MetLife 2010 Annual Report Download - page 201

The reconciliation of the income tax provision at the U.S. statutory rate to the provision for income tax as reported for continuing operations
wasasfollows:
2010 2009 2008
Years Ended December 31,
(In millions)
TaxprovisionatU.S.statutoryrate .................................... $1,385 $(1,517) $1,771
Tax effect of:
Tax-exemptinvestmentincome ..................................... (242) (288) (254)
Stateandlocalincometax ........................................ 9 17 2
Prioryeartax................................................. 59 (26) 53
Taxcredits .................................................. (82) (87) (58)
Foreigntaxratedifferentialandchangeinvaluationallowance ................. 26 (118) 65
Other,net................................................... 26 4 1
Provisionforincometaxexpense(benefit)................................ $1,181 $(2,015) $1,580
Deferred income tax represents the tax effect of the differences between the book and tax basis of assets and liabilities. Net deferred
income tax assets and liabilities consisted of the following:
2010 2009
December 31,
(In millions)
Deferred income tax assets:
Policyholderliabilitiesandreceivables ....................................... $ 5,169 $3,929
Netoperatinglosscarryforwards .......................................... 1,400 871
Employeebenefits.................................................... 664 661
Capitallosscarryforwards............................................... 408 551
Taxcreditcarryforwards ................................................ 459 401
Netunrealizedinvestmentlosses .......................................... — 816
Litigation-relatedandgovernmentmandated................................... 227 240
Other ............................................................ 331 276
8,658 7,745
Less:Valuationallowance............................................... 261 217
8,397 7,528
Deferred income tax liabilities:
Investments,includingderivatives.......................................... 1,253 1,434
Intangibles......................................................... 3,068 334
Netunrealizedinvestmentgains........................................... 1,490 —
DAC............................................................. 4,342 4,439
Other ............................................................ 125 93
10,278 6,300
Netdeferredincometaxasset(liability)........................................ $(1,881) $1,228
Domestic net operating loss carryforwards of $2,181 million at December 31, 2010 will expire beginning in 2020. State net operating loss
carryforwards of $123 million at December 31, 2010 will expire beginning in 2011. Foreign net operating loss carryforwards of $2,132 million
at December 31, 2010 were generated in various foreign countries with expiration periods of five years to indefinite expiration. Domestic
capital loss carryforwards of $1,130 million at December 31, 2010 will expire beginning in 2011. Foreign capital loss carryforwards of
$35 million at December 31, 2010 will expire beginning in 2014. Tax credit carryforwards were $459 million at December 31, 2010.
The Company has recorded a valuation allowance related to tax benefits of certain state and foreign net operating and capital loss
carryforwards and certain foreign unrealized losses. The valuation allowance reflects management’s assessment, based on available
information, that it is more likely than not that the deferred income tax asset for certain foreign net operating and capital loss carryforwards and
certain foreign unrealized losses will not be realized. The tax benefit will be recognized when management believes that it is more likely than
not that these deferred income tax assets are realizable. In 2010, the Company recorded an overall increase to the deferred tax valuation
allowance of $44 million, comprised of a decrease of $2 million related to certain foreign unrealized losses, an increase of $18 million related
to certain foreign capital loss carryforwards, an increase of $28 million related to certain state and foreign net operating loss carryforwards.
The Company has not provided U.S. deferred taxes on cumulative earnings of certain non-U.S. affiliates and associated companies that
have been reinvested indefinitely. These earnings relate to ongoing operations and have been reinvested in active non-U.S. business
F-112 MetLife, Inc.
MetLife, Inc.
Notes to the Consolidated Financial Statements — (Continued)