Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

Current and Deferred Components of Income Tax Expense (Benefit)

The current and deferred components of income tax expense (benefit) are as follows:


Year Ended December 31	2014		2013		2012

(In millions)

Income tax expense (benefit):
Federal:
Current	$	370	$	705	$	180
Deferred		(23)		(232)		199
State and city:
Current		12		19		19
Deferred		6		1		5
Foreign		92		163		110

Total	$	457	$	656	$	513

Components of U.S. and Foreign Income and Reconciliation between Federal Income Tax Expense at Statutory Rates and Actual Income Tax Expense

The components of U.S. and foreign income before income tax and a reconciliation between the federal income tax expense at statutory rates and the actual income tax expense is as follows:


Year Ended December 31	2014		2013		2012

(In millions)

Income before income tax:
U.S.	$	1,499	$	1,945	$	1,534
Foreign		311		332		488

Total	$	1,810	$	2,277	$	2,022


Income tax expense at statutory rate	$	633	$	797	$	708
Increase (decrease) in income tax expense resulting from:
Exempt investment income		(121)		(99)		(86)
Foreign related tax differential		(48)		(117)		(152)
Amortization of deferred charges associated with intercompany rig sales to other tax jurisdictions		44		31		31
Taxes related to domestic affiliate		14		19		25
Partnership earnings not subject to taxes		(39)		(38)		(43)
Unrecognized tax benefit (expense)		(42)		66		6
Other (a)		16		(3)		24

Income tax expense	$	457	$	656	$	513

(a)	Includes state and local taxes, retroactive tax law changes, adjustments to prior year estimates and other non-deductible expenses.

Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits, Excluding Tax Carryforwards and Interest and Penalties

A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding tax carryforwards and interest and penalties, is as follows:


Year Ended December 31	2014		2013		2012

(In millions)

Balance at January 1	$	91	$	67	$	63
Additions based on tax positions related to the current year		6		2		4
Additions for tax positions related to a prior year				31		5
Reductions for tax positions related to a prior year		(35)		(7)		(5)
Lapse of statute of limitations		(5)		(2)

Balance at December 31	$	57	$	91	$	67

Summary of Deferred Tax Assets and Liabilities

The following table summarizes deferred tax assets and liabilities:


December 31	2014		2013

(In millions)

Deferred tax assets:
Insurance reserves:
Property and casualty claim and claim adjustment expense reserves	$	265	$	289
Unearned premium reserves		187		178
Receivables		37		53
Employee benefits		432		312
Life settlement contracts		46		46
Deferred retroactive reinsurance benefit		61		66
Net operating loss carryforwards		321		42
Tax credit carryforwards		93		27
Basis differential in investment in subsidiary		21		23
Discontinued operations				518
Other		161		200

Deferred tax assets		1,624		1,754


Deferred tax liabilities:
Deferred acquisition costs		(226)		(232)
Net unrealized gains		(469)		(361)
Property, plant and equipment		(1,132)		(1,076)
Basis differential in investment in subsidiary		(472)		(564)
Other liabilities		(204)		(198)

Deferred tax liabilities		(2,503)		(2,431)


Net deferred tax liability (a)	$	(879)	$	(677)

(a)	Includes $14 million and $39 million of deferred tax assets reflected in Other assets in our Consolidated Balance Sheets at December 31, 2014 and 2013.