Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Schedule of components of the income tax expense from continuing operations

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



	Years Ended December 31,
	2019		2018		2017
	(Dollars in millions)
Income tax expense (benefit):
Current:
Federal and foreign	$	415	(39	)	777
State and local	126		31		130
Total current	541		(8	)	907
Deferred:
Federal and foreign	95		408		(736	)
State and local	5		94		(37	)
Total deferred	100		502		(773	)
Income tax expense	$	641	494		134

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,
	2019		2018		2017
	(in percent)
Effective income tax rate:
Federal statutory income tax rate	21.0	%	21.0	%	35.0	%
State income taxes-net of federal effect	4.1	%	6.1	%	3.4	%
Tax reform	—	%	—	%	(31.0	)%
Accounting method changes	—	%	(3.9	)%	—	%
Other	0.9	%	(0.3	)%	0.1	%
Effective income tax rate	26.0	%	22.9	%	7.5	%

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,
	2019			2018
	(Dollars in millions)
Deferred tax assets and liabilities:
Deferred tax liabilities:
Property, plant and equipment	$	(1,256	)	(1,026	)
Intangibles assets	(280		)	(419	)
Total deferred tax liabilities	(1,536		)	(1,445	)
Deferred tax assets:
Payable to affiliate due to post-retirement benefit plan participation	326			297
Other	20			58
Gross deferred tax assets	346			355
Less valuation allowance on deferred tax assets	(8		)	(8	)
Net deferred tax assets	338			347
Net deferred tax liabilities	$	(1,198	)	(1,098	)

Reconciliation of unrecognized tax benefits

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 2019 and 2018 are as follows:



	2019			2018
	(Dollars in millions)
Unrecognized tax benefits at January 1,	$	433		—
Increase due to tax positions taken in a prior year	—			433
Decrease due to tax positions taken in a prior year	(19		)	—
Unrecognized tax benefits at December 31,	$	414		433