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Income Tax (Tables)

12 Months Ended

Dec. 31, 2013

Provision for income tax from continuing operations

The provision for income tax from continuing operations was as follows:



	Years Ended December 31,
	2013			2012			2011
	(In millions)
Current:
Federal	$	85		$	(29	)	$	(200	)
State and local	2			6			(1		)
Foreign	422			846			614
Subtotal	509			823			413
Deferred:
Federal	(250		)	(244		)	2,241
State and local	(11		)	(1		)	(3		)
Foreign	413			(450		)	142
Subtotal	152			(695		)	2,380
Provision for income tax expense (benefit)	$	661		$	128		$	2,793

Income (loss) from continuing operations before income tax expense (benefit) from domestic and foreign operations

The Company’s income (loss) from continuing operations before income tax expense (benefit) from domestic and foreign operations were as follows:



	Years Ended December 31,
	2013		2012			2011
	(In millions)
Income (loss) from continuing operations:
Domestic	$	1,186	$	(1,496	)	$	6,869
Foreign	2,866		2,938			2,315
Total	$	4,052	$	1,442		$	9,184

Income tax for continuing operations effective rate reconciliation

The reconciliation of the income tax provision at the U.S. statutory rate to the provision for income tax as reported for continuing operations was as follows:



	Years Ended December 31,
	2013			2012			2011
	(In millions)
Tax provision at U.S. statutory rate	$	1,418		$	505		$	3,215
Tax effect of:
Dividend received deduction	(166		)	(162		)	(160		)
Tax-exempt income	(96		)	(94		)	(86		)
Prior year tax	75			23			(4		)
Low income housing tax credits	(194		)	(150		)	(102		)
Other tax credits	(54		)	(28		)	(36		)
Foreign tax rate differential (1)	(340		)	(45		)	(41		)
Change in valuation allowance	30			15			16
Goodwill impairment	—			408			—
Deferred tax effects of branch conversions	4			(324		)	—
Other, net	(16		)	(20		)	(9		)
Provision for income tax expense (benefit)	$	661		$	128		$	2,793

______________


(1)	For the year ended December 31, 2013, foreign tax rate differential includes one-time tax benefits of $119 million related to the receipt of a Japan tax refund, $69 million related to the estimated reversal of Japan temporary differences, and $65 million related to the change in repatriation assumptions for foreign earnings of certain European operations.

Components of deferred tax assets and liabilities

Deferred income tax represents the tax effect of the differences between the book and tax basis of assets and liabilities. Net deferred income tax assets and liabilities consisted of the following at:



	December 31,
	2013			2012
	(In millions)
Deferred income tax assets:
Policyholder liabilities and receivables	$	1,014		$	6,233
Investments, including derivatives	86			—
Net operating loss carryforwards	1,808			1,408
Employee benefits	737			1,234
Capital loss carryforwards	32			160
Tax credit carryforwards	1,653			545
Litigation-related and government mandated	232			197
Other	471			484
Total gross deferred income tax assets	6,033			10,261
Less: Valuation allowance	357			368
Total net deferred income tax assets	5,676			9,893
Deferred income tax liabilities:
Investments, including derivatives	—			3,149
Intangibles	2,081			2,668
Net unrealized investment gains	4,883			7,854
DAC	5,133			4,775
Other	222			140
Total deferred income tax liabilities	12,319			18,586
Net deferred income tax asset (liability)	$	(6,643	)	$	(8,693	)

Summary of net operating loss carryforwards for tax purposes

The following table sets forth the domestic, state, and foreign net operating and capital loss carryforwards for tax purposes at December 31, 2013.



	Net Operating Loss Carryforwards			Capital Loss Carryforwards
	Amount		Expiration	Amount		Expiration
	(In millions)			(In millions)
Domestic	$	4,153	Beginning in 2018	$	52	Beginning in 2018
State	$	153	Beginning in 2014	$	—	N/A
Foreign	$	1,576	Beginning in 2014	$	40	Beginning in 2014

Rollforward of the deferred tax asset valuation allowance associated with branch restructuring

The following table provides a rollforward of the deferred tax asset valuation allowance associated with the 2013 branch restructurings:



	Amount
	(In millions)
Balance at January 1, 2012	$	23
Income tax expense (benefit)	12
Deferred income tax expense (benefit) related to unrealized investment gains (losses)	(10		)
Offsetting reduction in gross deferred tax asset related to the branch transfer of assets to foreign subsidies	—
Balance at December 31, 2012	25
Income tax expense (benefit)	4
Deferred income tax expense (benefit) related to unrealized investment gains (losses)	2
Offsetting reduction in gross deferred tax asset related to the branch transfer of assets to foreign subsidies	(31		)
Balance at December 31, 2013	$	—

Reconciliation of unrecognized tax benefits

Interest was as follows:



	Years Ended December 31,
	2013		2012		2011
	(In millions)
Interest recognized in the consolidated statements of operations	$	20	$	2	$	31

			December 31,
			2013		2012
			(In millions)
Interest included in other liabilities in the consolidated balance sheets			$	257	$	237

A reconciliation of the beginning and ending amount of unrecognized tax benefits was as follows:



	Years Ended December 31,
	2013			2012			2011
	(In millions)
Balance at January 1,	$	708		$	679		$	810
Additions for tax positions of prior years	117			105			30
Reductions for tax positions of prior years	(37		)	(82		)	(161		)
Additions for tax positions of current year	39			32			13
Reductions for tax positions of current year	(1		)	(9		)	(8		)
Settlements with tax authorities	(52		)	(15		)	(5		)
Lapses of statutes of limitations	—			(2		)	—
Balance at December 31,	$	774		$	708		$	679
Unrecognized tax benefits that, if recognized would impact the effective rate	$	661		$	566		$	527

- 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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