Annual report pursuant to Section 13 and 15(d)

Income Taxes (Tables)

v3.19.3.a.u2
Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2019
Income Tax Disclosure [Abstract]  
Schedule of components of income tax expense
We file a consolidated federal income tax return for all of our wholly owned subsidiaries, including Sirius XM and Pandora. Income tax expense consisted of the following:
 
For the Years Ended December 31,
 
2019
 
2018
 
2017
Current taxes:
 
 
 
 
 
Federal
$
—

 
$
—

 
$
—

State
(24
)
 
12

 
(32
)
Total current taxes
(24
)
 
12

 
(32
)
Deferred taxes:
 
 
 
 
 
Federal
(229
)
 
(259
)
 
(564
)
State
(30
)
 
2

 
(20
)
Total deferred taxes
(259
)
 
(257
)
 
(584
)
Total income tax expense
$
(283
)
 
$
(245
)
 
$
(616
)

Schedule of effective income tax rate reconciliation
The following table presents a reconciliation of the U.S. federal statutory tax rate and our effective tax rate:
 
For the Years Ended December 31,
 
2019
 
2018
 
2017
Federal tax expense, at statutory rate
21.0
 %
 
21.0
 %
 
35.0
 %
State income tax expense, net of federal benefit
3.9
 %
 
3.6
 %
 
2.8
 %
Change in valuation allowance
0.3
 %
 
1.0
 %
 
(0.1
)%
Tax credits
(2.7
)%
 
(6.8
)%
 
(1.7
)%
Share-based compensation
(2.4
)%
 
(3.1
)%
 
(2.9
)%
Impact of nondeductible officers' compensation
1.6
 %
 
0.7
 %
 
0.3
 %
Federal tax reform - deferred rate change
—
 %
 
—
 %
 
14.6
 %
Other, net
1.9
 %
 
0.8
 %
 
0.7
 %
Effective tax rate
23.6
 %
 
17.2
 %
 
48.7
 %

Deferred tax assets and liabilities
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities, shown before jurisdictional netting, are presented below:
 
For the Years Ended December 31,
 
2019
 
2018
Deferred tax assets:
 
 
 
Net operating loss carryforwards and tax credits
$
1,010

 
$
952

Deferred revenue
81

 
89

Accrued bonus
34

 
27

Expensed costs capitalized for tax
14

 
16

Investments
22

 
12

Stock based compensation
72

 
55

Other
10

 
6

Total deferred tax assets
1,243

 
1,157

Deferred tax liabilities:
 
 
 
Depreciation of property and equipment
(228
)
 
(230
)
FCC license
(519
)
 
(515
)
Other intangible assets
(340
)
 
(102
)
Other
(3
)
 
2

Total deferred tax liabilities
(1,090
)
 
(845
)
Net deferred tax assets before valuation allowance
153

 
312

Valuation allowance
(70
)
 
(66
)
Total net deferred tax asset
$
83

 
$
246


Uncertain income tax positions
Changes in our uncertain income tax positions, from January 1 through December 31 are set forth below:
 
2019
 
2018
Balance, beginning of year
$
387

 
$
334

Increases in tax positions for prior years
—

 
65

Increases in tax positions for current years
31

 
15

Decreases in tax positions for prior years
(12
)
 
(27
)
Balance, end of year
$
406

 
$
387