XML 45 R23.htm IDEA: XBRL DOCUMENT
v3.22.4

Income Taxes | 12 Months Ended
--- | ---
Dec. 31, 2022
Income Tax Disclosure [Abstract] |
Income Taxes | NOTE 14. Income Taxes: For the years ended December 31, 2022, 2021 and 2020, domestic and foreign pretax income, before noncontrolling interests, were $268 million and $58 million, $1.5 billion and $93 million, and $850 million and $73 million, respectively. Income taxes are summarized as follows:
|  | Year ended December 31, |
|  | 2022 |  |  | 2021 |  |  | 2020 |
|  | (in millions) |
Current: |  |  |  |  |  |  |  |  |
Federal |  | $ | 132 |  |  | $ | 244 |  |  | $ | 191 |
State |  |  | 19 |  |  |  | 37 |  |  |  | 27 |
Foreign |  |  | 18 |  |  |  | 20 |  |  |  | 12 |
|  |  | 169 |  |  |  | 301 |  |  |  | 230 |
Deferred: |  |  |  |  |  |  |  |  |
Federal |  |  | (80 | ) |  |  | 65 |  |  |  | (18 | )
State |  |  | (25 | ) |  |  | 24 |  |  |  | 1 |
Foreign |  |  | (3 | ) |  |  | 3 |  |  |  | 10 |
|  |  | (108 | ) |  |  | 92 |  |  |  | (7 | )
|  | $ | 61 |  |  | $ | 393 |  |  | $ | 223 |
The Company’s actual income tax expense differs from the expense computed by applying the federal income tax rate of 21% for the years ended December 31, 2022, 2021 and 2020. A reconciliation of these differences is as follows:
|  | Year ended December 31, |
|  | 2022 |  |  | 2021 |  |  | 2020 |
|  | (dollars in millions) |
Taxes calculated at federal rate |  | $ | 68 |  |  |  | 21.0 | % |  | $ | 345 |  |  |  | 21.0 | % |  | $ | 194 |  |  |  | 21.0 | %
State taxes, net of federal benefit |  |  | (5 | ) |  |  | (1.5 | ) |  |  | 48 |  |  |  | 2.9 |  |  |  | 22 |  |  |  | 2.4 |
Change in liability for tax positions |  |  | (1 | ) |  |  | (0.3 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Foreign income taxed at different rates |  |  | 2 |  |  |  | 0.6 |  |  |  | 1 |  |  |  | 0.1 |  |  |  | 5 |  |  |  | 0.6 |
Unremitted foreign earnings |  |  | — |  |  |  | — |  |  |  | 1 |  |  |  | 0.1 |  |  |  | (2 | ) |  |  | (0.2 | )
Other items, net |  |  | (3 | ) |  |  | (1.1 | ) |  |  | (2 | ) |  |  | (0.2 | ) |  |  | 4 |  |  |  | 0.3 |
|  | $ | 61 |  |  |  | 18.7 | % |  | $ | 393 |  |  |  | 23.9 | % |  | $ | 223 |  |  |  | 24.1 | %
The Company’s effective income tax rates (income tax expense as a percentage of income before income taxes) were 18.7%, 23.9%, and 24.1% for the years ended December 31, 2022, 2021, and 2020, respectively. The effective income tax rates differ from the federal statutory rate as a result of state and foreign income taxes for which the Company is liable, as well as permanent differences between amounts reported for financial statement purposes and amounts reported for income tax purposes, including the recognition of excess tax benefits or tax deficiencies associated with share-based payment transactions through income tax expense. The effective income tax rate for 2022 also reflects the impact on pretax earnings from losses and impairments on equity investments and benefits from the resolution of state tax matters from prior years. The effective tax rates for 2021 and 2020 also reflect benefits related to foreign tax law changes and, for 2020, also reflects the impairment of nondeductible goodwill relating to the wind-down of the Company’s property and casualty insurance business. The primary components of temporary differences that give rise to the Company’s net deferred tax liability are as follows:
|  | December 31, |
|  | 2022 |  |  | 2021 |
|  | (in millions) |
Deferred tax assets: |  |  |  |  |  |
Deferred revenue |  | $ | 8 |  |  | $ | 11 |
Employee benefits |  |  | 97 |  |  |  | 102 |
Bad debt reserves |  |  | 12 |  |  |  | 7 |
Pension |  |  | 13 |  |  |  | 30 |
Net operating loss carryforward |  |  | 29 |  |  |  | 10 |
Foreign tax credit |  |  | 5 |  |  |  | 4 |
Operating lease liabilities |  |  | 59 |  |  |  | 58 |
Payroll taxes |  |  | — |  |  |  | 5 |
Securities |  |  | 264 |  |  |  | — |
Other |  |  | 10 |  |  |  | 6 |
|  |  | 497 |  |  |  | 233 |
Valuation allowance |  |  | (7 | ) |  |  | (8 | )
|  |  | 490 |  |  |  | 225 |
Deferred tax liabilities: |  |  |  |  |  |
Depreciable and amortizable assets |  |  | 282 |  |  |  | 274 |
Claims and related salvage |  |  | 82 |  |  |  | 89 |
Investments in affiliates |  |  | 26 |  |  |  | 63 |
Securities |  |  | — |  |  |  | 65 |
Operating lease assets |  |  | 53 |  |  |  | 52 |
Unremitted foreign earnings |  |  | 12 |  |  |  | 13 |
|  |  | 455 |  |  |  | 556 |
Net deferred tax asset (liability) |  | $ | 35 |  |  | $ | (331 | )
On August 16, 2022, the Inflation Reduction Act was signed into law. The Inflation Reduction Act includes various tax provisions, which are effective for tax years beginning on or after January 1, 2023. While the Company is still evaluating these tax law changes, it does not expect them to have a material impact on its consolidated financial statements. The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which was signed into law in 2020, allowed employers to defer payment of a portion of payroll taxes otherwise due on wages paid between the enactment date and December 31, 2020 and remit the deferred payroll taxes on December 31, 2021 and December 31, 2022. Under this provision of the CARES Act, the Company deferred $49 million in payroll taxes for 2020 and recorded the tax impact of $12 million as a deferred tax asset. As of December 31, 2022, the Company has remitted all of its deferred payroll taxes and has