XML 31 R12.htm IDEA: XBRL DOCUMENT
v3.22.4

Federal Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2022
Federal Income Taxes [Abstract] |
Federal Income Taxes | 6. F ederal Income Taxes The federal income tax expense (benefit) on continuing operations (in millions) was as follows:
| For the Years Ended December 31, |
| 2022 |  | 2021 |  | 2020 |
Current | $ | 3 |  | $ | 12 |  | $ | (61 | )
Deferred |  | (587 | ) |  | 221 |  |  | (15 | )
Federal income tax expense (benefit) | $ | (584 | ) | $ | 233 |  | $ | (76 | )
A reconciliation of the effective tax rate differences (in millions) was as follows:
| For the Years Ended December 31, |
| 2022 |  | 2021 |  | 2020 |
Income (loss) before taxes | $ | (2,811 | ) | $ | 1,638 |  | $ | 423 |
Federal statutory rate |  | 21% |  |  | 21% |  |  | 21% |
Federal income tax expense (benefit) at federal statutory rate |  | (590 | ) |  | 344 |  |  | 89 |
Effect of: |  |  |  |  |  |  |  |  |
Tax-preferred investment income (1) |  | (90 | ) |  | (88 | ) |  | (98 | )
Tax credits |  | (42 | ) |  | (26 | ) |  | (39 | )
Excess tax benefits from stock-based compensation |  | (1 | ) |  | - |  |  | 3 |
Goodwill impairment |  | 133 |  |  | - |  |  | - |
Tax impact associated with the Tax Cuts and Jobs Act (2) |  | - |  |  | - |  |  | (37 | )
Other items |  | 6 |  |  | 3 |  |  | 6 |
Federal income tax expense (benefit) | $ | (584 | ) | $ | 233 |  | $ | (76 | )
Effective tax rate |  | 21% |  |  | 14% |  |  | -18% |
(1)Relates primarily to separate account dividends eligible for the dividends-received deduction. (2)In 2020, we recognized a $37 million tax benefit attributable to the carry back of a 2020 net operating loss under the provisions of the Coronavirus Aid, Relief, and Economic Security Act, which provides for a five-year carryback period. The federal income tax asset (liability) (in millions) was as follows:
| As of December 31, |
| 2022 |  | 2021 |
Current | $ | 83 |  | $ | 142 |
Deferred |  | 1,618 |  |  | (2,800 | )
Total federal income tax asset (liability) | $ | 1,701 |  | $ | (2,658 | )
Significant components of our deferred tax assets and liabilities (in millions) were as follows:
| As of December 31, |
| 2022 |  | 2021 |
Deferred Tax Assets |  |  |  |  |  |
Future contract benefits and other contract holder funds | $ | 700 |  | $ | 3,527 |
Reinsurance-related embedded derivative liability |  | - |  |  | 43 |
Compensation and benefit plans |  | 172 |  |  | 198 |
Intangibles |  | 18 |  |  | 25 |
Net unrealized loss on fixed maturity AFS securities |  | 2,236 |  |  | - |
Net unrealized loss on trading securities |  | 70 |  |  | - |
Investment activity |  | 243 |  |  | - |
Tax credits |  | 101 |  |  | 58 |
Net operating losses |  | 278 |  |  | 292 |
Other |  | 208 |  |  | 129 |
Total deferred tax assets | $ | 4,026 |  | $ | 4,272 |
Deferred Tax Liabilities |  |  |  |  |  |
DAC | $ | 1,813 |  | $ | 426 |
VOBA |  | 276 |  |  | 149 |
Net unrealized gain on fixed maturity AFS securities |  | - |  |  | 2,877 |
Net unrealized gain on trading securities |  | - |  |  | 66 |
Investment activity |  | - |  |  | 3,331 |
Reinsurance-related embedded derivative asset |  | 87 |  |  | - |
Other |  | 232 |  |  | 223 |
Total deferred tax liabilities | $ | 2,408 |  | $ | 7,072 |
Net deferred tax asset (liability) | $ | 1,618 |  | $ | (2,800 | )
As of December 31, 2022, we have $101 million of federal income tax credits that can be carried forward to 2030 through 2032. As of December 31, 2022, we have $1.3 billion of net operating losses to carry forward to future years. The net operating losses arose in tax years 2018 and 2021, and under the Tax Cuts and Jobs Act changes, have an unlimited carryforward period. As a result, management believes that it is more likely than not that the deferred tax asset associated with the loss carryforwards will be realized. Inclusive of the tax attribute for the net operating losses, although realization is not assured, management believes that it is more likely than not that we will realize the benefits of all our deferred tax assets, and, accordingly, no valuation allowance has been recorded. We are subject to examination by U.S. federal, state, local and non-U.S. income authorities. With few exceptions for limited scope review, we are no longer subject to U.S. federal examinations for years before 2019. In the first quarter of 2021, the Internal Revenue Service commenced an examination of our refund claims for 2014 and 2015 that is anticipated to be completed by the end of 2023. We are currently under examination by several state and local taxing jurisdictions; however, we do not expect these examinations will materially impact us. A reconciliation of the unrecognized tax benefits (in millions) was as follows:
| For the Years Ended |
| December 31, |
| 2022 |  | 2021 |
Balance as of beginning-of-year | $ | 53 |  | $ | 51 |
Increases for prior year tax positions |  | 5 |  |  | 2 |
Settlements for prior year tax positions |  | (6 | ) |  | - |
Balance as of end-of-year | $ | 52 |  | $ | 53 |
As of December 31, 2022 and 2021, $52 million and $53 million, respectively, of our unrecognized tax benefits presented above, if recognized, would have affected our federal income tax expense (benefit) and our effective tax rate. We anticipate that it is reasonably possible that unrecognized tax benefits associated with separate account dividends-received deduction and tax credits will decrease by $8 million by the end of 2023, upon the completion of the examination of our refund claims for 2014 and 2015. We recognize interest and penalties accrued, if any, related to unrecognized tax benefits as a component of tax expense. For the years ended December 31, 2022, 2021 and 2020, we recognized no interest and penalty expense (benefit), and there was no accrued interest and penalty expense related to the unrecognized tax benefits as of December 31, 2022 and 2021.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI https://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI https://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI https://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI https://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI https://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI https://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration