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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2015

Income Tax Disclosure [Abstract]

Components of Income Tax Expense

Our income tax expense as presented in the consolidated financial statements is summarized as follows:

	Year Ended December 31,
	2015				2014				2013
	(Dollars in thousands)
Consolidated statements of operations:
Current income taxes	$	75,568			$	116,545			$	133,036
Deferred income taxes (benefits)	41,916				(46,504		)		3,013
Total income tax expense included in consolidated statements of operations	117,484				70,041				136,049
Stockholders' equity:
Expense (benefit) relating to:
Change in net unrealized investment losses	(279,860		)		363,572				(344,944		)
Share-based compensation	(3,649		)		(5,716		)		(4,043		)
Extinguishment of convertible debt	—				(9,284		)		(4,546		)
Total income tax expense (benefit) included in consolidated financial statements	$	(166,025	)		$	418,613			$	(217,484	)

Effective Income Tax Rate Reconciliation

Income tax expense in the consolidated statements of operations differed from the amount computed at the applicable statutory federal income tax rate of 35% as follows:

	Year Ended December 31,
	2015				2014				2013
	(Dollars in thousands)
Income before income taxes	$	337,314			$	196,064			$	389,332
Income tax expense on income before income taxes	$	118,060			$	68,622			$	136,266
Tax effect of:
Tax exempt net investment income	(3,834		)		(3,669		)		(2,657		)
Extinguishment of convertible debt	—				4,202				2,695
Other	3,258				886				(255		)
Income tax expense	$	117,484			$	70,041			$	136,049
Effective tax rate	34.8		%		35.7		%		34.9		%

Deferred Tax Assets and Liabilities

The tax effects of temporary differences that give rise to the deferred tax assets and liabilities at December 31, 2015 and 2014, are as follows:

	December 31,
	2015				2014
	(Dollars in thousands)
Deferred income tax assets:
Policy benefit reserves	$	2,092,731			$	2,052,968
Other than temporary impairments	7,801				753
Derivative instruments	91,638				—
Amounts due reinsurer	—				680
Other policyholder funds	6,861				7,765
Litigation settlement accrual	7,100				7,100
Deferred compensation	8,346				10,565
Convertible senior notes	—				12,281
Net operating loss carryforwards	6,637				17,694
Other	13,317				11,685
Gross deferred tax assets	2,234,431				2,121,491
Deferred income tax liabilities:
Deferred policy acquisition costs and deferred sales inducements	(1,860,722		)		(1,637,607		)
Net unrealized gains on available for sale fixed maturity and equity securities	(96,454		)		(376,314		)
Derivative instruments	—				(94,038		)
Amounts due reinsurer	(9,677		)		—
Investment income items	(32,466		)		(14,842		)
Other	(2,429		)		(2,585		)
Gross deferred tax liabilities	(2,001,748		)		(2,125,386		)
Net deferred income tax (liability) asset	$	232,683			$	(3,895	)

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- 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

Reference 1: 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

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- Definition

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.

+ References

Reference 1: 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

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- Definition

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

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 12
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32687-109319

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