Income Taxes (Notes)

3 Months Ended

Mar. 31, 2018

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Income tax provision as a percentage of income before income from investment in unconsolidated affiliate was 24.9% and 31.7% in the first quarter of 2018 and 2017, respectively. The lower rate in the first quarter of 2018 was primarily attributable to the enactment of the Tax Act, which reduced the U.S federal corporate tax rate from 35 percent to 21 percent beginning in 2018, and is further described below. The rate in the first quarter of 2018 included $78 million of income tax expense associated with the $232 million gain on the sale of a 55% interest of the Company’s Lending Solutions business. The rate in the first quarter of 2017 included $9 million of income tax expense associated with the Company’s share of the gain on the sale of a business at StoneRiver.

On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act. The Tax Act makes broad changes to the U.S. tax code, including, but not limited to, (1) reducing the U.S. federal corporate tax rate from 35 percent to 21 percent beginning in 2018; (2) requiring companies to pay a one-time transition tax on certain un-repatriated earnings of foreign subsidiaries; (3) generally eliminating U.S. federal income taxes on dividends from foreign subsidiaries; (4) requiring U.S. federal taxable income to include certain earnings of controlled foreign corporations; and (5) creating a new limitation on deductible interest expense.

During the first quarter of 2018, there have been no changes to the provisional adjustments recorded in 2017 as a result of the Tax Act. The Company’s accounting for certain elements of the Tax Act continues to be evaluated; however, any associated impacts are not expected to be material.