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SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT
 12 Months Ended
Dec. 31, 2013
SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT  
SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT

SCHEDULE II —
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
STATEMENTS OF OPERATIONS

($ in millions)
   Year Ended December 31,  
 
   2013   2012   2011  

Revenues

                    

Investment income, less investment expense

   $ 3   $ 6   $ 16  

Realized capital gains and losses

     —     —     28  

Other income

     42     10     9  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

 

     45     16     53  

Expenses

    
 		    
 		    
 		  

Interest expense

     366     372     365  

Loss on extinguishment of debt

     491     —     —  

Pension and other postretirement benefit expense

     (184 )   —     —  

Other operating expenses

     30     22     63  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

 

     703     394     428  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Loss from operations before income tax benefit and equity in net income of subsidiaries

    
(658
)		  
(378
)		  
(375
)

Income tax benefit

    
(251
)		  
(137
)		  
(135
)
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Loss before equity in net income of subsidiaries

     (407 )   (241 )   (240 )

Equity in net income of subsidiaries

    
2,687		    
2,547		    
1,027		  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net income

     2,280     2,306     787  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Preferred stock dividends

    
17		    
—		    
—		  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net income available to common shareholders

    
2,263		    
2,306		    
787		  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Other comprehensive (loss) income, after-tax

    
 		    
 		    
 		  

Changes in:

                    

Unrealized net capital gains and losses

     (1,188 )   1,434     452  

Unrealized foreign currency translation adjustments

     (32 )   14     (12 )

Unrecognized pension and other postretirement benefit cost

     1,091     (302 )   (239 )
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Other comprehensive (loss) income, after-tax

     (129 )   1,146     201  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Comprehensive income

   $ 2,151   $ 3,452   $ 988  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
               

SCHEDULE II (CONTINUED) —
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
STATEMENTS OF FINANCIAL POSITION

($ in millions, except par value data)
   December 31,  
 
   2013   2012  

Assets

              

Investments in subsidiaries

   $ 26,813   $ 27,403  

Fixed income securities, at fair value (amortized cost $210 and $255)

     213     259  

Short-term investments, at fair value (amortized cost $565 and $133)

     565     133  

Cash

     105     4  

Receivable from subsidiaries

     311     307  

Prepaid pension benefit asset

     401     —  

Deferred income taxes

     —     496  

Other assets

     110     271  
           
​ ​ ​ ​ ​ ​ ​ ​

Total assets

   $ 28,518   $ 28,873  
           
​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​
           

Liabilities

    
 		    
 		  

Long-term debt

   $ 6,157   $ 6,012  

Pension and other postretirement benefit obligations

     358     1,936  

Deferred compensation

     255     227  

Dividends payable to shareholders

     131     5  

Deferred income taxes

     38     —  

Other liabilities

     99     113  
           
​ ​ ​ ​ ​ ​ ​ ​

Total liabilities

     7,038     8,293  
           
​ ​ ​ ​ ​ ​ ​ ​

Shareholders' equity

    
 		    
 		  

Preferred stock and additional capital paid-in, $1 par value, 25 million shares authorized, 32.3 thousand shares issued and outstanding as of December 31, 2013 and none issued and outstanding as of December 31, 2012, $807.5 aggregate liquidation preference

     780     —  

Common stock, $.01 par value, 2.0 billion shares authorized and 900 million issued, 449 million and 479 million shares outstanding

     9     9  

Additional capital paid-in

     3,143     3,162  

Retained income

     35,580     33,783  

Deferred ESOP expense

     (31 )   (41 )

Treasury stock, at cost (451 million and 421 million shares)

     (19,047 )   (17,508 )

Accumulated other comprehensive income:

              

Unrealized net capital gains and losses

     1,646     2,834  

Unrealized foreign currency translation adjustments

     38     70  

Unrealized pension and other postretirement benefit cost

     (638 )   (1,729 )
           
​ ​ ​ ​ ​ ​ ​ ​

Total accumulated other comprehensive income

     1,046     1,175  
           
​ ​ ​ ​ ​ ​ ​ ​

Total shareholders' equity

     21,480     20,580  
           
​ ​ ​ ​ ​ ​ ​ ​

Total liabilities and shareholders' equity

   $ 28,518   $ 28,873  
           
​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​
           

SCHEDULE II (CONTINUED) —
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
STATEMENTS OF CASH FLOWS

($ in millions)
   Year Ended December 31,  
 
   2013   2012   2011  

Cash flows from operating activities

                    

Net income

   $ 2,280   $ 2,306   $ 787  

Adjustments to reconcile net income to net cash provided by operating activities:

                    

Equity in net income of subsidiaries

     (2,687 )   (2,547 )   (1,027 )

Dividends received from subsidiaries

     1,992     1,038     878  

Loss on extinguishment of debt

     491     —     —  

Realized capital gains and losses

     —     —     (28 )

Changes in:

                    

Pension and other postretirement benefits

     (184 )   —     —  

Income taxes

     113     (4 )   7  

Operating assets and liabilities

     25     59     70  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net cash provided by operating activities

     2,030     852     687  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Cash flows from investing activities

    
 		    
 		    
 		  

Proceeds from sales of investments

     —     92     1,045  

Investment purchases

     (156 )   —     (653 )

Investment collections

     200     100     —  

Return of capital from subsidiaries

     37     154     27  

Change in short-term investments, net

     (450 )   15     1,282  

Acquisition of subsidiary, net

     —     —     (1,009 )
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net cash (used in) provided by investing activities

     (369 )   361     692  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Cash flows from financing activities

    
 		    
 		    
 		  

Proceeds from issuance of long-term debt

     2,271     493     —  

Repayment of long-term debt

     (2,627 )   (352 )   —  

Proceeds from issuance of preferred stock

     781     —     —  

Dividends paid on common stock

     (352 )   (534 )   (435 )

Dividends paid on preferred stock

     (6 )   —     —  

Treasury stock purchases

     (1,834 )   (913 )   (953 )

Shares reissued under equity incentive plans, net

     170     85     19  

Excess tax benefits on share-based payment arrangements

     38     10     (5 )

Other

     (1 )   (3 )   —  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net cash used in financing activities

     (1,560 )   (1,214 )   (1,374 )
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Net increase (decrease) in cash

    
101		    
(1
)		  
5		  

Cash at beginning of year

     4     5     —  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​

Cash at end of year

   $ 105   $ 4   $ 5  
               
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​
               

SCHEDULE II (CONTINUED) —
CONDENSED FINANCIAL INFORMATION OF REGISTRANT
NOTES TO CONDENSED FINANCIAL INFORMATION

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1.     General

       The financial statements of the Registrant should be read in conjunction with the consolidated financial statements and notes thereto included in Item 8. The long-term debt presented in Note 13 "Capital Structure" are direct obligations of the Registrant, with the exception of the $44 million of synthetic lease obligations as of both December 31, 2013 and 2012. A majority of the pension and other postretirement benefits plans presented in Note 18 "Benefit Plans" are direct obligations of the Registrant. Effective November 30, 2011, the Registrant became the sponsor of a majority of the pension benefit plans presented in Note 18. Prior to November 30, 2011, a subsidiary of the Registrant was the sponsor of these plans.

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2.    Supplemental Disclosures of Non-Cash Investing Activity and Cash Flow Information

       The Registrant's assumption of the obligations associated with the pension benefit plans previously sponsored by a subsidiary of the Registrant resulted in a non-cash decrease in the Registrant's investment in subsidiaries of $713 million, after-tax in 2011.

       The Registrant paid $359 million, $364 million and $360 million of interest on debt in 2013, 2012 and 2011, respectively.