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Income Taxes
 6 Months Ended
Jun. 30, 2019
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
The differences between the 21% statutory federal income tax rate and our effective income tax rate were as follows:
(Dollars in millions)
 
Three months ended June 30,
 
Six months ended June 30,
 
 
2019
 
2018
 
2019
 
2018
Tax at statutory rate:
 
$
111

 
21.0
 %
 
$
56

 
21.0
 %
 
$
293

 
21.0
 %
 
$
45

 
21.0
 %
Increase (decrease) resulting from:
 
 

 
 

 
 

 
 

 
 

 
 

 
 

 
 

Tax-exempt income from municipal bonds
 
(4
)
 
(0.8
)
 
(5
)
 
(1.9
)
 
(9
)
 
(0.6
)
 
(10
)
 
(4.7
)
Dividend received exclusion
 
(4
)
 
(0.8
)
 
(5
)
 
(1.5
)
 
(8
)
 
(0.6
)
 
(8
)
 
(3.7
)
Other
 
(1
)
 
(0.2
)
 
1

 
0.2

 
(2
)
 
(0.2
)
 
1

 
0.5

Provision for income taxes
 
$
102

 
19.2
 %
 
$
47

 
17.8
 %
 
$
274

 
19.6
 %
 
$
28

 
13.1
 %
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
The provision for federal income taxes is based upon filing a consolidated income tax return for the company and its subsidiaries.

Unrecognized Tax Benefits
As of June 30, 2019 and December 31, 2018, we had a gross unrecognized tax benefit of $34 million. There were no changes to this amount during the first half of 2019.

Acquisition of Cincinnati Global
As more fully discussed in Note 1, Accounting Policies and Note 14, Acquisition, we closed on the acquisition of Cincinnati Global during the first quarter of 2019. As a result of this acquisition, $59 million of net deferred tax assets were acquired or established at the acquisition date with an offsetting valuation allowance of $55 million.

Accounting guidance requires deferred tax assets to be reduced by a valuation allowance when management believes it is more likely than not that some, or all, of the deferred tax assets will not be realized. After considering all positive and negative evidence related to the Cincinnati Global operations, we believe it was appropriate to set up a valuation allowance for purposes of our opening Cincinnati Global balance sheet.

The purchase price allocation to our Cincinnati Global deferred tax assets and corresponding valuation allowance is subject to further post-closing adjustments based on the actual net asset value (NAV) of Cincinnati Global and its subsidiaries at closing, pursuant to the procedures set forth in the sale and purchase agreement.

As a result of the first half year operations, there were immaterial changes to the Cincinnati Global valuation allowance as of June 30, 2019.

As of June 30, 2019, Cincinnati Global had operating loss carryforwards of $178 million which are subject to certain limitations. These Cincinnati Global losses can only be utilized within the Cincinnati Global group and cannot offset the income of our CFC group. Other than the Cincinnati Global loss carryforwards, we had no other operating or capital loss carryforwards as of June 30, 2019.