Income Taxes (Tables)

12 Months Ended

Dec. 31, 2015

Text Block [Abstract]

Income (loss) from operations before provision (benefit) for income taxes

	Years Ended December 31,
In millions	2015		2014		2013
Domestic	$	303	$	574	$	435
Foreign		(14)		67		(19)
Income (loss) before income taxes	$	289	$	641	$	416

Income tax expense (benefit) on income (loss) and shareholder' equity

		Years Ended December 31,
In millions		2015		2014		2013
Current taxes:
	Federal	$	-	$	-	$	-
	State		1		10		8
	Foreign		2		12		1
Deferred taxes:
	Federal		97		48		165
	Foreign		9		2		(8)
Provision (benefit) for income taxes			109		72		166
Income taxes charged (credited) to shareholders' equity related to:
	Change in unrealized gains (losses) on AFS securities		(30)		89		(81)
	Change in AFS securities with OTTI		-		(29)		4
	Change in foreign currency translation		(14)		(13)		1
	Share-based compensation		9		2		4
Total income taxes charged (credited) to shareholders' equity			(35)		49		(72)
Total effect of income taxes		$	74	$	121	$	94

Income tax rate reconciliation from statutory to effective tax rate

		Years Ended December 31,
		2015	2014	2013
Federal income tax computed at the statutory rate		35.0%	35.0%	35.0%
Increase (reduction) in taxes resulting from:
	Mark-to-market on warrants	(1.2)%	(1.6)%	3.8%
	Change in valuation allowance	0.0%	(13.5)%	(12.6)%
	Change in uncertain tax positions	0.0%	(9.1)%	2.8%
	Non deductible compensation	2.7%	0.0%	0.0%
	Basis difference in foreign subsidiary	0.0%	0.0%	11.4%
	Other	1.2%	0.4%	(0.5)%
Effective tax rate		37.7%	11.2%	39.9%

Deferred tax assets and liabilities

		As of December 31,
In millions		2015		2014
Deferred tax liabilities:
	Unearned premium revenue	$	159	$	196
	Deferral of cancellation of indebtedness income		68		91
	Deferred acquisition costs		56		72
	Net unrealized gains in accumulated other comprehensive income		-		4
	Partnership basis difference		30		45
	Basis difference in foreign subsidiaries		40		59
	Other		91		55
Total gross deferred tax liabilities			444		522
Deferred tax assets:
	Compensation and employee benefits		19		30
	Accrued interest		137		99
	Loss and loss adjustment expense reserves		119		69
	Net operating loss and tax credit carryforwards		972		1,150
	Other-than-temporary impairments		5		6
	Net unrealized losses on insured derivatives		35		93
	Net losses on financial instruments at fair value and foreign exchange		45		37
	Net unrealized losses in accumulated other comprehensive income		15		-
	Alternative minimum tax credit carryforward		22		22
	Net deferred taxes on VIEs		14		25
Total gross deferred tax assets			1,383		1,531
	Valuation allowance		-		-
Net deferred tax asset		$	939	$	1,009

Change in unrecognized tax benefit

In millions
Unrecognized tax benefit as of January 1, 2013		$	47
The gross amount of the increase/(decrease) in the UTB as a result of tax positions taken:
	During a prior year		18
The amounts of decreases in the UTB as a result of the applicable statute of limitations			-
Unrecognized tax benefit as of December 31, 2013		$	65
The gross amount of the increase/(decrease) in the UTB as a result of tax positions taken:
	During a prior year		(61)
	During the current year		-
The amounts of decreases in the UTB related to settlements with taxing authorities			(4)
Unrecognized tax benefit as of December 31, 2014		$	-
The gross amount of the increase/(decrease) in the UTB as a result of tax positions taken:
	During the current year		-
The amounts of decreases in the UTB related to settlements with taxing authorities			-
The reduction in the UTB as a result of the applicable statute of limitations			-
Unrecognized tax benefit as of December 31, 2015		$	-