XML 71 R18.htm IDEA: XBRL DOCUMENT
v2.4.0.8

Income Taxes | 3 Months Ended
--- | ---
Mar. 31, 2014
Text Block [Abstract] |
Income Taxes | Note 9: Income Taxes The Company's i n c o m e t a x e s a nd t he r e l a t e d e f f e c ti v e t a x r a t e s f o r t he three months ended March 31, 2014 a nd 2013 a re a s fo l l o ws:
|  |  | Three Months Ended March 31, |
In millions |  |  | 2014 |  |  |  | 2013 |
Income (loss) before income taxes |  | $ | 404 |  |  | $ | 215 |
Provision (benefit) for income taxes |  | $ | 148 |  |  | $ | 51 |
Effective tax rate |  |  | 36.6% |  |  |  | 23.7% |
For the three months ended March 31, 2014, the Company's effective tax rate applied to its pre-tax income was higher than the U.S. statutory tax rate primarily as a result of certain non tax deductible expenses and the i ncrease in the valuation allowance against its deferred tax asset. For the three months ended March 31, 2013, the Company's effective tax rate applied to its pre-tax income was lower than the U.S. statutory tax rate primarily as a result of the decrease in the valuation allowance against its deferred tax asset. The Company's provision for income taxes for interim financial periods is not based on an estimated annual effective rate due to the variability in fair value of its credit derivatives, which prevents the Company from projecting a reliable estimated annual effective tax rate and pretax income for the full year of 2014. A discrete calculation of the provision is calculated for each interim period. Deferred Tax Asset, Net of Valuation Allowance The Company establishes a valuation allowance against its deferred tax asset when it is more likely than not that all or a portion of the deferred tax asset will not be realized. All evidence, both positive and negative, needs to be identified and considered in making the determination. Future realization of the existing deferred tax asset ultimately depends, in part, on the generation of sufficient taxable income of appropriate character (for example, ordinary income versus capital gains) within the carryforward period available under the tax law. As of March 31, 2014, the Company reported a net deferred tax asset of $917 m illion which is net of a $95 million valuation allowance. As of March 31, 2014, the Company had a valuation allowance against a portion of the deferred tax asset related to losses from asset impairments. The valuation allowance as of March 31, 2014 reflects a n increase of $2 million from the December 31, 2013 valuation allowance of $93 million. The increase in the valuation allowance for the three months ended March 31, 2014 was primarily due to asset impairments which are characterized as capital. Tax Sharing A greement The Company has a tax sharing agreement among its members effective January 1, 1987. The agreement was amended and restated effective September 8, 2011 to change the method of calculating each domestic insurer's tax liability to the method permitted by paragraph 3(a) of Department Circular Letter #33 (1979). The agreement was submitted to the NYSDFS for review and non-disapproval pursuant to Section 1505 of the New York Insurance Law. Refer to “Note 2: Significant Accounting Policies” in the Notes to Consolidated Financial Statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2013, for further discussion on the Company's tax sharing agreement. A cc o u n t i n g f o r U n c e r t a i n t y i n I n c o m e T ax e s The C o m p a ny's po l i c y is t o r eco r d a n d d i s c l o s e an y c h an g e i n U T B an d r e l a t e d i n t e r es t a n d/or p e n a l t i e s t o i n c o m e t a x i n t h e co n s o l i d a t e d s t a t e m en t s o f o pe r a t i ons. The Company includes interest as a component of income tax expense. The amounts in the table below do not include accrued interest of $2 million. All amounts below are reflected before any applicable tax benefit.
In millions |  |  |
Unrecognized tax benefit as of December 31, 2013 |  | $ | 65
The gross amount of the increase/(decrease) in the UTB as a result of tax positions taken: |  |  |
| During a prior year |  |  | 0
| During the current year |  |  | 0
The amounts of decreases in the UTB related to settlements with taxing authorities |  |  | 0
The reduction in the UTB as a result of the applicable statute of limitations |  |  | 0
Unrecognized tax benefit as of March 31, 2014 |  | $ | 65
The Company does not anticipate any amount to reverse in the next twelve months based on settling certain issues. In 2013, the I nternal Revenue Service contacted the Company to review the 2011 consolidated return o f MBIA Inc. and its subsidiaries, for the purpose of determining whether to formally examine the tax return. To date no formal examination has been initiated. The U.K. tax authorities are currently auditing tax years 2005 through 201 1. On June 5, 2013, the Company met with the HM Revenue & Customs (“HMRC”). During the third and fourth quarter s of 2013 the Company sent HMRC additional information supporting its position. On January 24, 2014, the Company provided an independent report to HMRC. On April 8, 2014, HMRC responded with comments. The Company will be responding to HMRC in anticipation of another meeting. As of the first quarter of 2014, there has been no resolution. During 2013, the Company met with New York State Department of Taxation and Finance to discuss the Company's respective positions regarding certain issues related to the 2008 tax year. D iscussions are ongoing and the Company has presented its technical position in writing to the State. As of December 31, 2013, the Company's NOL is approximately $2.8 billion which will expire between tax years 2029 through 2033. As of December 31, 201 3, the Company ha s an alternative minimum tax credit carryforward of $22 million, which does not expire. As a result of the commutation of CMBS exposure that occurred during the three months ended March 31, 2014, the Company's NOL is approximately $3.1 billion as of March 31, 2014.

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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=26873400&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Details
Name: | us-gaap_TextBlockAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration