Table of Contents Index to Financial Statements St. Lucie County Fire District Firefighters’ Pension Trust Indemnifications On October 17, 2016, the St. Lucie County Fire District Firefighters’ Pension Trust filed a putative class action in the 61st District Court in Harris County, Texas, against the Company, certain of its former officers and current and former directors and the underwriters on behalf of itself and others that purchased certain depositary shares from the Company’s January 2015 equity offering, alleging material misstatements and omissions in the registration statement for that offering. The Company removed the case to federal court, but after a decision by the United States Supreme Court in an unrelated case that these types of cases are not subject to removal, the federal court remanded the case to the Texas state court. The Texas trial court denied the Company’s motion to dismiss, and in February 2020, the court of appeals declined to exercise discretion to reverse the trial court’s decision. The Company filed a petition to review the trial court’s decision with the Texas Supreme Court, and the Court requested a response from the plaintiff. The Court subsequently ordered full briefing on the merits of the case. The Company carries insurance for the claims asserted against it and the officer and director defendants, and the carrier has accepted coverage. The Company denies all allegations and intends to continue to defend this case vigorously. The Company does not expect this case to have a material adverse effect on the results of operations, financial position or cash flows of the Company. Additionally, it is not possible at this time to estimate the amount of any additional loss, or range of loss, that is reasonably possible. The Company has provided certain indemnifications to various third parties, including in relation to asset and entity dispositions, securities offerings and other financings, such as the St. Lucie County Fire District Firefighters’ Pension Trust case described above. In the case of asset dispositions, these indemnifications typically relate to disputes, litigation or tax matters existing at the date of disposition. The Company likewise obtains indemnification for future matters when it sells assets, although there is no assurance the buyer will be capable of performing those obligations. In the case of equity offerings, these indemnifications typically relate to claims asserted against underwriters in connection with an offering. No material liabilities have been recognized in connection with these indemnifications. The provision (benefit) for income taxes included the following components: (11) INCOME TAXES (in millions) 2020 2019 2018 Current: Federal $ (2) $ (1) $ (5) State —  (1) 6  (2) (2) 1  Deferred: Federal 371  (431) —  State 38  22  —  409  (409) —  Provision (benefit) for income taxes $ 407  $ (411) $ 1  (in millions) 2020 2019 2018 Expected provision (benefit) at federal statutory rate $ (568) $ 101  $ 113  Increase (decrease) resulting from: State income taxes, net of federal income tax effect (55) 11  13  Change in valuation allowance 1,034  (522) (121) Removal of sequestration fee on AMT receivables —  —  (5) Other (4) (1) 1  Provision (benefit) for income taxes $ 407  $ (411) $ 1  109 The provision for income taxes was an effective rate of (15)% in 2020, (86)% in 2019 and 0% in 2018. The Company’s effective tax rate increased in 2020, as compared with 2019, primarily due to the increase in the valuation allowance in 2020. The following reconciles the provision for income taxes included in the consolidated statements of operations with the provision which would result from application of the statutory federal tax rate to pre-tax financial income: 