no remaining deferred tax asset. The vesting of RSUs represents a tax benefit that has been reflected as a reduction to income taxes payable and income tax expense for the years ended December 31, 2022, 2021 and 2020. The benefits recorded were $2 million, $2 million and $4 million for the years ended December 31, 2022, 2021 and 2020, respectively. At December 31, 2022, the Company had available a $4 million foreign tax credit carryover, net of a valuation allowance, and expects to utilize this credit within the carryover period. At December 31, 2022, the Company had available net operating loss carryforwards for income tax purposes totaling $196 million, consisting of federal, state and foreign losses of $85 million, $86 million and $25 million, respectively. Of the aggregate net operating losses, $107 million has an indefinite expiration. The Company evaluates the realizability of its deferred tax assets by assessing the valuation allowance and makes adjustments to the allowance as necessary. The factors used by the Company in assessing the likelihood of realization of its deferred tax assets include forecasts of future taxable income and available tax planning strategies that could be implemented. The Company’s ability to achieve forecasted taxable income in the applicable taxing jurisdictions could affect the ultimate realization of its deferred tax assets. At December 31, 2022 and 2021, the Company carried a valuation allowance of $7 million and $8 million, respectively, of which $6 million and $7 million, respectively, related to net operating losses and the remaining $1 million related to other deferred tax assets. The decrease in the overall valuation allowance during 2022 was primarily due to the reversal of the allowance previously provided against certain foreign net operating losses and other deferred tax assets. Based on future operating results in certain jurisdictions, it is possible that the current valuation allowance positions of those jurisdictions could be adjusted during the next 12 months. As of December 31, 2022, 2021 and 2020, the liability for income taxes associated with uncertain tax positions was $3 million, $8 million and $7 million, respectively. The net decrease in the liability in 2022 from 2021 was primarily attributable to the resolution of state tax matters from prior years and the net increase in the liability in 2021 from 2020 was primarily attributable to positions taken on the Company’s tax returns for prior years. The liabilities could be reduced by $2 million, $3 million and $2 million as of December 31, 2022, 2021 and 2020, respectively, due to offsetting tax benefits associated with the correlative effects of potential adjustments, including timing adjustments and state income taxes. The net liability, if recognized, would favorably affect the Company’s effective income tax rate. A reconciliation of the beginning and ending amounts of unrecognized tax benefits for the years ended December 31, 2022, 2021 and 2020 is as follows:
|  | Year ended December 31, |
|  | 2022 |  |  | 2021 |  |  | 2020 |
|  | (in millions) |
Unrecognized tax benefits—beginning balance |  | $ | 8 |  |  | $ | 7 |  |  | $ | 1 |
Gross increases (decreases)—prior period tax positions |  |  | — |  |  |  | — |  |  |  | 5 |
Gross increases—current period tax positions |  |  | 1 |  |  |  | 1 |  |  |  | 1 |
Settlements with taxing authorities |  |  | (6 | ) |  |  | — |  |  |  | — |
Unrecognized tax benefits—ending balance |  | $ | 3 |  |  | $ | 8 |  |  | $ | 7 |
The Company’s continuing practice is to recognize interest and penalties related to uncertain tax positions in income tax expense. Accrued interest and penalties, net of tax benefits, related to uncertain tax positions were no t material as of December 31, 2022, 2021 and 2020. The Company, or one of its subsidiaries, files income tax returns in the U.S. federal jurisdiction, various state jurisdictions and various non-U.S. jurisdictions. The primary non-federal jurisdictions are California, Canada, India and the United Kingdom. As of December 31, 2022, the Company is, generally, no longer subject to U.S. federal and state income tax examinations for years prior to 2019, and, for non-U.S. jurisdictions, income tax examinations for years prior to 2014. It is reasonably possible that the amount of the unrecognized benefit with respect to certain of the Company’s unrecognized tax positions may increase or decrease within the next 12 months. Any such change may be the result of ongoing audits or the expiration of federal and state statutes of limitations for the assessment of taxes. The Company records a liability for potential tax assessments based on its estimate of the potential exposure. New tax laws and new interpretations of laws and rulings by taxing authorities may affect the liability for potential tax assessments. Due to the subjectivity and complex nature of the underlying issues, actual payments or assessments may differ from estimates. To the extent that the Company’s estimates differ from actual payments or assessments, income tax expense is adjusted. The Company’s income tax returns in several jurisdictions are being examined by various taxing authorities. The Company believes that adequate amounts of tax and related interest from any adjustments that may result from these examinations have been provided for.

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