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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

Text Block [Abstract]

Income (loss) from operations before provision (benefit) for income taxes

			Years Ended December 31,
	In millions		2014			2013			2012
	Domestic		$	574		$	435		$	1,486
	Foreign			67			(19)			112
	Income (loss) before income taxes		$	641		$	416		$	1,598

Income tax expense (benefit) on income (loss) and shareholder' equity

				Years Ended December 31,
	In millions			2014			2013			2012
	Current taxes:
		Federal		$	-		$	-		$	3
		State			10			8			2
		Foreign			12			1			(6)
	Deferred taxes:
		Federal			48			165			350
		Foreign			2			(8)			15
	Provision (benefit) for income taxes				72			166			364
	Income taxes charged (credited) to shareholders' equity related to:
		Change in unrealized gains (losses) on AFS securities			89			(81)			86
		Change in AFS securities with OTTI			(29)			4			42
		Change in foreign currency translation			(13)			1			(2)
		Share-based compensation			2			4			7
	Total income taxes charged (credited) to shareholders' equity				49			(72)			133
	Total effect of income taxes			$	121		$	94		$	497

Income tax rate reconciliation from statutory to effective tax rate

				Years Ended December 31,
				2014		2013		2012
	Federal income tax computed at the statutory rate			35.0%		35.0%		35.0%
	Increase (reduction) in taxes resulting from:
		Tax-exempt interest		(0.5)%		(1.1)%		(0.7)%
		Mark-to-market on warrants		(1.6)%		3.8%		(0.7)%
		Change in valuation allowance		(13.5)%		(12.6)%		(5.6)%
		Change in uncertain tax positions		(9.1)%		2.8%		(0.1)%
		State income tax, net of federal benefit		0.5%		2.0%		0.1%
		Out-of-period adjustment		0.0%		0.0%		(3.8)%
		Foreign taxes		(0.5)%		(0.8)%		(1.2)%
		Basis difference in foreign subsidiary		0.0%		11.4%		0.0%
		Other		0.9%		(0.6)%		(0.2)%
	Effective tax rate			11.2%		39.9%		22.8%

Deferred tax assets and liabilities

				As of December 31,
	In millions			2014			2013
	Deferred tax liabilities:
		Unearned premium revenue		$	196		$	220
		Deferral of cancellation of indebtedness income			91			114
		Deferred acquisition costs			72			87
		Net unrealized gains in accumulated other comprehensive income			4			-
		Basis difference in foreign subsidiaries			59			48
		Other			1			9
	Total gross deferred tax liabilities				423			478
	Deferred tax assets:
		Compensation and employee benefits			30			31
		Loss and loss adjustment expense reserves			69			85
		Net operating loss and tax credit carryforwards			1,150			917
		Capital loss carryforward and other-than-temporary impairments			6			93
		Net unrealized losses on insured derivatives			93			400
		Net losses on financial instruments at fair value and foreign exchange			37			47
		Net unrealized losses in accumulated other comprehensive income			-			30
		Alternative minimum tax credit carryforward			22			22
		Net deferred taxes on VIEs			25			55
	Total gross deferred tax assets				1,432			1,680
		Valuation allowance			-			93
	Net deferred tax asset			$	1,009		$	1,109

Change in unrecognized tax benefit

	In millions
	Unrecognized tax benefit as of January 1, 2012			$	47
	The gross amount of the increase/(decrease) in the UTB as a result of tax positions taken:
		During a prior year			26
	The amounts of decreases in the UTB as a result of the applicable statute of limitations				(26)
	Unrecognized tax benefit as of December 31, 2012			$	47
	The gross amount of the increase/(decrease) in the UTB as a result of tax positions taken:
		During the current year			18
	The amounts of decreases in the UTB related to settlements with taxing authorities				-
	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			(61)
		During the current year			-
	The amounts of decreases in the UTB related to settlements with taxing authorities				(4)
	The reduction in the UTB as a result of the applicable statute of limitations				-
	Unrecognized tax benefit as of December 31, 2014			$	-

X

- Definition

Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years.

+ References

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-Publisher FASB

-Name Accounting Standards Codification

-Topic 740

-SubTopic 10

-Section 50

-Paragraph 9

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Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets.

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-Topic 740

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Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations.

+ References

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Tabular disclosure of income before income tax between domestic and foreign jurisdictions.

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-Publisher FASB

-Name Accounting Standards Codification

-Topic 235

-SubTopic 10

-Section S99

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Tabular disclosure of the change in unrecognized tax benefits.

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-SubTopic 10

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-URI http://asc.fasb.org/extlink&oid=32707879&loc=d3e36027-109320



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