INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2016

Income Tax Disclosure [Abstract]

Schedule of components of income tax expense

The components of income tax expense (benefit) were as follows (dollars in millions):

	2016			2015			2014
Current tax expense (benefit)	$	(45.2	)	$	10.7		$	15.6
Deferred tax expense	173.0			118.6			143.6
Valuation allowance applicable to current year income	(14.0		)	—			—
Income tax expense calculated based on estimated annual effective tax rate	113.8			129.3			159.2
Income tax expense on discrete items:
Tax expense related to the sale of Conseco Life Insurance Company (a)	—			—			14.2
Change in valuation allowance	40.7			(32.5		)	(48.8		)
IRS settlement	(170.4		)	—			—
Other items	10.9			.2			(.9		)
Total income tax expense (benefit)	$	(5.0	)	$	97.0		$	123.7

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(a) Conseco Life Insurance Company ("CLIC") was a wholly owned subsidiary prior to its sale on July 1, 2014.

Schedule of effective income tax rate reconciliation

A reconciliation of the U.S. statutory corporate tax rate to the effective rate reflected in the consolidated statement of operations is as follows:

	2016		2015		2014
U.S. statutory corporate rate	35.0	%	35.0	%	35.0	%
Valuation allowance	7.6		(8.8	)	(27.9	)
Non-taxable income and nondeductible benefits, net	(1.1	)	(.2	)	(.9	)
State taxes	2.2		2.1		1.5
Impact of IRS settlement	(48.2	)	—		—
Impact of the sale of CLIC	—		—		66.3
Other items	3.1		(1.7	)	(3.4	)
Effective tax rate	(1.4	)%	26.4	%	70.6	%

Schedule of deferred tax assets and liabilities

The components of the Company's income tax assets and liabilities are summarized below (dollars in millions):

	2016			2015
Deferred tax assets:
Net federal operating loss carryforwards	$	882.9		$	916.3
Net state operating loss carryforwards	12.3			14.1
Tax credits	.7			55.3
Capital loss carryforwards	—			13.8
Investments	17.8			26.5
Insurance liabilities	668.4			600.3
Other	65.6			63.0
Gross deferred tax assets	1,647.7			1,689.3
Deferred tax liabilities:
Present value of future profits and deferred acquisition costs	(277.8		)	(305.4		)
Accumulated other comprehensive income	(344.1		)	(223.8		)
Gross deferred tax liabilities	(621.9		)	(529.2		)
Net deferred tax assets before valuation allowance	1,025.8			1,160.1
Valuation allowance	(240.2		)	(213.5		)
Net deferred tax assets	785.6			946.6
Current income taxes prepaid (accrued)	4.1			(47.8		)
Income tax assets, net	$	789.7		$	898.8

Summary of valuation allowance

Changes in our valuation allowance are summarized as follows (dollars in millions):

Balance, December 31, 2013	$	294.8
Decrease in 2014	(48.8		)	(a)
Balance, December 31, 2014	246.0
Decrease in 2015	(32.5		)	(b)
Balance, December 31, 2015	213.5
Increase in 2016	26.7			(c)
Balance, December 31, 2016	$	240.2

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(a) The 2014 reduction to the deferred tax valuation allowance primarily resulted from tax examination adjustments and the tax gain on the sale of CLIC.

(b) The 2015 reduction to the deferred tax valuation allowance primarily resulted from higher actual and projected non-life income.

(c) The 2016 increase to the deferred tax valuation allowance primarily resulted from additional non-life NOLs due to the settlement with the Internal Revenue Service (the "IRS").

Summary of operating loss carryforwards

As of December 31, 2016, we had $2.5 billion of federal NOLs (all of which were non-life NOLs). The following table summarizes the expiration dates of our loss carryforwards (dollars in millions):

	Net operating loss
Year of expiration	carryforwards
2023	$	1,936.0
2025	85.2
2026	149.9
2027	10.8
2028	80.3
2029	213.2
2030	.3
2031	.2
2032	44.4
2033	.6
2034	1.7
Total federal NOLs	$	2,522.6

Reconciliation of unrecognized tax benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits for the years ended December 31, 2016 and 2015 is as follows (dollars in millions):

	Years ended December 31,
	2016			2015
Balance at beginning of year	$	234.2		$	228.7
Increase based on tax positions taken in prior years	3.4			5.5
Decrease in unrecognized tax benefits related to settlements with taxing authorities	(237.6		)	—
Balance at end of year	$	—		$	234.2