INCOME TAXES (TABLES)

9 Months Ended

Sep. 30, 2011

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

The components of income tax expense were as follows (dollars in millions):



	Three months ended					Nine months ended
	September 30,					September 30,
	2011			2010		2011			2010
Current tax expense	$	2.3		$	3.0	$	7.2		$	5.5
Deferred tax provision	32.2			24.9		89.7			60.3
Income tax expense on period income	34.5			27.9		96.9			65.8
Valuation allowance	(143.0		)	—		(143.0		)	—
Total income tax expense (benefit)	$	(108.5	)	$	27.9	$	(46.1	)	$	65.8

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

A reconciliation of the U.S. statutory corporate tax rate to the effective rate reflected in the consolidated statement of operations is as follows:



	Nine months ended
	September 30,
	2011		2010
U.S. statutory corporate rate	35.0	%	35.0	%
Valuation allowance	(54.3	)	—
Other nondeductible benefits	1.4		(.2	)
State taxes	.9		.9
Provision for tax issues, tax credits and other	(.5	)	.4
Effective tax rate	(17.5	)%	36.1	%

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

The components of the Company’s income tax assets and liabilities were as follows (dollars in millions):



	September 30, 2011			December 31, 2010
Deferred tax assets:
Net federal operating loss carryforwards attributable to:
Life insurance subsidiaries	$	614.8		$	681.7
Non-life companies	869.5			870.6
Net state operating loss carryforwards	17.7			17.8
Tax credits	29.8			23.4
Capital loss carryforwards	353.1			339.7
Deductible temporary differences:
Investments	—			5.3
Insurance liabilities	749.5			738.9
Other	43.2			62.8
Gross deferred tax assets	2,677.6			2,740.2
Deferred tax liabilities:
Investments	(26.1		)	—
Present value of future profits and deferred acquisition costs	(677.0		)	(676.3		)
Unrealized appreciation on investments	(333.1		)	(132.3		)
Gross deferred tax liabilities	(1,036.2		)	(808.6		)
Net deferred tax assets before valuation allowance	1,641.4			1,931.6
Valuation allowance	(938.4		)	(1,081.4		)
Net deferred tax assets	703.0			850.2
Current income taxes accrued	(15.8		)	(10.8		)
Income tax assets, net	$	687.2		$	839.4

Summary of Operating Loss Carryforwards [Table Text Block]

As of September 30, 2011, we had $4.2 billion of federal NOLs and $1.0 billion of capital loss carryforwards, which expire as follows (dollars in millions):



Year of expiration	Net operating loss carryforwards (a)						Capital loss		Total loss
	Life			Non-life			carryforwards		carryforwards
2011	$	—		$	.1		$	—	$	.1
2013	—			—			941.5		941.5
2014	—			—			28.6		28.6
2016	—			—			38.8		38.8
2018	1,522.8		(a)	—			—		1,522.8
2021	29.6			—			—		29.6
2022	204.1			—			—		204.1
2023	—			1,996.0		(a)	—		1,996.0
2024	—			3.2			—		3.2
2025	—			118.8			—		118.8
2027	—			216.8			—		216.8
2028	—			.3			—		.3
2029	—			149.0			—		149.0
Total	$	1,756.5		$	2,484.2		$	1,008.9	$	5,249.6

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(a)

The allocation of the NOLs summarized above assumes the IRS does not take an adverse position in the future regarding the tax position we plan to take in our tax returns with respect to the allocation of cancellation of indebtedness income. If the IRS disagrees with the tax position we plan to take with respect to the allocation of cancellation of indebtedness income, and their position prevails, approximately $631 million of the NOLs expiring in 2018 would be characterized as non-life NOLs.