Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

Summary of Income (Loss) Before Income Taxes

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



	Years Ended December 31,
	2018		2017		2016
U.S. income	$	1,421	$	710	$	336
Non-U.S. income	289		313		275
Income before income taxes and equity income	$	1,710	$	1,023	$	611

Summary of Income Tax Expense (Benefit)



Income Tax Expense	Years Ended December 31,
	2018		2017			2016
Current income tax expense
U.S. federal	$	—	$	—		$	(1	)
U.S. state and local	1		(4		)	—
Non-U.S.	83		73			98
Total current	84		69			97
Deferred income tax expense
U.S. federal	133		(16		)	(1		)
U.S. state and local	75		31			13
Non-U.S.	31		27			(4		)
Total deferred	239		42			8
Total income tax provision	$	323	$	111		$	105

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,
	2018		2017		2016
U.S. federal statutory tax rate	21.0	%	35.0	%	35.0	%
Non-U.S. income taxed at other than the U.S. federal statutory rate	2.8		(0.1	)	(0.3	)
State and local income taxes	4.2		3.5		2.5
U.S. tax on non-U.S. earnings	0.2		7.3		(15.4	)
Valuation allowance	0.4		1.1		7.8
Tax credits and incentives	(6.2	)	(11.2	)	(12.4	)
U.S. federal tax reform impact	(2.6	)	(23.4	)	—
Other	(0.9	)	(1.3	)	—
Effective tax rate	18.9	%	10.9	%	17.2	%

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, 2018			December 31, 2017
Deferred tax assets
Net operating loss carryforward - U.S.^(a)	$	968		$	811
Net operating loss carryforward - non-U.S.^(b)	167			180
Market value difference of loan portfolio	23			102
Accruals	104			122
Tax credits^(c)	806			789
Other	151			157
Total deferred tax assets before valuation allowance	2,219			2,161
Less: valuation allowance	(270		)	(326		)
Total deferred tax assets	1,949			1,835
Deferred tax liabilities
Depreciable assets	2,020			1,619
Deferred acquisition costs	134			130
Other	103			125
Total deferred tax liabilities	2,257			1,874
Net deferred tax liability	$	(308	)	$	(39	)

_________________


(a)	Includes tax-effected operating losses of $180 million expiring through 2039 and $788 million that may be carried forward indefinitely at December 31, 2018.


(b)	Includes tax-effected operating losses of $120 million expiring through 2039 and $47 million that may be carried forward indefinitely at December 31, 2018.


(c)	Includes tax credits of $806 million expiring through 2039 at December 31, 2018.

Summary of Unrecognized Tax Benefits Activity



Uncertain Tax Positions	Years Ended December 31,
	2018			2017			2016
Beginning balance	$	54		$	56		$	57
Additions to prior years' tax positions	—			—			4
Reductions to prior years' tax positions	—			(1		)	(6		)
Additions to current year tax positions	3			4			2
Reductions in tax positions due to lapse of statutory limitations	(5		)	(5		)	(4		)
Settlements	—			—			—
Foreign currency translation	(2		)	—			3
Ending balance	$	50		$	54		$	56