Income Tax (Tables)

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Provision for income tax from continuing operations

The provision for income tax was as follows:

	Years Ended December 31,
	2019			2018			2017
	(In millions)
Current:
Federal	$	(36	)	$	(166	)	$	406
State and local	4			—			6
Foreign	—			—			18
Subtotal	(32		)	(166		)	430
Deferred:
Federal	(285		)	285			(667		)
State and local	—			—			—
Foreign	—			—			—
Subtotal	(285		)	285			(667		)
Provision for income tax expense (benefit)	$	(317	)	$	119		$	(237	)

Income tax for continuing operations effective rate reconciliation

The reconciliation of the income tax provision at the statutory tax rate to the provision for income tax as reported was as follows:

	Years Ended December 31,
	2019			2018			2017
	(In millions)
Tax provision at statutory rate	$	(221	)	$	207		$	(215	)
Tax effect of:
Excess loss account - Separation from MetLife (1)	—			(2		)	1,088
Rate revaluation due to tax reform (2)	—			—			(803		)
Sale of subsidiaries	—			—			(138		)
Dividend received deduction (3)	(42		)	(44		)	(130		)
Other tax credits	(31		)	(25		)	(30		)
Release of valuation allowance	—			(11		)	—
Other, net	(23		)	(6		)	(9		)
Provision for income tax expense (benefit)	$	(317	)	$	119		$	(237	)
Effective tax rate	30		%	12		%	39		%

_______________

(1) For the year ended December 31, 2017, the Company recognized a non-cash charge to provision for income tax expense and corresponding capital contribution from MetLife. This tax obligation was in connection with the Separation. MetLife, Inc. is responsible for this obligation through the Tax Separation Agreement.

(2) For the year ended December 31, 2017, the Company recognized a $725 million benefit in net income from remeasurement of net deferred tax liabilities in connection with the Tax Act. Additionally, as a result of the reduction in the statutory tax rate under the Tax Act, the liability to MetLife under the Tax Receivables Agreement (as defined below) was reduced by $222 million, which is included in other revenues and is non-taxable.

(3)

For the year ended December 31, 2018, the Tax Act changed the dividend received deduction amount applicable to insurance companies to a 70% company share and a 50% dividend received deduction for eligible dividends. The dividend received deduction reduces the amount of dividend income subject to tax and is a significant component of the difference between the actual tax expense and expected amount determined using the statutory tax rate.

Components of deferred tax assets and liabilities

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

	December 31,
	2019			2018
	(In millions)
Deferred income tax assets:
Tax credit carryforwards	$	106		$	58
Net operating loss carryforwards	1,087			1,052
Employee benefits	17			7
Intangibles	93			159
Investments, including derivatives (1)	260			120
Other	15			—
Total net deferred income tax assets	1,578			1,396
Deferred income tax liabilities:
Policyholder liabilities and receivables (1)	1,277			1,379
Net unrealized investment gains	871			202
DAC	785			761
Other	—			26
Total deferred income tax liabilities	2,933			2,368
Net deferred income tax asset (liability)	$	(1,355	)	$	(972	)

_______________

(1)

The Company reclassified certain components of the 2018 net deferred income tax asset (liability) upon completion of a Separation related deferred tax basis study in 2019. Total deferred income tax assets and total deferred income tax liabilities increased by $120 million at December 31, 2018 as compared to the amounts previously presented. There was no change in total net deferred income tax asset (liability) resulting from these reclassifications at December 31, 2018.

Summary of Operating Loss Carryforwards [Table Text Block]

The following table sets forth the net operating loss carryforwards for tax purposes at December 31, 2019.

	Net Operating Loss Carryforwards
	(In millions)
Expiration
2034-2038	$	3,059
Indefinite	2,119
	$	5,178

Summary of Tax Credit Carryforwards

The following table sets forth the general business credits and foreign tax credits available for carryforward for tax purposes at December 31, 2019.

	Tax Credit Carryforwards
	General Business Credits		Foreign Tax Credits
	(In millions)
Expiration
2020-2024	$	—	$	18
2025-2029	—		71
2030-2034	—		—
2035-2039	17		—
Indefinite	—		—
	$	17	$	89

Reconciliation of unrecognized tax benefits

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

	Years Ended December 31,
	2019		2018		2017
	(In millions)
Balance at January 1,	$	35	$	23	$	58
Additions for tax positions of prior years	—		12		—
Reductions for tax positions of prior years	—		—		(4		)
Additions for tax positions of current year	—		—		3
Reductions for tax positions of current year	—		—		(2		)
Settlements with tax authorities	—		—		(32		)
Balance at December 31,	$	35	$	35	$	23
Unrecognized tax benefits that, if recognized would impact the effective rate	$	35	$	35	$	23