Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Summary of Income (Loss) Before Income Taxes

The following table summarizes income before income taxes and equity income:



	Years Ended December 31,
	2017		2016		2015
U.S. income	$	710	$	336	$	374
Non-U.S. income	313		275		189
Income before income taxes and equity income	$	1,023	$	611	$	563

Summary of Income Tax Expense (Benefit)



Income Tax Expense	Years Ended December 31,
	2017			2016			2015
Current income tax expense
U.S. federal	$	—		$	(1	)	$	13
U.S. state and local	(4		)	—			(5		)
Non-U.S.	73			98			58
Total current	69			97			66
Deferred income tax expense
U.S. federal	(16		)	(1		)	115
U.S. state and local	31			13			6
Non-U.S.	27			(4		)	7
Total deferred	42			8			128
Total income tax provision	$	111		$	105		$	194

Effective Income Tax Rate Reconciliation

The following table summarizes a reconciliation of income tax expense (benefit) compared with the amounts at the U.S. federal statutory income tax rate:



	Years Ended December 31,
	2017		2016		2015
U.S. statutory tax rate	35.0	%	35.0	%	35.0	%
Non-U.S. income taxed at other than 35%	(0.1	)	(0.3	)	(0.8	)
State and local income taxes	3.5		2.5		1.1
U.S. tax on non-U.S. earnings	7.3		(15.4	)	7.8
Valuation allowance	1.1		7.8		1.2
Tax credits and incentives	(11.2	)	(12.4	)	(8.4	)
U.S. federal tax reform impact	(23.4	)	—		—
Other	(1.3	)	—		(1.5	)
Effective tax rate	10.9	%	17.2	%	34.4	%

Schedule of Deferred Tax Assets and Liabilities

The following table summarizes the components of temporary differences and carryforwards that give rise to deferred tax assets and liabilities:



	December 31, 2017			December 31, 2016
Deferred tax assets
Net operating loss carryforward - U.S.^(a)	$	811		$	1,049
Net operating loss carryforward - non-U.S.^(b)	180			178
Market value difference of loan portfolio	102			102
Accruals	122			117
Tax credits^(c)	789			388
Other	157			111
Total deferred tax assets before valuation allowance	2,161			1,945
Less: valuation allowance	(326		)	(144		)
Total deferred tax assets	1,835			1,801
Deferred tax liabilities
Depreciable assets	1,619			1,482
Deferred acquisition costs	130			177
Other	125			123
Total deferred tax liabilities	1,874			1,782
Net deferred tax (liability) asset	$	(39	)	$	19

_________________


(a)	Includes tax-effected operating losses of $0.8 billion expiring through 2038 at December 31, 2017.


(b)	Includes tax-effected operating losses of $115 million expiring through 2038 and $65 million that may be carried forward indefinitely at December 31, 2017.


(c)	Includes tax credits of $789 million expiring through 2038 at December 31, 2017.

Summary of Unrecognized Tax Benefits Activity



Uncertain Tax Positions	Years Ended December 31,
	2017			2016			2015
Beginning balance	$	56		$	57		$	77
Additions to prior years' tax positions	—			4			—
Reductions to prior years' tax positions	(1		)	(6		)	(4		)
Additions to current year tax positions	4			2			—
Reductions in tax positions due to lapse of statutory limitations	(5		)	(4		)	(7		)
Settlements	—			—			(2		)
Foreign currency translation	—			3			(7		)
Ending balance	$	54		$	56		$	57