Accounting Developments

3 Months Ended

Mar. 31, 2015

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Accounting Developments

Accounting Developments

Accounting Updates Adopted in 2015:

Accounting Standards Codification (ASC)	Description	Date of Adoption	Effect on Financial Statements
ASC 860 "Transfers and Servicing"	This update changed the accounting for repurchase-to-maturity transactions and linked repurchase financings to secured borrowing accounting, which is consistent with the accounting for other repurchase agreements. The update also required disclosures for repurchase agreements, securities lending transactions, and repurchase-to-maturity transactions.	January 1, 2015, except for certain disclosures, which were effective April 1, 2015.	The adoption of this update had no effect on our financial position or results of operations, but will expand our disclosures effective with the second quarter of 2015.
ASC 323 "Investments - Equity Method and Joint Ventures"	This update permitted entities to make an accounting policy election to account for investments in qualified affordable housing projects using the proportional amortization method if certain conditions are met. Under the proportional amortization method, an entity amortizes the initial cost of the investment in proportion to the tax credits and other tax benefits received and recognizes the net investment performance in the income statement as a component of income tax expense (benefit). Additional disclosures concerning investments in qualified affordable housing projects were also required. We elected to adopt this guidance and applied the amendments in the update retrospectively.	January 1, 2015	The cumulative effect at January 1, 2014, was a $19.2 million reduction in stockholders' equity. The following table summarizes the effects of our retrospective adoption on periods reported herein.

	Historical
	Accounting			As			Effect of
	Method			Adjusted			Change
	(in millions of dollars, except share data)
At or for the Three Months Ended March 31, 2014
Consolidated Balance Sheets
Other Long-term Investments	$	565.0		$	530.8		$	(34.2	)
Deferred Income Tax	312.6			300.7			(11.9		)
Retained Earnings	8,273.8			8,251.5			(22.3		)
Consolidated Statements of Income
Net Investment Income	$	612.5		$	615.8		$	3.3
Income Tax - Current	29.7			37.8			8.1
Income Tax - Deferred	67.9			66.2			(1.7		)
Net Income	228.9			225.8			(3.1		)
Net Income Per Common Share
Basic	$	0.88		$	0.87		$	(0.01	)
Assuming Dilution	$	0.88		$	0.86		$	(0.02	)
Consolidated Statements of Comprehensive Income
Net Income	$	228.9		$	225.8		$	(3.1	)
Consolidated Statements of Cash Flows
Net Income	$	228.9		$	225.8		$	(3.1	)
Change in Income Taxes	136.5			142.9			6.4
Non-cash Components of Net Investment Income	(96.7		)	(100.0		)	(3.3		)
December 31, 2014
Consolidated Balance Sheets
Other Long-term Investments	$	591.9		$	545.0		$	(46.9	)
Deferred Income Tax	78.4			62.0			(16.4		)
Retained Earnings	7,332.8			7,302.3			(30.5		)

Accounting Updates Outstanding:

ASC	Description	Date of Adoption	Effect on Financial Statements
ASC 606 "Revenue from Contracts with Customers"	This update supersedes virtually all existing guidance regarding the recognition of revenue from customers. Specifically excluded from the scope of this update are insurance contracts, although our fee-based service products are included within the scope. The core principle of this guidance is that revenue recognition should depict the transfer of goods or services to customers in an amount that reflects the consideration to which an entity expects to be entitled in exchange for those goods or services. The guidance is to be applied retrospectively.	January 1, 2017	The adoption of this update will not have a material effect on our financial position or results of operations.
ASC 835 "Interest-Imputation of Interest"	This update simplifies the presentation of deferred debt issuance costs by requiring these costs to be presented in the balance sheet as a reduction of the carrying amount of the debt liability to which the deferred costs relate, rather than classifying the deferred costs as an asset. This classification is consistent with the treatment of debt discounts. The guidance is to be applied retrospectively.	January 1, 2016	The adoption of this update will result in reclassification adjustments to our consolidated balance sheets but will not have an effect on our financial position or results of operations.