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Income Taxes | 12 Months Ended
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Dec. 31, 2017
Income Tax Disclosure [Abstract] |
Income Taxes | The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions, as applicable. Income (loss) from continuing operations before income taxes included income from domestic operations of $704, $521 and $1,517 for the years ended December 31, 2017, 2016 and 2015, and income (losses) from foreign operations of $19, $(74) and $(39) for the years ended December 31, 2017, 2016 and 2015. Tax Reform On December 22, 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (“Tax Reform”). Tax Reform establishes new tax laws that will affect 2018, including, but not limited to, (1) reduction of the U.S. federal corporate income tax rate from 35% to 21%; (2) elimination of the corporate alternative minimum tax (AMT) and changing how existing AMT credits can be realized, (3) limitations on the deductibility of certain executive compensation, (4) changes to the discounting of statutory reserves for tax purposes, and (5) limitations on net operating losses (NOLs) generated after December 31, 2017 though there is no impact to the Company’s current NOL carryforwards. In connection with our initial analysis of the impact of Tax Reform, the Company recorded a provisional net income tax expense of $877 in the period ending December 31, 2017. This net expense consists of a $821 reduction of The Company’s deferred tax assets primarily due to the reduction in the U.S. federal corporate income tax rate and a $56 sequestration fee payable associated with refundable AMT credits. Net of the sequestration fee payable, the Company's AMT credits of $790 have been reclassified to a current income tax receivable. Tax reform allows for the refund of AMT credits over time but no later than 2022. For components where we have made provisional estimates of the impact of Tax Reform, future guidance could change these estimates, particularly the estimated amount of sequestration fee payable. Adjustments to income tax expense, if any, will be made in the period the adjustments become known in 2018. Income Tax Expense (Benefit)
| For the years ended December 31,
| 2017 | 2016 | 2015
Income Tax Expense (Benefit) |  |  |
Current - U.S. Federal | $ | 116 |  | $ | 10 |  | $ | (91 | )
International | 1 |  | — |  | 3 |
Total current | 117 |  | 10 |  | (88 | )
Deferred - U.S. Federal | 866 |  | (173 | ) | 377 |
International | 2 |  | (3 | ) | — |
Total deferred | 868 |  | (176 | ) | 377 |
Total income tax expense (benefit) | $ | 985 |  | $ | (166 | ) | $ | 289 |
Deferred tax assets and liabilities on the consolidated balance sheets represent the tax consequences of differences between the financial reporting and tax basis of assets and liabilities. The deferred tax assets and liabilities as of December 31, 2017 shown in the table below reflect the reduction in deferred taxes required as a result of Tax Reform. In addition, as a result of entering into a definitive agreement to sell the life and annuity run-off business, deferred tax balances that will be transferred to the buyer have been removed from the following table and are included in assets held for sale. Included in deferred taxes as of December 31, 2017 are deferred tax assets of the life and annuity run-off business that will be retained by the Company, including $437 for the tax effect of net operating loss carryovers, and $23 of foreign tax credits. While the Company recognized a pre-tax loss of $3.3 billion on the sale of the life and annuity run-off business in 2017, the Company did not record a tax benefit on the sale. Rather the Company plans to elect to retain tax net operating loss carryovers in lieu of recognizing a tax capital loss in 2018. Deferred Tax Assets (Liabilities)
| As of December 31,
| 2017 | 2016
Deferred Tax Assets |  |
Loss reserves and tax discount | $ | 104 |  | $ | 262 |
Unearned premium reserve and other underwriting related reserves | 352 |  | 384 |
Investment-related items | 194 |  | 458 |
Employee benefits | 313 |  | 508 |
Alternative minimum tax credit [1] | — |  | 640 |
General business credit carryover | 3 |  | 99 |
Net operating loss carryover | 710 |  | 1,458 |
Foreign tax credit carryover | 26 |  | 56 |
Other | 1 |  | — |
Total Deferred Tax Assets | 1,703 |  | 3,865 |
Deferred Tax Liabilities |  |
Deferred acquisition costs | (103 | ) | (176 | )
Net unrealized gains on investments | (306 | ) | (348 | )
Other depreciable and amortizable assets | (130 | ) | (243 | )
Other | — |  | (99 | )
Total Deferred Tax Liabilities | (539 | ) | (866 | )
Net Deferred Tax Asset | $ | 1,164 |  | $ | 2,999 |
[1]As of December 31, 2017, alternative minimum tax credits of $790 have been reclassified as a current tax receivable. See further discussion below. A deferred tax valuation allowance has not been recorded because the Company believes the deferred tax assets will more likely than not be realized. In assessing the need for a valuation allowance, management considered future taxable temporary difference reversals, future taxable income exclusive of reversing temporary differences and carryovers, taxable income in open carry back years and other tax planning strategies. From time to time, tax planning strategies could include holding a portion of debt securities with market value losses until recovery, altering the level of tax exempt securities held, making investments which have specific tax characteristics, and business considerations such as asset-liability matching. Management views such tax planning strategies as prudent and feasible and would implement them, if necessary, to realize the deferred tax assets. As shown in the deferred tax assets (liabilities) table above, included in net deferred income taxes are the future tax benefits associated with the net operating loss carryover, foreign tax credit carryover, capital loss carryover, alternative minimum tax credit carryover, and general business credit carryover. Future Tax Benefits
