Income Taxes (Tables)

12 Months Ended

Dec. 31, 2016

Text Block [Abstract]

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

	Years Ended December 31,
In millions	2016		2015		2014
Domestic	$	(362)	$	303	$	574
Foreign		23		(14)		67
Income (loss) before income taxes	$	(339)	$	289	$	641

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

		Years Ended December 31,
In millions		2016		2015		2014
Current taxes:
	Federal	$	4	$	-	$	-
	State		1		1		10
	Foreign		-		2		12
Deferred taxes:
	Federal		(8)		97		48
	Foreign		2		9		2
Provision (benefit) for income taxes			(1)		109		72
Income taxes charged (credited) to shareholders' equity related to:
	Change in unrealized gains (losses) on AFS securities		8		(30)		89
	Change in AFS securities with OTTI		5		-		(29)
	Change in foreign currency translation		1		(14)		(13)
	Share-based compensation		-		9		2
Total income taxes charged (credited) to shareholders' equity			14		(35)		49
Total effect of income taxes		$	13	$	74	$	121

Income tax rate reconciliation from statutory to effective tax rate

		Years Ended December 31,
		2016	2015	2014
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	(1.5)%	(1.2)%	(1.6)%
	Change in valuation allowance	(2.2)%	0.0%	(13.5)%
	Change in uncertain tax positions	0.0%	0.0%	(9.1)%
	Non deductible compensation	(1.4)%	2.7%	0.0%
	Deferred inventory adjustments	3.6%	0.0%	0.0%
	Basis difference in foreign subsidiary	(33.0)%	0.0%	0.0%
	Other	(0.3)%	1.2%	0.4%
Effective tax rate		0.2%	37.7%	11.2%

Deferred tax assets and liabilities

		As of December 31,
In millions		2016		2015
Deferred tax liabilities:
	Unearned premium revenue	$	143	$	159
	Deferral of cancellation of indebtedness income		46		68
	Deferred acquisition costs		42		56
	Net gains on financial instruments at fair value and foreign exchange		4		-
	Partnership basis difference		36		30
	Basis difference in foreign subsidiaries		64		40
	Other		23		86
Total gross deferred tax liabilities			358		439
Deferred tax assets:
	Compensation and employee benefits		19		19
	Accrued interest		177		137
	Loss and loss adjustment expense reserves		142		119
	Net operating loss		929		963
	Foreign tax credits		7		9
	Net unrealized losses on insured derivatives		29		35
	Net losses on financial instruments at fair value and foreign exchange		-		45
	Net unrealized losses in accumulated other comprehensive income		6		15
	Alternative minimum tax credit carryforward		26		22
	Net deferred taxes on VIEs		-		14
Total gross deferred tax assets			1,335		1,378
	Valuation allowance		7		-
Net deferred tax asset		$	970	$	939

Change in unrecognized tax benefit

In millions
Unrecognized tax benefit as of January 1, 2014		$	65
The gross amount of the increase/(decrease) in the UTB as a result of tax positions taken:
	During a prior year		(61)
The amounts of decreases in the UTB as a result of the applicable statute of limitations			-
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 a prior year		-
	During the current year		-
The amounts of decreases in the UTB related to settlements with taxing authorities			-
Unrecognized tax benefit as of December 31, 2015		$	-
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, 2016		$	-