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Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2017
Income Tax Disclosure [Abstract]  
Schedule of Components of Income Tax Expense (Benefit)
The components of income tax expense (benefit) for the years ended December 31, 2017, 2016 and 2015 were as follows (dollars in millions):
 
Year Ended December 31,
 
2017
 
2016
 
2015
Current income tax expense (benefit):
 
 
 
 
 
Federal
$
—

 
$
—

 
$
(5
)
State
(11
)
 
3

 
(5
)
Foreign
—

 
2

 
5

Total current
(11
)
 
5

 
(5
)
Deferred income tax expense (benefit):
 
 
 
 
 
Federal
399

 
285

 
(145
)
State
51

 
(10
)
 
(31
)
Total deferred
450

 
275

 
(176
)
Non-current income tax expense(1)
11

 
6

 
4

Income tax expense (benefit)
$
450

 
$
286

 
$
(177
)
(1)
Non-current income tax expense primarily relates to amortization for investments in qualified affordable housing projects recognized under the proportional amortization method.
Summary of Income Tax Contingencies
The following table summarizes the tax years that are either currently under examination or remain open under the statute of limitations and subject to examination by the major tax jurisdictions in which the Company operates:
Jurisdiction
Open Tax Years
Hong Kong
2011-2017
United Kingdom
2015-2017
United States
2014-2017
Various states(1)
2008-2017
(1)
Major state tax jurisdictions include California, Georgia, Illinois, New Jersey, New York and Virginia.
The following table provides a reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31, 2017, 2016, and 2015 (dollars in millions):
 
Year Ended December 31,
 
2017
 
2016
 
2015
Unrecognized tax benefits, beginning of period
$
28

 
$
29

 
$
330

Additions based on tax positions related to prior years
1

 
1

 
5

Additions based on tax positions related to current year
11

 
4

 
2

Reductions based on tax positions related to prior years
(3
)
 
(3
)
 
(304
)
Settlements with taxing authorities
(6
)
 
(1
)
 
(3
)
Statute of limitations lapses
(6
)
 
(2
)
 
(1
)
Unrecognized tax benefits, end of period
$
25

 
$
28

 
$
29
Schedule of Deferred Tax Assets and Liabilities
The temporary differences and tax carryforwards that created deferred tax assets and deferred tax liabilities at December 31, 2017 and 2016 are summarized in the following table (dollars in millions):
 
December 31,
 
2017
 
2016
Deferred tax assets:
 
 
 
Net operating losses
$
349

 
$
676

Reserves and allowances, net
155

 
335

Financial instrument valuations
35

 
160

Deferred compensation
34

 
43

Tax credits
68

 
55

Basis differences in investments
8

 
14

Other
10

 
26

Total deferred tax assets
659

 
1,309

Valuation allowance
(23
)
 
(35
)
Total deferred tax assets, net of valuation allowance
636

 
1,274

Deferred tax liabilities:
 
 
 
Depreciation and amortization
(385
)
 
(518
)
Total deferred tax liabilities
(385
)
 
(518
)
Deferred tax assets, net
$
251

 
$
756
Summary of Valuation Allowance
The following table provides a reconciliation of the beginning and ending amount of valuation allowance for the years ended December 31, 2017, 2016, and 2015 (dollars in millions):
 
Year Ended December 31,
 
2017
 
2016
 
2015
Valuation allowance, beginning of period
$
(35
)
 
$
(82
)
 
$
(91
)
Additions related to tax reform (reduced federal benefit)
(4
)
 
—

 
—

Reductions related to the wind-down of foreign operations
14

 
—

 
14

Reductions (additions) related to state valuation allowance release
2

 
47

 
(5
)
Valuation allowance, end of period
$
(23
)
 
$
(35
)
 
$
(82
)
Schedule of Effective Income Tax Rate Reconciliation
The effective tax rate differed from the federal statutory rate as summarized in the following table for the years ended December 31, 2017, 2016 and 2015:
 
Year Ended December 31,
 
2017
 
2016
 
2015
Federal statutory rate
35.0
 %
 
35.0
 %
 
35.0
 %
State income taxes, net of federal tax benefit
4.2

 
3.9

 
0.2

Difference between statutory rate and foreign effective tax rate
—

 
0.2

 
(2.4
)
Tax exempt income
—

 
(0.1
)
 
(0.5
)
Disallowed executive compensation
0.1

 
0.2

 
6.5

Change in valuation allowances
(0.1
)
 
(5.5
)
 
0.1

Tax credits
(0.3
)
 
(0.7
)
 
(3.8
)
Estimated reserve for uncertain tax positions
(0.3
)
 
0.1

 
4.7

Deferred tax adjustments
(0.3
)
 
1.3

 
3.5

Tax reform adjustments
5.5

 
—

 
—

Excess tax benefit on share-based compensation
(0.7
)
 
—

 
—

Tax on undistributed earnings and profits in certain foreign subsidiaries
—

 
—

 
3.9

Settled IRS examination
—

 
—

 
(241.5
)
Other
(0.9
)
 
(0.3
)
 
(0.4
)
Effective tax rate
42.2
 %
 
34.1
 %
 
(194.7
)%