INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Components of provision for income taxes

The components of our provision for income taxes were as follows:

	Year Ended December 31,
	2018		2017		2016
	(In millions)
Other than U.S.:
Current	$	82	$	62	$	44
Deferred		22		7		(2	)
Total provision for income taxes	$	104	$	69	$	42

Geographic Source of Income Before Provision for Income Taxes

The geographic sources of income before income taxes are as follows:

	Year Ended December 31,
	2018			2017		2016
	(In millions)
U.S.	$	(2,450	)	$	123	$	(125	)
Other than U.S.		(121	)		126		207
(Loss) income before provision for income taxes	$	(2,571	)	$	249	$	82

Reconciliation of U.K. Statutory Federal Tax and Panama Statutory Federal Tax Rate to Consolidated Effective Tax Rates

The following is a reconciliation of the U.K. statutory federal tax for 2018 and Panama statutory federal tax rate for 2017 and 2016 to the consolidated effective tax rates:

	Year Ended December 31,
	2018			2017			2016
Federal statutory rate (U.K. 2018; Panama 2017 and 2016)		19	%		25	%		25	%
Goodwill impairment		(14	%)		-			-
Non-Panama operations		-			16	%		(14	%)
Change in valuation allowance for deferred tax assets - the U.S.		(7	%)		(18	%)		49	%
Change in valuation allowance for deferred tax assets - Others		(3	%)		3	%		(25	%)
Audit settlements and reserves		-			1	%		14	%
Other (primarily tax on unremitted earnings)		1	%		1	%		2	%
Effective tax rate		(4	%)		28	%		51	%

Significant Components of Deferred Tax Assets and Liabilities

Significant components of deferred tax assets and liabilities were as follows:

	December 31,
	2018			2017
	(In millions)
Deferred tax assets:
Net operating loss carryforward and other credits	$	294		$	209
State net operating loss carryforward and other credits		248			20
Non-U.S. net operating losses		189			-
Accounts receivable basis difference		161			-
Partnership investments		153			-
Depreciation and amortization		64			-
Disallowed interest		51			-
Pension liability		49			7
Accrued liabilities for incentive compensation		32			16
Contract Revenue & Cost/Long-term contracts		17
Insurance and legal reserves		17
Other		32			2
Total deferred tax assets		1,307			254
Valuation allowance for deferred tax assets		(1,307	)		(200	)
Deferred tax assets	$	-		$	54
Deferred tax liabilities:
Investments in foreign subsidiaries		33			22
Depreciation and amortization		7			26
Long-term contracts		-			14
Other		7			2
Total deferred tax liabilities		47			64
Net deferred tax liabilities	$	(47	)	$	(10	)

Summary of Deferred Tax Assets and Liabilities Recorded by Accompanying Consolidated Balance Sheets

Deferred tax assets and liabilities are recorded net by tax jurisdiction in the accompanying Consolidated Balance Sheets. Deferred tax assets and liabilities were as follows:

	December 31,
	2018			2017
	(In millions)
Deferred tax assets	$	-		$	18
Deferred tax liabilities		47			28
Net deferred tax liabilities	$	(47	)	$	(10	)

Schedule of Changes in Valuation Allowance for Deferred Tax Assets

Changes in the VA for deferred tax assets were as follows:

	Year Ended December 31,
	2018		2017			2016
	(In millions)
Balance at beginning of period	$	200	$	335		$	336
Addition due to the Combination		836		-			-
Charged to costs and expenses		250		(32	)		15
Charged to other accounts		21		(103	)		(16	)
Balance at end of period	$	1,307	$	200		$	335

Summary of Net Operating Loss, Valuation Allowance and Expiration Dates

Our net operating loss DTAs, valuation allowance and expiration dates for Non-U.S., U.S. and State DTAs were as follows:

	Net operating loss DTAs		Valuation allowance			Expiration
	(In millions)
Non-U.S.	$	189	$	(189	)	2019- 2021
U.S.		211		(211	)	2030- 2037
State		243		(243	)	2019- 2038

Reconciliation of Unrecognized Tax Benefits

A reconciliation of unrecognized tax benefits is as follows:

	Year Ended December 31,
	2018			2017			2016
	(In millions)
Balance at beginning of period	$	39		$	41		$	36
Changes due to the Combination		14			-			-
Changes due to exchange rate fluctuations		(1	)		1			-
Increases based on tax positions taken in the current year		2			1			2
Increases based on tax positions taken in prior years		9			4			8
Decreases based on tax positions taken in prior years		(5	)		(2	)		(5	)
Decreases  due to settlements		-			(6	)		-
Balance at end of period	$	58		$	39		$	41