INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2018

The provision for income taxes consisted of the following for the years ended December 31, 2018, 2017 and 2016:



	2018		2017		2016
	(in millions)
Current provision:
Federal	$	139	$	1,324	$	921
States and Puerto Rico	58		116		88
Total current provision	197		1,440		1,009
Deferred expense (benefit)	194		132		(71		)
Provision for income taxes	$	391	$	1,572	$	938

Provision for Income Taxes Using Federal Statutory Rate

The provision for income taxes was different from the amount computed using the federal statutory rate for the years ended December 31, 2018, 2017 and 2016 due to the following:



	2018			2017			2016
	(in millions)
Income tax provision at federal statutory rate	$	436		$	1,407		$	543
States, net of federal benefit, and Puerto Rico	42			80			41
Tax exempt investment income	(11		)	(22		)	(20		)
Health insurance industry fee	243			—			336
Nondeductible executive compensation	17			36			30
Tax reform	(39		)	133			—
KMG sale	(272		)	—			—
Other, net	(25		)	(62		)	8
Provision for income taxes	$	391		$	1,572		$	938

Principal Components of Net Deferred Tax Balances

Principal components of our net deferred tax balances at December 31, 2018 and 2017 were as follows:



	Assets (Liabilities)
	2018			2017
	(in millions)
Compensation and other accrued expense	$	89		$	138
Benefits payable	79			113
Investment securities	44			—
Net operating loss carryforward	38			53
Capital loss carryforward	15			—
Deferred acquisition costs	17			48
Unearned revenues	9			12
Other	8			1
Future policy benefits payable	—			231
Total deferred income tax assets	299			596
Valuation allowance	(54		)	(49		)
Total deferred income tax assets, net of valuation allowance	245			547
Depreciable property and intangible assets	(273		)	(237		)
Prepaid expenses	(52		)	(44		)
Future policy benefits payable	(5		)	—
Investment securities	—			(49		)
Total deferred income tax liabilities	(330		)	(330		)
Total net deferred income tax assets/(liabilities)	$	(85	)	$	217