A reconciliation of the tax provision at the U.S. federal statutory rate to the provision (benefit) for income taxes is as follows:



	Three Months Ended March 31,
	2016			2015
Tax provision at U.S. federal statutory rate	$	133		$	219
Tax-exempt interest	(32		)	(34		)
Dividends-received deduction ("DRD")	(22		)	(23		)
Decrease in valuation allowance [1]	(25		)	(1		)
Other	4			(3		)
Provision for income taxes	$	58		$	158


[1]	Income tax benefit from partial reduction of capital loss carryover valuation allowance in the three months ended March 31, 2016 is due to taxable gains on the termination of certain derivatives during the period.

The separate account DRD is estimated for the current year using information from the most recent return, adjusted for current year equity market performance and other appropriate factors, including estimated levels of corporate dividend payments and level of policy owner equity account balances. The actual current year DRD can vary from estimates based on, but not limited to, changes in eligible dividends received in the mutual funds, amounts of distribution from these mutual funds, amounts of short-term capital gains at the mutual fund level and the Company’s taxable income before the DRD. The Company evaluates its DRD computations on a quarterly basis.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:



	Three Months Ended March 31,
	2016		2015
Balance, beginning of period	$	12	$	48
Gross increases - tax positions in prior period	—		—
Gross decreases - tax positions in prior period	—		—
Balance, end of period	$	12	$	48

The entire amount of unrecognized tax benefits, if recognized, would affect the effective tax rate in the period of the release.

The federal audit of the years 2012 and 2013 began in March 2015 and is expected to be completed in 2016. Management believes that adequate provision has been made in the financial statements for any potential adjustments that may result from tax examinations and other tax-related matters for all open tax years.

Net deferred income taxes include the future tax benefits associated with the net operating loss carryover, foreign tax credit carryover, capital loss carryover, and alternative minimum tax credit carryover as follows:



	As of
	March 31, 2016				December 31, 2015				Expiration
	Carryover amount		Expected tax benefit, gross		Carryover amount		Expected tax benefit, gross		Dates			Amount
Net operating loss carryover - U.S.	$	5,097	$	1,784	$	5,182	$	1,814	2016	-	2020	$	4
									2023	-	2033	$	5,093
Net operating loss carryover - foreign	$	88	$	17	$	89	$	17	No expiration			$	88
Foreign tax credit carryover	$	146	$	146	$	154	$	154	2019	-	2024	$	146
Capital loss carryover	$	151	$	53	$	222	$	78	2019			$	151
Alternative minimum tax credit carryover	$	639	$	639	$	639	$	639	No expiration			$	639

Net Operating Loss Carryover

Due to limitations on the use of certain losses, a valuation allowance of $1 has been established as of March 31, 2016 and $1 as of December 31, 2015, respectively, in order to recognize only the portion of net operating losses that will more likely than not be realized.

Utilization of these loss carryovers is dependent upon the generation of sufficient future taxable income. Most of the net operating loss carryover originated from the Company's U.S. and international annuity business, including from the hedging program. Given the continued runoff of the U.S. fixed and variable annuity business, the exposure to taxable losses from the Talcott Resolution business is significantly lessened. Given the expected earnings of its property and casualty, group benefits and mutual fund businesses, the Company expects to generate sufficient taxable income in the future to utilize its net operating loss carryover net of the recorded valuation allowance. Although the Company projects there will be sufficient future taxable income to fully recover the remainder of the loss carryover, the Company's estimate of the likely realization may change over time.

Alternative Minimum Tax Credit and Foreign Tax Credit Carryover

These credits are available to offset regular federal income taxes from future taxable income and although the Company believes there will be sufficient future regular federal taxable income, there can be no certainty that future events will not affect the ability to utilize the credits. Additionally, the use of the foreign tax credits generally depends on the generation of sufficient taxable income to first utilize all U.S. net operating loss carryover. However, the Company has identified and begun to purchase certain investments which allow for utilization of the foreign tax credits without first using the net operating loss carryover. Consequently, the Company believes it is more likely than not the foreign tax credit carryover will be fully realized. Accordingly, no valuation allowance has been provided on either the alternative minimum tax carryover or foreign tax credit carryover.

Capital Loss Carryover

Utilization of the capital loss carryover requires the Company to realize sufficient taxable capital gains. The Company concluded that it is more likely than not that the remaining capital loss carryover will not be utilized. Accordingly, the associated deferred tax asset valuation allowance was $53 and $78 as of March 31, 2016 and December 31, 2015, respectively.