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Income Tax | 12 Months Ended
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Dec. 31, 2011
Income Tax Disclosure [Abstract] |
Income Tax Disclosure [Text Block] | Income Tax Total income tax expense (benefit) is allocated as follows:
| Year Ended December 31
| 2011 |  | 2010 |  | 2009
| (in millions of dollars)
Net Income | $ | 21.8 |  |  | $ | 445.2 |  |  | $ | 439.7 |
Stockholders' Equity - Additional Paid-in Capital |  |  |  |  |
Stock-Based Compensation | (3.3 | ) |  | (2.7 | ) |  | 1.5 |
Stockholders' Equity - Accumulated Other Comprehensive Income (Loss) |  |  |  |  |
Change in Net Unrealized Gains on Securities Not |  |  |  |  |
Other-Than Temporarily Impaired | 799.4 |  |  | 519.1 |  |  | 1,454.9 |
Change in Net Unrealized Gains and Losses on Securities |  |  |  |  |
Other-Than Temporarily Impaired | (1.1 | ) |  | (0.5 | ) |  | 1.6 |
Change in Net Gain on Cash Flow Hedges | 25.2 |  |  | (5.0 | ) |  | (45.3 | )
Change in Adjustment to Reserves for Future Policy and Contract |  |  |  |  |
Benefits, Net of Reinsurance and Other | (703.3 | ) |  | (501.0 | ) |  | (816.6 | )
Change in Foreign Currency Translation Adjustment | — |  |  | 0.6 |  |  | — |
Change in Unrecognized Pension and Postretirement Benefit Costs | (67.4 | ) |  | (12.7 | ) |  | 42.0 |
Stockholders' Equity - Retained Earnings |  |  |  |  |
Adoption of ASC 320 Update - Note 1 | — |  |  | — |  |  | 7.7 |
Total | $ | 71.3 |  |  | $ | 443.0 |  |  | $ | 1,085.5 |
A reconciliation of the income tax expense (benefit) attributable to income from operations before income tax, computed at U.S. federal statutory tax rates, to the income tax expense (benefit) as included in our consolidated statements of income, is as follows. Certain prior year amounts have been reclassified to conform to current year reporting.
| Year Ended December 31
| 2011 |  | 2010 |  | 2009
Statutory Income Tax | 35.0 | % |  | 35.0 | % |  | 35.0 | %
Prior Year Tax Settlements | (14.5 | ) |  | 0.5 |  |  | 0.3 |
Foreign Items | (0.6 | ) |  | (1.3 | ) |  | (0.8 | )
Tax Credits | (7.6 | ) |  | (0.6 | ) |  | — |
Other Items, Net | (3.8 | ) |  | (0.2 | ) |  | (0.5 | )
Effective Tax | 8.5 | % |  | 33.4 | % |  | 34.0 | %
Note 6 - Income Tax - Continued Our deferred income tax asset and liability consists of the following:
| December 31
| 2011 |  | 2010
| (in millions of dollars)
Deferred Tax Liability |  |  |
Deferred Acquisition Costs | $ | 257.0 |  |  | $ | 328.4 |
Unrealized Gains and Losses | 507.8 |  |  | 392.7 |
Other | 138.2 |  |  | 200.6 |
Gross Deferred Tax Liability | 903.0 |  |  | 921.7 |
Deferred Tax Asset |  |  |
Invested Assets | 349.8 |  |  | 317.8 |
Employee Benefits | 262.3 |  |  | 174.2 |
Other | 29.7 |  |  | 16.6 |
Gross Deferred Tax Asset | 641.8 |  |  | 508.6 |
Less Valuation Allowance | — |  |  | 4.1 |
Net Deferred Tax Asset | 641.8 |  |  | 504.5 |
Total Net Deferred Tax Liability | $ | 261.2 |  |  | $ | 417.2 |
Our consolidated statements of income include amounts subject to both domestic and foreign taxation. The income and related tax expense (benefit) are as follows:
| Year Ended December 31
| 2011 |  | 2010 |  | 2009
| (in millions of dollars)
Income Before Tax |  |  |  |  |
United States - Federal | $ | 83.2 |  |  | $ | 1,124.7 |  |  | $ | 1,065.2 |
Foreign | 174.0 |  |  | 206.6 |  |  | 227.1 |
Total | $ | 257.2 |  |  | $ | 1,331.3 |  |  | $ | 1,292.3 |
Current Tax Expense |  |  |  |  |
United States - Federal | $ | 218.4 |  |  | $ | 246.9 |  |  | $ | 283.7 |
Foreign | 12.1 |  |  | 54.1 |  |  | 94.2 |
Total | 230.5 |  |  | 301.0 |  |  | 377.9 |
Deferred Tax Expense (Benefit) |  |  |  |  |
United States - Federal | (230.5 | ) |  | 148.5 |  |  | 91.4 |
Foreign | 21.8 |  |  | (4.3 | ) |  | (29.6 | )
Total | (208.7 | ) |  | 144.2 |  |  | 61.8 |
Total | $ | 21.8 |  |  | $ | 445.2 |  |  | $ | 439.7 |
Note 6 - Income Tax - Continued Effective April 2011, the U.K. government began decreasing its corporation tax rates at a rate of at least one percent per year, with the ultimate goal of reducing the rate from 28 percent to 23 percent. The first income tax rate reduction, which was enacted in the third quarter of 2010 and was effective in April 2011, reduced the tax rate from 28 percent to 27 percent. In the third quarter of 2011, an income tax rate reduction was enacted which reduced the tax rate from 27 percent to 26 percent, retroactive to April 2011, and from 26 percent to 25 percent, effective April 2012. We are required to adjust deferred tax assets and liabilities through income on the date of enactment of a rate change, and as such, we recorded a reduction of $6.8 million and $2.7 million to our income tax expense during 2011 and 2010, respectively. We consider the unremitted earnings of our foreign operations to be permanently invested and therefore have not provided U.S. deferred taxes on the cumulative earnings of our non-U.S. affiliates. Deferred taxes are provided for earnings of non-U.S. affiliates when we plan to remit those earnings. As of December 31, 2011 and 2010, we have not made a provision for U.S. taxes on approximately $884.2 million and $1,027.7 million, respectively, of the excess of the carrying amount for financial reporting over the tax basis of investments in foreign subsidiaries that are essentially permanent in duration. The determination of a deferred tax liability related to investments in these foreign subsidiaries is not practicable. Our consolidated statements of income include the following changes in unrecognized tax benefits:
| December 31
| 2011 |  | 2010 |  | 2009
| (in millions of dollars)
