Income Taxes (Tables)

12 Months Ended

Dec. 31, 2016

Schedule of Current and Deferred Components of Income Tax Expense (Benefit)

The current and deferred components of income tax expense (benefit) are as follows:


Year Ended December 31	2016		2015			2014

(In millions)

Income tax expense (benefit):
Federal:
Current	$	71	$	79		$	370
Deferred		102		(234	)		(23	)
State and city:
Current		13		21			12
Deferred		13		5			6
Foreign		21		86			92

Total	$	220	$	(43	)	$	457

Components of U.S. and Foreign Income and Reconciliation between Federal Income Tax Expense at Statutory Rates and Actual Income Tax Expense (Benefit)

The components of U.S. and foreign income before income tax and a reconciliation between the federal income tax expense at statutory rates and the actual income tax expense (benefit) is as follows:


Year Ended December 31	2016			2015			2014
(In millions)

Income before income tax:
U.S.	$	1,207		$	543		$	1,499
Foreign		(271	)		(299	)		311
Total	$	936		$	244		$	1,810


Income tax expense at statutory rate	$	328		$	86		$	633
Increase (decrease) in income tax expense resulting from:
Exempt investment income		(126	)		(126	)		(121	)
Foreign related tax differential		40			(18	)		(48	)
Amortization of deferred charges associated with intercompany rig sales to other tax jurisdictions					38			44
Taxes related to domestic affiliate		(14	)		(10	)		14
Partnership earnings not subject to taxes		(52	)		(38	)		(39	)
Allowance for foreign tax credits		62
Unrecognized tax positions, including foreign currency revaluation		(42	)		1			(42	)
Other (a)		24			24			16
Income tax expense (benefit)	$	220		$	(43	)	$	457

(a)	Includes state and local taxes, adjustments to prior year estimates and other non-deductible expenses.

Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits, Excluding Tax Carryforwards and Interest and Penalties

A reconciliation of the beginning and ending amount of unrecognized tax benefits, excluding tax carryforwards and interest and penalties, is as follows:


Year Ended December 31	2016			2015			2014
(In millions)

Balance at January 1	$	54		$	57		$	91
Additions for tax positions related to the current year		4			7			6
Additions for tax positions related to a prior year		1
Reductions for tax positions related to a prior year		(20	)		(3	)		(35	)
Lapse of statute of limitations		(4	)		(7	)		(5	)
Balance at December 31	$	35		$	54		$	57

Summary of Deferred Tax Assets and Liabilities

The following table summarizes deferred tax assets and liabilities:


December 31	2016			2015
(In millions)

Deferred tax assets:
Insurance reserves:
Property and casualty claim and claim adjustment expense reserves	$	125		$	178
Unearned premium reserves		206			230
Receivables		26			30
Employee benefits		407			419
Life settlement contracts		56			48
Deferred retroactive reinsurance benefit		117			84
Net operating loss carryforwards		178			245
Tax credit carryforwards		289			131
Basis differential in investment in subsidiary		17			19
Other		246			282
Total deferred tax assets		1,667			1,666
Valuation allowance		(210	)		(147	)
Net deferred tax assets		1,457			1,519

Deferred tax liabilities:
Deferred acquisition costs		(120	)		(117	)
Net unrealized gains		(295	)		(166	)
Property, plant and equipment		(1,019	)		(998	)
Basis differential in investment in subsidiary		(409	)		(428	)
Other liabilities		(235	)		(173	)
Total deferred tax liabilities		(2,078	)		(1,882	)

Net deferred tax liabilities (a)	$	(621	)	$	(363	)

(a)	Includes $15 and $19 of deferred tax assets reflected in Other assets in the Consolidated Balance Sheets at December 31, 2016 and 2015.