INCOME TAXES (Tables)

9 Months Ended

Sep. 30, 2021

Schedule of Components of Income Tax Expense (Benefit)

The components of income tax expense are as follows (dollars in millions):


	Three months ended				Nine months ended
	September 30,				September 30,
	2021		2020		2021		2020
Current tax expense (benefit)	$	14.1	$	7.4	$	50.9	$	(44.5)
Deferred tax expense	14.1		29.8		43.5		89.3

Income tax expense calculated based on estimated annual effective tax rate	28.2		37.2		94.4		44.8
Income tax benefit on discrete items:

Carryback of net operating losses to years with a higher statutory corporate rate pursuant to provisions of the CARES Act (as defined below)	—		—		—		(34.0)
Total income tax expense	$	28.2	$	37.2	$	94.4	$	10.8

Schedule of Effective Income Tax Rate Reconciliation

A reconciliation of the U.S. statutory corporate tax rate to the estimated annual effective rate, reflected in the consolidated statement of operations is as follows:


	Nine months ended
	September 30,
	2021		2020
U.S. statutory corporate rate	21.0	%	21.0	%

Non-taxable income and nondeductible benefits, net	(.1)		(.5)

State taxes	1.6		1.8
Estimated annual effective tax rate calculated before discrete items	22.5		22.3
Impact on effective tax rate from discrete items:
Carryback of net operating losses to years with a higher statutory corporate rate pursuant to provisions of the CARES Act	—		(16.9)
Effective tax rate	22.5	%	5.4	%

Schedule of Deferred Tax Assets and Liabilities

The components of the Company's income tax assets and liabilities are summarized below (dollars in millions):


	September 30, 2021		December 31, 2020
Deferred tax assets:
Net federal operating loss carryforwards	$	265.4	$	339.2
Net state operating loss carryforwards	1.5		2.7



Insurance liabilities	389.5		386.4
Indirect costs allocable to self-constructed real estate assets	142.5		105.7
Other	31.6		43.0
Gross deferred tax assets	830.5		877.0
Deferred tax liabilities:
Investments	(40.5)		(29.5)
Present value of future profits and deferred acquisition costs	(122.3)		(133.8)
Accumulated other comprehensive income	(532.2)		(604.3)
Gross deferred tax liabilities	(695.0)		(767.6)


Net deferred tax assets	135.5		109.4
Current income taxes prepaid	10.2		90.0
Income tax assets, net	$	145.7	$	199.4

Summary of Operating Loss Carryforwards

We have $1.3 billion of federal NOLs as of September 30, 2021, as summarized below (dollars in millions):


	Net operating loss
Year of expiration	carryforwards
2023	$	677.0
2025	85.2
2026	149.9
2027	10.8
2028	80.3
2029	213.2
2030	.3
2031	.2
2032	44.4
2033	.6
2034	.9
2035	.8
Total federal non-life NOLs	$	1,263.6