Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Geographical Sources of Income (Loss) Before Income Taxes

The geographical sources of income (loss) before income taxes were as follows (in millions):

	Year Ended December 31,
	2018			2017			2016
United States	$	(25	)	$	(152	)	$	(120	)
Outside United States	549			240			(9		)
Total	$	524		$	88		$	(129	)

Components of Income Tax Expense (Benefit)

Income tax expense (benefit) consisted of the following (in millions):

	Year Ended December 31,
	2018			2017			2016
Current:
Federal	$	20		$	10		$	14
State	3			8			6
Foreign	77			62			31
Total current	100			80			51
Deferred:
Federal	(11		)	20			(31		)
State	5			(10		)	(6		)
Foreign	9			(19		)	(6		)
Total deferred	3			(9		)	(43		)
Total	$	103		$	71		$	8

Reconciliation of U.S. Federal Statutory Income Tax Rate to Actual Income Tax Rate

A reconciliation of the U.S. federal statutory income tax rate to our actual income tax rate is provided below:

	Year Ended December 31,
	2018		2017		2016
Provision computed at statutory rate	21.0	%	35.0	%	35.0	%
U.S. Tax Reform - one-time transition tax	(0.6	)	41.8		0.0
Remeasurement of deferred taxes	0.7		(56.0	)	0.0
Change in valuation allowance	(4.5	)	96.4		(1.0	)
U.S. impact of Enterprise acquisition	1.1		12.9		(14.1	)
Change in contingent income tax reserves	3.2		14.0		(1.6	)
Foreign earnings subject to U.S. taxation	2.0		2.0		(6.6	)
Foreign rate differential	(2.0	)	(29.1	)	(16.0	)
Intra-entity transactions	0.0		(18.8	)	0.0
State income tax, net of federal tax benefit	0.8		(5.3	)	(1.0	)
Tax credits	(1.9	)	(5.7	)	9.5
Equity compensation deductions	(2.0	)	(5.6	)	(0.4	)
Return to provision and other true ups	1.1		(3.2	)	(3.7	)
Other	0.8		2.3		(6.3	)
Provision for income taxes	19.7	%	80.7	%	(6.2	)%

Components of Deferred Tax Assets and Liabilities

Tax effects of temporary differences that resulted in deferred tax assets and liabilities are as follows (in millions):

	December 31,
	2018			2017
Deferred tax assets:
Capitalized research expenditures	$	28		$	32
Deferred revenue	21			21
Tax credits	28			31
Net operating loss carryforwards	394			338
Other accruals	20			20
Inventory items	20			20
Capitalized software costs	8			14
Sales return/rebate reserve	41			33
Share-based compensation expense	15			12
Accrued bonus	3			1
Unrealized gains and losses on securities and investments	—			8
Valuation allowance	(56		)	(134		)
Total deferred tax assets	522			396
Deferred tax liabilities:
Depreciation and amortization	411			275
Unrealized gains and losses on securities and investments	2			—
Undistributed earnings	3			2
Total deferred tax liabilities	$	416		$	277
Net deferred tax assets	$	106		$	119

Reconciliation of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in millions):

	Year ended December 31,
	2018			2017
Balance at beginning of year	$	51		$	42
Additions for tax positions related to the current year	1			0
Additions for tax positions related to prior years	22			11
Reductions for tax positions related to prior years	(11		)	(1		)
Settlements for tax positions	(13		)	(1		)
Balance at end of year	$	50		$	51