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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Schedule of Income before Income Tax, Domestic and Foreign

ncome (loss) before income taxes (pre-tax income (loss)) was as follows:

		Year Ended December 31,
(in millions)		2018				2017				2016
Domestic loss		$	(411	)		$	(91	)		$	(1,329	)
Foreign income		16				75				102
Loss Before Income Taxes		$	(395	)		$	(16	)		$	(1,227	)

Schedule of Components of Income Tax Expense (Benefit)

(benefit) for income taxes were as follows:

		Year Ended December 31,
(in millions)		2018				2017				2016
Federal Income Taxes
Current		$	35			$	4			$	(116	)
Deferred		(62		)		(233		)		(132		)
Foreign Income Taxes
Current		41				25				31
Deferred		(6		)		(3		)		(3		)
State Income Taxes
Current		20				8				1
Deferred		(7		)		6				(25		)
Total Benefit		$	21			$	(193	)		$	(244	)

Schedule of Effective Income Tax Rate Reconciliation

A reconciliation of the U.S. federal statutory income tax rate to the consolidated effective income tax rate was as follows:

		Year Ended December 31,
		2018			2017			2016
U.S. federal statutory income tax rate		21.0	%		35.0	%		35.0	%
Nondeductible expenses(1)		(3.7	)%		(104.0	)%		(19.0	)%
Effect of tax law changes		0.5	%		1,282.4	%		—	%
Change in valuation allowance for deferred tax assets		(1.7	)%		(39.5	)%		0.1	%
State taxes, net of federal benefit		(2.3	)%		1.2	%		1.8	%
Audit and other tax return adjustments		—	%		—	%		1.4	%
Tax-exempt income, credits and incentives		2.2	%		38.9	%		0.7	%
Foreign rate differential adjusted for U.S. taxation of foreign profits(2)		1.9	%		47.7	%		0.7	%
Divestitures(3)		(20.3	)%		(51.9	)%		—	%
Unrecognized tax benefits and other		(2.9	)%		(3.5	)%		(0.8	)%
Effective Income Tax Rate		(5.3	)%		1,206.3	%		19.9	%

 ____________

(1) In 2017, nondeductible expenses primarily related to officers life insurance.

(2) The “U.S. taxation of foreign profits” represents the U.S. tax, net of foreign tax credits, associated with actual and deemed repatriations of earnings from our non-U.S. subsidiaries.

Schedule of Allocation of Income Tax Expense Benefit

Total income tax expense (benefit) was allocated as follows:

		Year Ended December 31,
(in millions)		2018				2017				2016
Pre-tax income		$	21			$	(193	)		$	(244	)
Discontinued operations		—				3				—
Common shareholders' equity:
Changes in defined benefit plans		—				—				8
Stock option and incentive plans, net		—				—				—
Total Income Tax Expense (Benefit)		$	21			$	(190	)		$	(236	)

Summary of Income Tax Contingencies

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

(in millions)		2018				2017				2016
Balance at January 1		$	15			$	14			$	24
Additions related to current year		3				—				1
Additions related to prior years positions		5				—				—
Reductions related to prior years positions		—				—				(5		)
Settlements with taxing authorities(1)		(1		)		—				(5		)
Currency		(2		)		1				(1		)
Balance at December 31		$	20			$	15			$	14

_______________

(1) 2018 and 2016 settlement resulted in $1 million and $5 million cash paid, respectively.

Schedule of Deferred Tax Assets and Liabilities

The tax effects of temporary differences that give rise to significant portions of the deferred taxes were as follows:

		December 31,
(in millions)		2018				2017
Deferred Tax Assets
Net operating losses		$	46			$	41
Operating reserves, accruals and deferrals		68				85
Deferred compensation		16				59
Pension		2				15
Settlement reserves		67				18
Other		11				27
Subtotal		210				245
Valuation allowance		(44		)		(35		)
Total		$	166			$	210
Deferred Tax Liabilities
Unearned income		$	86			$	134
Intangibles and goodwill		341				413
Depreciation		30				5
Other		24				25
Total		$	481			$	577
Total Deferred Taxes, Net		$	(315	)		$	(367	)

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