Accounting Developments

9 Months Ended

Sep. 30, 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 expanded our disclosures, but had no effect on our financial position or results of operations.
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				Effect			Historical						Effect
	Accounting		As		of			Accounting			As			of
	Method		Adjusted		Change			Method			Adjusted			Change
	(in millions of dollars, except share data)
	Three Months Ended September 30, 2014							Nine Months Ended September 30, 2014
Consolidated Statements of Income
Net Investment Income	$	606.4	$	611.3	$	4.9		$	1,848.0		$	1,859.5		$	11.5
Income Tax - Current	58.8		66.8		8.0			167.1			191.2			24.1
Income Tax - Deferred	32.2		31.1		(1.1		)	125.5			121.1			(4.4		)
Net Income	221.1		219.1		(2.0		)	692.5			684.3			(8.2		)
Net Income Per Common Share
Basic	$	0.87	$	0.86	$	(0.01	)	$	2.70		$	2.67		$	(0.03	)
Assuming Dilution	$	0.87	$	0.86	$	(0.01	)	$	2.69		$	2.66		$	(0.03	)
Consolidated Statements of Comprehensive Income
Net Income	$	221.1	$	219.1	$	(2.0	)	$	692.5		$	684.3		$	(8.2	)
Consolidated Statements of Cash Flows
Net Income								$	692.5		$	684.3		$	(8.2	)
Change in Income Taxes								188.7			208.4			19.7
Non-cash Components of Net Investment Income								(129.4		)	(140.9		)	(11.5		)
	December 31, 2014							September 30, 2014
Consolidated Balance Sheets
Other Long-term Investments	$	591.9	$	545.0	$	(46.9	)	$	558.8		$	516.7		$	(42.1	)
Deferred Income Tax	78.4		62.0		(16.4		)	432.7			418.0			(14.7		)
Retained Earnings	7,332.8		7,302.3		(30.5		)	8,658.0			8,630.6			(27.4		)

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, 2018	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.
ASC 944 "Financial Services-Insurance"	This update is intended to improve disclosures for short-duration insurance contracts by requiring the disclosure of disaggregated incurred and paid claims development information, methodologies and assumptions used in estimating claim liabilities, and quantitative claims frequency information. The guidance is to be applied retrospectively.	January 1, 2016 for annual reporting period disclosures and January 1, 2017 for interim reporting period disclosures.	The adoption of this update may result in additional disclosures but will not have an effect on our financial position or results of operations.
ASC 820 "Fair Value Measurement"	This update eliminates the requirement to categorize within the fair value hierarchy table investments whose fair value is measured at net asset value using the practical expedient. Instead, entities will be required to disclose the fair value of these investments so that financial statement users can reconcile amounts reported in the fair value hierarchy table to the amounts reported on the consolidated balance sheets. The guidance is to be applied retrospectively.	January 1, 2016	The adoption of this update will modify our disclosures but will not have an effect on our financial position or results of operations.