3.6	%
Tax reform	(31.0	)%	—	%	—	%
Other	0.1	%	—	%	(0.6	)%
Effective income tax rate	7.5	%	38.5	%	38.0	%

Schedule of components of the 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:



	As of December 31,
	2017			2016
	(Dollars in millions)
Deferred tax assets and liabilities:
Deferred tax liabilities:
Property, plant and equipment	$	(933	)	(1,384	)
Intangibles assets	(553		)	(1,088	)
Receivable from an affiliate due to pension plan participation	—			(452	)
Total deferred tax liabilities	(1,486		)	(2,924	)
Deferred tax assets:
Payable to affiliate due to post-retirement benefit plan participation	366			954
Other	127			209
Gross deferred tax assets	493			1,163
Less valuation allowance on deferred tax assets	(8		)	(12	)
Net deferred tax assets	485			1,151
Net deferred tax liabilities	$	(1,001	)	(1,773	)