Income Taxes (Tables)

6 Months Ended

Jun. 30, 2017

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Income tax rate reconciliation from statutory to effective tax rate

	Three Months Ended June 30,				Six Months Ended June 30,
In millions	2017		2016		2017		2016
Income (loss) before income taxes	$	(210)	$	(55)	$	(330)	$	(156)
Provision (benefit) for income taxes	$	1,019	$	(28)	$	971	$	(51)
Effective tax rate		-485.2%		50.9%		-294.2%		32.7%

Deferred tax assets and liabilities

		As of
In millions		June 30, 2017		December 31, 2016
Deferred tax liabilities:
	Unearned premium revenue	$	140	$	143
	Deferral of cancellation of indebtedness income		34		46
	Deferred acquisition costs		37		42
	Net gains on financial instruments at fair value and foreign exchange		-		4
	Partnership basis difference		29		36
	Basis difference in foreign subsidiaries		2		64
	Net deferred taxes on VIEs		14		-
	Other		34		23
Total gross deferred tax liabilities			290		358
Deferred tax assets:
	Compensation and employee benefits		17		19
	Accrued interest		198		177
	Loss and loss adjustment expense reserves		104		142
	Net operating loss		976		929
	Foreign tax credits		62		7
	Net unrealized losses on insured derivatives		29		29
	Net losses on financial instruments at fair value and foreign exchange		23		-
	Net unrealized losses in accumulated other comprehensive income		12		6
	Alternative minimum tax credit carryforward		26		26
Total gross deferred tax assets			1,447		1,335
	Valuation allowance		1,157		7
Net deferred tax asset		$	-	$	970