| As of |
| December 31, 2017 | Expiration
| Carryover amount | Expected tax benefit, gross | Dates | Amount
Net operating loss carryover - U.S. | $ | 3,380 |  | $ | 710 |  | 2020 | $ | 1 |
|  |  | 2023 | - | 2036 | $ | 3,379 |
Net operating loss carryover - foreign | $ | 3 |  | $ | — |  | No expiration | $ | 3 |
Foreign tax credit carryover | $ | 26 |  | $ | 26 |  | 2023 | - | 2024 | $ | 26 |
Alternative minimum tax credit carryover | $ | 790 |  | $ | 790 |  | No expiration | $ | — |
General business credit carryover | $ | 3 |  | $ | 3 |  | 2031 | - | 2037 | $ | 3 |
Net Operating Loss Carryover NOLs reflected above arose in taxable years prior to 2017 and are still subject to prior tax law which allows for carryback and limits the period over which carryforwards may be used to offset taxable income as shown in the above table. Utilization of the Company's 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. The U.S. net operating loss carryover in the table above included $437 of NOL's of the life and annuity run-off business that the Company will retain. Given the expected earnings of the Company going forward, including 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. 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. Tax Credit Carryovers Alternative Minimum Tax Credits- As noted above, because AMT credits are refundable, the Company reflected AMT credits, net of a sequestration fee payable, as a current tax receivable at its undiscounted amount and they are no longer included as deferred tax assets. Foreign Tax Credits- These credits are available to offset regular federal income taxes from future taxable income. The use of these credits prior to expiration depends on the generation of sufficient taxable income to first utilize all U.S. net operating loss carryovers. However, the Company has purchased 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. Income Tax Rate Reconciliation
| For the years ended December 31,
| 2017 | 2016 | 2015
Tax provision at U.S. federal statutory rate | $ | 253 |  | $ | 157 |  | $ | 517 |
Tax-exempt interest | (123 | ) | (124 | ) | (132 | )
Decrease in deferred tax valuation allowance | — |  | (79 | ) | (102 | )
Stock-based compensation | (15 | ) | — |  | — |
Solar credits | — |  | (79 | ) | — |
Sale of HFPI and foreign rate differential | 5 |  | (37 | ) | — |
Tax Reform | 877 |  | — |  | — |
Other | (12 | ) | (4 | ) | 6 |
Provision (benefit) for income taxes | $ | 985 |  | $ | (166 | ) | $ | 289 |
In addition to the effect of tax-exempt interest, the Company's effective tax rate for the year ended December 31, 2017 reflects a federal income tax benefit of $15 related to a deduction for stock-based compensation that vested at a fair value per share greater than the fair value on the date of grant. The Company recognized an $877 increase in income tax expense in 2017 due to the effects of Tax Reform, primarily due to the reduction in net deferred tax assets as a result of the reduction in the Federal corporate income tax rate from 35% to 21%. Additionally, reflected above is a benefit of $79 in 2016 due to the investment in solar energy partnerships. The total tax benefit from the transaction was $113 which includes the tax effects of the related financial statement realized loss from writing down the investments in the partnerships. Also included in 2016 is a tax benefit primarily due to the sale of the Company's U.K. property and casualty run-off subsidiaries. The tax benefit of $37 relates to the difference between the tax basis and book basis of the Company's investment in the subsidiaries net of additional foreign tax rate differentials. The total estimated tax benefit recognized in 2016 related to the sale of the U.K. property and casualty run-off subsidiaries was $76. For discussion of this transaction, see Note 20 - Business Dispositions and Discontinued Operations of Notes to Consolidated Financial Statements. Roll-forward of Unrecognized Tax Benefits
| For the years ended December 31,
| 2017 | 2016 | 2015
Balance, beginning of period | $ | 12 |  | $ | 12 |  | $ | 48 |
Gross increases - tax positions in prior period | 3 |  | — |  | 12 |
Gross decreases - tax positions in prior period | — |  | — |  | (48 | )
Gross decreases - tax reform | (6 | ) | — |  | — |
Balance, end of period | $ | 9 |  | $ | 12 |  | $ | 12 |
The entire amount of unrecognized tax benefits, if recognized, would affect the effective tax rate in the period of the release. As of December 31, 2017, the Company had a current income tax receivable of $811, including $790 of AMT credits receivable which consist of $846 of AMT credits offset by a $56 sequestration fee payable. As of December 31, 2016, the Company had a current income tax receivable of $141. The federal audit of the years 2012 and 2013 was completed as of March 31, 2017 with no additional adjustments. The federal audit of The Company's recently acquired subsidiary Maxum for the 2014 tax year was completed as of December 31, 2017 with no adjustments. Management believes that adequate provision has been made in the consolidated financial statements for any potential adjustments that may result from tax examinations and other tax-related matters for all open tax years. The Company classifies interest and penalties (if applicable) as income tax expense in the consolidated financial statements. The Company recognized no interest expense for the years ended December 31, 2017, 2016 and 2015. The Company had no interest payable as of December 31, 2017 and 2016. The Company does not believe it would be subject to any penalties in any open tax years and, therefore, has not recorded any accrual for penalties.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 + Details
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