Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014


	Years Ended December 31,
(Dollars in thousands)	2014		2013		2012
Current tax expense (benefit):
U.S.	$	143,297	$	116,829	$	46,723
Non-U.S.		22,575		18,219		14,131
Total current tax expense (benefit)		165,872		135,048		60,854
Total deferred U.S. tax expense (benefit)		21,780		154,658		49,718
Total income tax expense (benefit)	$	187,652	$	289,706	$	110,572

(Some amounts may not reconcile due to rounding.)

Reconciliation Of The Difference Between The Provision For Income Taxes And The Expected Tax Provision At The Weighted Average Tax Rate


	Years Ended December 31,
(Dollars in thousands)	2014						2013						2012
	U.S.			Non-U.S.			U.S.			Non-U.S.			U.S.			Non-U.S.
Underwriting gain (loss)	$	228,194		$	658,421		$	246,699		$	491,909		$	42,775		$	216,228
Net investment income		260,501			270,069			274,920			273,589			287,382			312,820
Net realized capital gains (losses)		78,006			6,040			295,814			4,413			143,326			21,073
Net derivative gain (loss)		-			(11,599	)		-			44,044			-			(9,738	)
Corporate expenses		(7,252	)		(16,169	)		(8,262	)		(16,555	)		(8,764	)		(15,211	)
Interest, fee and bond issue cost amortization expense		(37,970	)		(563	)		(45,452	)		(665	)		(50,746	)		(2,936	)
Other income (expense)		(1,561	)		19,998			(7,086	)		1,598			18,360			(15,042	)
Pre-tax income (loss)	$	519,918		$	926,197		$	756,633		$	798,333		$	432,332		$	507,194

Expected tax provision at the applicable statutory rate(s)		181,972			21,279			264,822			16,279			151,316			11,012
Increase (decrease) in taxes resulting from:
Tax exempt income		(12,231	)		-			(15,038	)		-			(20,623	)		-
Dividend received deduction		(5,910	)		-			(7,809	)		-			(8,351	)		-
Proration		1,835			-			2,274			-			3,138			-
Tax audit settlement		-			-			-			-			(2,508	)		-
Uncertain tax position release		-			-			-			-			(31,912	)		-
Other		(588	)		1,296			27,238			1,940			5,381			3,119
Total income tax provision	$	165,077		$	22,575		$	271,487		$	18,219		$	96,441		$	14,131

(Some amounts may not reconcile due to rounding.)

Net Deferred Income Tax Assets


	Years Ended December 31,
(Dollars in thousands)	2014			2013
Deferred tax assets:
Loss reserve	$	153,978		$	146,781
Foreign tax credits		64,902			74,255
Alternative minimum tax credits		44,954			93,336
Unearned premium reserve		44,582			45,368
Net unrecognized losses on benefit plans		40,377			20,944
Investment impairments		13,841			2,485
Benefit plan liability		9,873			7,968
Uncollectible reinsurance reserve		5,237			5,534
Net operating loss carryforward		3,296			3,805
Deferred expenses		3,076			2,695
Other assets		21,048			12,306
Total deferred tax assets		405,164			415,477

Deferred tax liabilities:
Net fair value income		128,856			121,784
Deferred acquisition costs		38,636			39,344
Net unrealized investment gains		28,108			40,396
Net unrealized foreign currency gains		-			28,098
Gain on tender of debt		21,916			27,395
Other liabilities		15,379			8,374
Total deferred tax liabilities		232,895			265,391

Net deferred tax assets		172,269			150,086
Less: Valuation allowance		(3,296	)		(3,805	)
Total net deferred tax assets	$	168,973		$	146,281

Reconciliation Of The Beginning And Ending Amount Of Unrecognized Tax Benefits


(Dollars in thousands)	2014		2013		2012
Balance at January 1	$	-	$	-	$	31,912
Additions based on tax positions related to the current year		-		-		-
Additions for tax positions of prior years		-		-		-
Reductions for tax positions of prior years		-		-		(31,912	)
Settlements with taxing authorities		-		-		-
Lapses of applicable statutes of limitations		-		-		-
Balance at December 31	$	-	$	-	$	-

- Definition

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

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