Income Taxes (Tables)

9 Months Ended

Sep. 30, 2017

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Income tax rate reconciliation from statutory to effective tax rate

	Three Months Ended September 30,				Nine Months Ended September 30,
In millions	2017		2016		2017		2016
Income (loss) before income taxes	$	(273)	$	55	$	(603)	$	(101)
Provision (benefit) for income taxes	$	(6)	$	24	$	965	$	(28)
Effective tax rate		2.2%		43.6%		-160.0%		27.7%

Deferred tax assets and liabilities

		As of
In millions		September 30, 2017		December 31, 2016
Deferred tax liabilities:
	Unearned premium revenue	$	139	$	143
	Deferral of cancellation of indebtedness income		28		46
	Deferred acquisition costs		34		42
	Net gains on financial instruments at fair value and foreign exchange		-		4
	Net unrealized gains in accumulated other comprehensive income		10		-
	Partnership basis difference		29		36
	Basis difference in foreign subsidiaries		1		64
	Net deferred taxes on VIEs		13		-
	Other		28		27
Total gross deferred tax liabilities			282		362
Deferred tax assets:
	Compensation and employee benefits		15		19
	Accrued interest		208		177
	Loss and loss adjustment expense reserves		121		142
	Net operating loss		996		929
	Foreign tax credits		62		7
	Other-than-temporary impairments		28		4
	Net unrealized losses on insured derivatives		28		29
	Net losses on financial instruments at fair value and foreign exchange		30		-
	Net unrealized losses in accumulated other comprehensive income		-		6
	Alternative minimum tax credit carryforward		30		26
Total gross deferred tax assets			1,518		1,339
	Valuation allowance		1,236		7
Net deferred tax asset		$	-	$	970