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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2019

Dec. 31, 2018

Schedule of Components of Income Tax Expense (Benefit)

The following schedule discloses significant components of income tax expense (benefit) for each year presented:



	Year Ended December 31,
	2019			2018			2017

	(in millions)
Current tax expense (benefit):
U.S.	$	86		$	(346	)	$	(47	)
State and local	2			7			11
Foreign	879			681			594
Total current tax expense (benefit)	967			342			558
Deferred tax expense (benefit):
U.S.(1)	57			80			(2,552		)
State and local	(1		)	1			0
Foreign(1)	(76		)	399			556
Total deferred tax expense (benefit)	(20		)	480			(1,996		)
Total income tax expense (benefit) on income (loss) before equity in earnings of operating joint ventures	947			822			(1,438		)
Income tax expense (benefit) on equity in earnings of operating joint ventures	43			31			33
Income tax expense (benefit) on discontinued operations	0			0			0
Income tax expense (benefit) reported in equity related to:
Other comprehensive income (loss)	3,811			(1,812		)	784
Stock-based compensation programs	0			0			(2		)
Total income taxes	$	4,801		$	(959	)	$	(623	)

Schedule of Effective Income Tax Rate Reconciliation

The differences between income taxes expected at the U.S. federal statutory income tax rate of 21% applicable for 2019 and 2018 and 35% applicable for 2017, and the reported income tax expense (benefit) are summarized as follows:



	Year Ended December 31,
	2019			2018			2017

	(in millions)
Expected federal income tax expense (benefit)	$	1,068		$	1,015		$	2,270
Non-taxable investment income	(270		)	(246		)	(369		)
Foreign taxes at other than U.S. rate	225			349			(249		)
Low-income housing and other tax credits	(118		)	(112		)	(126		)
Changes in tax law	0			(321		)	(2,858		)
Other	42			137			(106		)
Reported income tax expense (benefit)	$	947		$	822		$	(1,438	)
Effective tax rate	18.6		%	17.0		%	(22.2		)%

U.S. Tax Cuts and Jobs Act of 2017

The financial statement impact related to the adoption of Tax Act of 2017 for the twelve months ended December 31, 2017 and twelve months ended December 31, 2018 was as follows:



	Twelve Months Ended December 31, 2017			Twelve Months Ended December 31, 2018			Total
	(in millions)
Deferred tax revaluation from tax law change	$	(1,592	)	$	7		$	(1,585	)
Adoption of modified territorial system	(1,785		)	(24		)	(1,809		)
Deemed repatriation	497			(136		)	361
Total provision for income tax expense (benefit)	$	(2,880	)	$	(153	)	$	(3,033	)

Schedule of Deferred Tax Assets and Liabilities



	As of December 31,
	2019			2018

	(in millions)
Deferred tax assets:
Insurance reserves	$	730		$	0
Policyholders’ dividends	1,365			733
Net operating and capital loss carryforwards	189			155
Refundable AMT credits	0			205
Employee benefits	973			693
Investments	0			1,002
Other	113			39
Deferred tax assets before valuation allowance	3,370			2,827
Valuation allowance	(136		)	(117		)
Deferred tax assets after valuation allowance	3,234			2,710
Deferred tax liabilities:
Insurance reserves	0			719
Net unrealized investment gains	11,109			5,961
Deferred policy acquisition costs	3,799			3,888
Investments	138			0
Value of business acquired	262			461
Deferred tax liabilities	15,308			11,029
Net deferred tax liability	$	(12,074	)	$	(8,319	)

Valuation Allowance on Deferred Tax Assets

Operating And Capital Loss Carryforwards

as follows:



	Federal		State			Foreign Operations			Total
	(in millions)
Balance at January 1, 2017	$	0	$	138		$	25		$	163
Charged to costs and expenses	0		63			3			66
Other adjustments	0		(5		)	(10		)	(15		)
Balance at December 31, 2017	0		196			18			214
Charged to costs and expenses	0		24			(6		)	18
Other adjustments	0		(114		)	(1		)	(115		)
Balance at December 31, 2018	0		106			11			117
Charged to costs and expenses	3		34			(5		)	32
Other adjustments	0		(13		)	0			(13		)
Balance at December 31, 2019	$	3	$	127		$	6		$	136

The following table sets forth the amount and expiration dates of federal, state and foreign operating losses, capital loss and foreign tax credit carryforwards for tax purposes, as of the periods indicated:



	As of December 31,
	2019		2018

	(in millions)
Federal net operating and capital loss carryforwards(1)	$	33	$	0
State net operating and capital loss carryforwards(2)	$	2,005	$	2,152
Foreign net operating and capital loss carryforwards(3)	$	203	$	99
Federal foreign tax credit carryforwards(4)	$	4	$	0

__________


(1)	Expires in 2024.


(2)	Expires between 2020 and 2039.

(3)

$124 million expires between 2021 and 2035 and $79 million has an unli

Undistributed Earnings Of Foreign Subsidiaries Assuming Permanent Reinvestment

es” during 2018. The Company made no changes with respect to its repatriation assumptions in 2019.

The following table sets forth the undistributed earnings of foreign subsidiaries, where the Company assumes indefinite reinvestment of such earnings and for which, in 2019, 2018, and 2017, U.S. deferred taxes have not been provided, and for which, in 2017 and 2018, foreign deferred withholding taxes have not been provided. The net tax liability that may arise if the 2019 earnings were remitted can range from $0 to $235 million which includes any foreign exchange impacts.



	At December 31,
	2019		2018		2017

	(in millions)
Undistributed earnings of foreign subsidiaries (assuming indefinite reinvestment for U.S. tax purposes)(1)	N/A		N/A		N/A
Undistributed earnings of foreign subsidiaries (assuming indefinite reinvestment only for Withholding or other non-U.S. Taxes)	$	2,764	$	2,475	$	2,603

__________

(1)

Consistent with the Tax Act of 2017, the Company provides U.S. income tax for all unremitted earnings of the Company’s foreign affiliates as of

Unrecognized Tax Benefits Reconciliation

or income taxes.

The following table reconciles the total amount of unrecognized tax benefits at the beginning and end of the per

Amounts Recognized In Consolidated Financial Statements For Tax Related Interest And Penalties

expense (benefit). The amounts recognized in the consolidated financial statements for tax-related interest and penalties for the years ended December 31 are

Open Tax Years By Major Tax Jurisdictions

follows:



	2019		2018		2017

	(in millions)
Interest and penalties recognized in the Consolidated Statements of Operations	$	1	$	1	$	(3	)



	2019		2018

	(in millions)
Interest and penalties recognized in liabilities in the Consolidated Statements of Financial Position	$	2	$	1

Listed below are the tax years that remain subject to examination, by major tax jurisdiction, as of Dec