INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Components of provision (benefit) for income taxes

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

	Year Ended December 31,
	2019			2018		2017
	(In millions)
U.S.:
Current	$	(16	)	$	-	$	-
Deferred		6			-		-
Other than U.S.:
Current		62			82		62
Deferred		6			22		7
Total provision for income taxes	$	58		$	104	$	69

Geographic Source of (Loss) Income Before Provision for Income Taxes

The geographic sources of (loss) income before income taxes are as follows:

	Year Ended December 31,
	2019			2018			2017
	(In millions)
U.S.	$	(2,031	)	$	(2,450	)	$	123
Other than U.S.		(795	)		(121	)		126
(Loss) income before provision for income taxes	$	(2,826	)	$	(2,571	)	$	249

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

The following is a reconciliation of the U.K. statutory federal tax rate for 2019 and 2018 and the Panamanian statutory federal tax rate for 2017 to the consolidated effective tax rates:

	Year Ended December 31,
	2019			2018			2017
Federal statutory rate		19	%		19	%		25	%
Goodwill impairment		(11	%)		(14	%)		-
Non-Panama operations		-			-			16	%
Change in valuation allowance for deferred tax assets - the U.S.		(4	%)		(7	%)		(18	%)
Change in valuation allowance for deferred tax assets - Others		(3	%)		(3	%)		3	%
Audit settlements and reserves		-			-			1	%
Other		(3	%)		1	%		1	%
Effective tax rate		(2	%)		(4	%)		28	%

Significant Components of Deferred Tax Assets and Liabilities

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

	December 31,
	2019			2018
	(In millions)
Deferred tax assets:
U.S. Federal net operating loss carryforward and other credits	$	454		$	294
State net operating loss carryforward and other credits		196			248
Non-U.S. net operating losses		233			189
Accounts receivable basis difference		114			161
Partnership investments		75			153
Depreciation and amortization		115			64
Disallowed interest		108			51
Pension liability		49			49
Accrued liabilities for incentive compensation		20			32
Contract revenue and cost/long-term contracts		69			17
Insurance and legal reserves		20			17
Operating lease liability		66			-
Other		20			32
Total deferred tax assets		1,539			1,307
Valuation allowance for deferred tax assets		(1,472	)		(1,307	)
Deferred tax assets	$	67		$	-
Deferred tax liabilities:
Investments in foreign subsidiaries		38			33
Depreciation and amortization		15			7
Pension liability		2			-
Right of use assets		67			-
Other		4			7
Total deferred tax liabilities		126			47
Net deferred tax liabilities	$	(59	)	$	(47	)

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,
	2019			2018
	(In millions)
Deferred tax assets	$	-		$	-
Deferred tax liabilities		59			47
Net deferred tax liabilities	$	(59	)	$	(47	)

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,
	2019			2018		2017
	(In millions)
Balance at beginning of period	$	1,307		$	200	$	335
Addition due to the Combination		39			836		-
2018 Federal benefit of state adjustment (1)		(62	)		-		-
Charged to costs and expenses		206			250		(32	)
Charged to other accounts		(18	)		21		(103	)
Balance at end of period	$	1,472		$	1,307	$	200

⁽¹⁾ The change in the 2018 Federal Benefit of State (FBOS) VA was included in the State tax, not in the VA. The change in the 2019 FBOS VA is included in the VA. Therefore, the 2018 FBOS VA was adjusted to reflect the adjusted beginning balance with FBOS.

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.	$	233	$	(233	)	2020- Unlimited
U.S.		386		(386	)	2031- Unlimited
State		192		(192	)	2020- 2039

Reconciliation of Unrecognized Tax Benefits

A reconciliation of unrecognized tax benefits is as follows:

	Year Ended December 31,
	2019			2018			2017
	(In millions)
Balance at beginning of period	$	58		$	39		$	41
Changes due to the Combination		-			14			-
Changes due to exchange rate fluctuations		-			(1	)		1
Increases based on tax positions taken in the current year		4			2			1
Increases based on tax positions taken in prior years		5			9			4
Decreases based on tax positions taken in prior years		(9	)		(5	)		(2	)
Decreases  due to settlements		-			-			(6	)
Decreases due to lapse of applicable statute of limitation		(2	)		-			-
Balance at end of period	$	56		$	58		$	39