Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

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,
	2019		2018			2017
United States	$	83	$	(25	)	$	(152	)
Outside United States	515		549			240
Total	$	598	$	524		$	88

Components of Income Tax Expense (Benefit)

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

	Year Ended December 31,
	2019			2018			2017
Current:
Federal	$	16		$	20		$	10
State	(1		)	3			8
Foreign	81			77			62
Total current	$	96		$	100		$	80
Deferred:
Federal	(32		)	(11		)	20
State	(5		)	5			(10		)
Foreign	(5		)	9			(19		)
Total deferred	$	(42	)	$	3		$	(9	)
Total	$	54		$	103		$	71

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,
	2019		2018		2017
Provision computed at statutory rate	21.0	%	21.0	%	35.0	%
U.S. Tax Reform - one-time transition tax	—		(0.6	)	41.8
Remeasurement of deferred taxes	0.2		0.7		(56.0	)
Change in valuation allowance	(1.7	)	(4.5	)	96.4
U.S. impact of Enterprise acquisition	1.0		1.1		12.9
Change in contingent income tax reserves	(3.3	)	3.2		14.0
Foreign earnings subject to U.S. taxation	1.8		2.0		2.0
Foreign rate differential	(0.7	)	(2.0	)	(29.1	)
Intra-entity transactions	—		—		(18.8	)
State income tax, net of federal tax benefit	(0.2	)	0.8		(5.3	)
Tax credits	(2.3	)	(1.9	)	(5.7	)
Equity compensation deductions	(4.0	)	(2.0	)	(5.6	)
Return to provision and other true ups	(2.0	)	1.1		(3.2	)
Other	(0.8	)	0.8		2.3
Provision for income taxes	9.0	%	19.7	%	80.7	%

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,
	2019			2018
Deferred tax assets:
Capitalized research expenditures	$	37		$	28
Deferred revenue	24			21
Tax credits	29			28
Net operating loss carryforwards	410			394
Other accruals	21			20
Inventory items	18			20
Capitalized software costs	2			8
Sales return/rebate reserve	48			41
Share-based compensation expense	12			15
Accrued bonus	7			3
Unrealized gains and losses on securities and investments	4			—
Valuation allowance	(421		)	(56		)
Total deferred tax assets	$	191		$	522
Deferred tax liabilities:
Depreciation and amortization	62			411
Unrealized gains and losses on securities and investments	—			2
Undistributed earnings	2			3
Total deferred tax liabilities	$	64		$	416
Net deferred tax assets	$	127		$	106

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,
	2019			2018
Balance at beginning of year	$	50		$	51
Additions for tax positions related to the current year	1			1
Additions for tax positions related to prior years	—			22
Reductions for tax positions related to prior years	(5		)	(11		)
Settlements for tax positions	(16		)	(13		)
Lapse of statutes	(20		)	—
Balance at end of year	$	10		$	50