Income Taxes (Tables)

12 Months Ended

Dec. 31, 2020

Income Tax Disclosure [Abstract]

Income Before Income Taxes

For the years ended December 31, income (loss) before income taxes consisted of the following: 

In millions	2020		2019		2018
(Loss) income before income taxes
United States	$	(41)	$	(85)	$	(79)
Foreign	17		72		106
Total (loss) income before income taxes	$	(24)	$	(13)	$	27

Income Tax Expense

For the years ended December 31, income tax (benefit) expense consisted of the following: 

In millions	2020			2019			2018
Income tax (benefit) expense
Current
Federal	$	(45)		$	(3)		$	(10)
State and local	1			—			6
Foreign	9			13			19
Deferred
Federal	34			(10)			(20)
State and local	6			(1)			(4)
Foreign	(158)			8			6
Total income tax (benefit) expense	$	(153)		$	7		$	(3)
Effective income tax rate	637.5		%	(53.8		%)	(11.1		%)

The Difference Between the Effective Tax Rate and the U.S. Federal Statutory Income Tax Rate

The following table presents the principal components of the difference between the effective tax rate and the United States federal statutory income tax rate for the years ended December 31:

	2020		2019		2018
Income tax expense at the U.S. federal tax rate	21.0	%	21.0	%	21.0	%
Foreign income tax differential	(20.8)	%	(49.2)	%	2.1	%
U.S. tax on foreign earnings	(16.7)	%	(8.4)	%	2.0	%
State and local income taxes	25.0	%	58.2	%	(25.0)	%
U.S. permanent book/tax differences	(4.2)	%	(17.0)	%	(2.7)	%
U.S. research and development tax credits	25.0	%	68.5	%	(29.5)	%
Change in valuation allowance	(25.0)	%	(49.1)	%	27.7	%
Tax impact of NOL carry-back under the CARES act.	79.2	%	—	%	—	%
Tax impact of equity compensation	(66.7)	%	(49.3)	%	(1.4)	%
Deferred tax impact from intra-entity IP transfer	654.2	%	—	%	—	%
Tax impact of U.S. Tax Reform/Transition Tax	—	%	—	%	(23.9)	%
Tax Impact of uncertain tax positions	(29.2)	%	(24.6)	%	20.2	%
Other, net	(4.3)	%	(3.9)	%	(1.6)	%
Effective income tax rate	637.5	%	(53.8)	%	(11.1)	%

Deferred Income Tax Assets and Liabilities

Deferred income tax assets and liabilities included in the balance sheets at December 31 were as follows:

In millions	2020		2019
Deferred income tax assets
Employee pensions and other liabilities	$	62	$	63
Other balance sheet reserves and allowances	13		18
Operating lease liabilities	10		14
Tax loss and credit carryforwards	105		80
Deferred revenue	7		12
Intangibles and capitalized software	155		—
Total deferred income tax assets	352		187
Valuation allowance	(51)		(45)
Net deferred income tax assets	301		142
Deferred income tax liabilities
Intangibles and capitalized software	—		8
Right of use assets - operating lease	9		13
Property and equipment	52		12
Other	25		28
Total deferred income tax liabilities	86		61
Total net deferred income tax assets	$	215	$	81

Liability Related to Uncertain Tax Positions

Below is a roll-forward of the Company’s liability related to uncertain tax positions at December 31:

In millions	2020		2019
Balance at January 1	$	37	$	34
Gross increases for prior period tax positions	6		4
Gross increases for current period tax positions	2		5
Decreases due to the lapse of applicable statute of limitations	(2)		(6)
Decreases relating to settlements with taxing authorities	(4)		—
Balance at December 31	$	39	$	37