AIG 2014 Annual Report Download - page 333

ITEM 8 / NOTE 24. INCOME TAXES
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benefits of $236 million associated with tax exempt interest income, $209 million related to a decrease in the U.S. Life
Insurance Companies’ capital loss carryforward valuation allowance, $182 million of income excludible from gross income
related to the global resolution of certain residential mortgage-related disputes and $68 million associated with effect of foreign
operations.
For the year ended December 31, 2013, the effective tax rate on income from continuing operations was 3.8 percent. The
effective tax rate on income from continuing operations differs from the statutory tax rate of 35 percent primarily due to tax
benefits of $2.8 billion related to a decrease in the U.S. Life Insurance Companies’ capital loss carryforward valuation
allowance, $396 million related to a decrease in certain other valuation allowances associated with foreign jurisdictions and
$298 million associated with tax exempt interest income. These items were partially offset by charges of $632 million related
to uncertain tax positions.
For the year ended December 31, 2012, the effective tax rate on income from continuing operations was (27.9) percent. The
effective tax rate on income from continuing operations differs from the statutory tax rate of 35 percent primarily due to
decreases in the U.S. Life Insurance Companies’ capital loss carryforward valuation allowance of $1.9 billion related to the
actual and projected gains from the U.S. Life Insurance Companies’ available-for-sale securities, and tax effects associated
with tax exempt interest income of $302 million. These items were partially offset by changes in uncertain tax positions of
$446 million.
The following table presents the components of the net deferred tax assets (liabilities):
December 31,
(in millions) 2014 2013
Deferred tax assets:
Losses and tax credit carryforwards $ 18,203 $20,825
Basis Differences on Investments 4,114 4,843
Life Policy Reserves 629 445
Accruals not currently deductible, and other 1,804 2,935
Investments in foreign subsidiaries (58) 1,035
Loss reserve discount 1,378 1,164
Loan loss and other reserves 152 888
Unearned premium reserve reduction 1,269 1,451
Employee benefits 1,543 1,217
Total deferred tax assets 29,034 34,803
Deferred tax liabilities:
Deferred policy acquisition costs (3,003) (3,396)
Flight equipment, fixed assets and intangible assets 28 (2,354)
Unrealized gains related to available for sale debt securities (5,795) (3,693)
Other 220 (571)
Total deferred tax liabilities (8,550) (10,014)
Net deferred tax assets before valuation allowance 20,484 24,789
Valuation allowance (1,739) (3,596)
Net deferred tax assets (liabilities) $ 18,745 $21,193
The following table presents our U.S. consolidated income tax group tax losses and credits carryforwards as of
December 31, 2014 on a tax return basis.
December 31, 2014 Tax Expiration
(in millions) Gross Effected Periods
Net operating loss carryforwards $33,021 $ 11,557 2028 - 2031
Foreign tax credit carryforwards - 7,109 2016 - 2023
Other carryforwards and other - 1,034 Various
Total AIG U.S. consolidated income tax group tax losses and credits carryforwards $ 19,700