Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Text Block [Abstract]

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

	Years Ended December 31,
In millions	2017		2016		2015
Domestic	$	(638)	$	(362)	$	303
Foreign		(23)		23		(14)
Income (loss) before income taxes	$	(661)	$	(339)	$	289

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

		Years Ended December 31,
In millions		2017		2016		2015
Current taxes:
	Federal	$	4	$	4	$	-
	State		-		1		1
	Foreign		-		-		2
Deferred taxes:
	Federal		945		(8)		97
	Foreign		(5)		2		9
Provision (benefit) for income taxes			944		(1)		109
Income taxes charged (credited) to shareholders' equity related to:
	Change in unrealized gains (losses) on AFS securities		(1)		8		(30)
	Change in AFS securities with OTTI		1		5		-
	Change in foreign currency translation		21		1		(14)
	Share-based compensation		-		-		9
Total income taxes charged (credited) to shareholders' equity			21		14		(35)
Total effect of income taxes		$	965	$	13	$	74

Income tax rate reconciliation from statutory to effective tax rate

		Years Ended December 31,
		2017	2016	2015
Federal income tax computed at the statutory rate		35.0%	35.0%	35.0%
Increase (reduction) in taxes resulting from:
	Tax Reform/Change in Tax Rate	(71.4)%	0.0%	0.0%
	Mark-to-market on warrants	1.4%	(1.5)%	(1.2)%
	Change in valuation allowance	(116.9)%	(2.2)%	0.0%
	Nondeductible compensation	0.0%	(1.4)%	2.7%
	Deferred inventory adjustments	0.8%	3.6%	0.0%
	Foreign Taxes	8.2%	0.0%	0.0%
	Basis difference in foreign subsidiary	0.0%	(33.0)%	0.0%
	Other	0.1%	(0.3)%	1.2%
Effective tax rate		(142.8)%	0.2%	37.7%

Deferred tax assets and liabilities

		As of
In millions		December 31, 2017		December 31, 2016
Deferred tax liabilities:
	Unearned premium revenue	$	75	$	143
	Deferral of cancellation of indebtedness income		14		46
	Deferred acquisition costs		21		42
	Net unrealized gains in accumulated other comprehensive income		-		4
	Partnership basis difference		11		36
	Basis difference in foreign subsidiaries		1		64
	Net deferred taxes on VIEs		38		-
	Other		-		27
Total gross deferred tax liabilities			160		362
Deferred tax assets:
	Compensation and employee benefits		11		19
	Accrued interest		131		177
	Loss and loss adjustment expense reserves		87		142
	Net operating loss		582		929
	Foreign tax credits		62		7
	Other-than-temporary impairments		22		4
	Net unrealized losses on insured derivatives		14		29
	Net losses on financial instruments at fair value and foreign exchange		13		-
	Net unrealized losses in accumulated other comprehensive income		5		6
	Alternative minimum tax credit carryforward		-		26
	Other		3		-
Total gross deferred tax assets			930		1,339
	Valuation allowance		770		7
Net deferred tax asset		$	-	$	970