Balance at Beginning of Year | $ | 138.9 |  |  | $ | 146.8 |  |  | $ | 149.8 |
Tax Positions Related to Prior Years |  |  |  |  |
Additions | 4.4 |  |  | 3.6 |  |  | 8.5 |
Subtractions | (11.8 | ) |  | (11.5 | ) |  | (11.5 | )
Settlements with Tax Authorities | (44.6 | ) |  | — |  |  | — |
Balance at End of Year | 86.9 |  |  | 138.9 |  |  | 146.8 |
Less Tax Attributable to Temporary Items Included Above | (86.9 | ) |  | (123.7 | ) |  | (131.6 | )
Total Unrecognized Tax Benefits that if Recognized Would Affect the Effective Tax Rate | $ | — |  |  | $ | 15.2 |  |  | $ | 15.2 |
Included in the balances at December 31, 2011, 2010, and 2009 are $86.9 million, $123.7 million, and $131.6 million, respectively, of unrecognized tax benefits for tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. Other than potential interest and penalties, the disallowance of the shorter deductibility period would not affect our results of operations but would accelerate the payment of cash to the taxing authority to an earlier period. We recognize interest expense and penalties, if applicable, related to unrecognized tax benefits in tax expense net of federal income tax. The total amounts of accrued interest and penalties in our consolidated balance sheets as of December 31, 2011, 2010, and 2009 are $12.3 million, $25.4 million, and $19.9 million, respectively. A reduction of unrecognized tax benefits occurred during 2011 as a result of a settlement with the Internal Revenue Service (IRS), described as follows, and resulted in a reduction of interest expense of $13.1 million. We recognized interest related to unrecognized tax expense in our consolidated statements of income of $5.5 million and $6.5 million during 2010 and 2009, respectively. There were no changes to our unrecognized tax benefits as a result of settlements or lapses in statutes of limitations during 2010 and 2009. It is reasonably possible that unrecognized tax benefits could decrease within the next 12 months by $0 to $73.0 million as a result of additional IRS settlements or lapses in statutes of limitations. We file federal and state income tax returns in the United States and in foreign jurisdictions. We are under continuous examination by the IRS with regard to our U.S. federal income tax returns. During the fourth quarter of 2011, the Congressional Joint Committee on Taxation approved our final settlement with the IRS for tax years 1996 to 2004. The settlement resulted from our administrative appeal of audit adjustments relating primarily to insurance tax reserves and losses incurred by foreign subsidiaries. As a result of the settlement, we recognized in our 2011 operating results a reduction in our federal income taxes of $41.3 million as well as interest income of $17.5 million before tax and $11.4 million after tax. We expect to receive a cash refund of taxes and interest under this settlement of approximately $60.0 million in 2012. Note 6 - Income Tax - Continued During 2010, the IRS completed its examination of tax years 2005 and 2006 and issued a revenue agent's report (RAR) in December 2010. In January 2011, we filed a protest to the RAR with respect to all significant adverse proposed adjustments. Included in 2009 operating results is a refund of interest of $0.3 million before tax and $0.2 million after tax attributable to tax year 1998. Tax years subsequent to 2006 remain subject to examination by tax authorities in the U.S. Tax years subsequent to 2009 remain subject to examination in major foreign jurisdictions. We believe sufficient provision has been made for all proposed and potential adjustments for years that are not closed by the statute of limitations in all major tax jurisdictions and that any such adjustments would not have a material adverse effect on our financial position, liquidity, or results of operations. However, it is possible that the resolution of income tax matters could produce quarterly volatility in our results of operations in future periods. In March 2010, the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 were signed into law. Among other things, the new legislation reduces the tax benefits available to an employer that receives a postretirement prescription drug coverage subsidy from the federal government under the Medicare Prescription Drug, Improvement and Modernization Act of 2003. Under the new legislation, to the extent our future postretirement prescription drug coverage expenses are reimbursed under the subsidy program, the expenses covered by the subsidy will no longer be tax deductible after 2012. Employers that receive the subsidy were required to recognize the deferred tax effects relating to the future postretirement prescription drug coverage in the period the legislation was enacted. Our income tax expense for the year ended December 31, 2010 includes a non-cash tax charge of $10.2 million which was recorded in the first quarter of 2010 to reflect the impact of the tax law change. As of December 31, 2011, we had no net operating loss carryforward for U.S. income taxes. In 2011, as part of the previously described IRS settlement, we released the $4.1 million valuation allowance related to basis differences in foreign subsidiaries and net operating loss carryforwards in foreign jurisdictions for which we previously believed we would not realize a tax benefit. Total income taxes paid net of refunds during 2011, 2010, and 2009 were $303.5 million, $273.0 million, and $381.6 million, respectively.

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- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 136, 172 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 109 -Paragraph 43, 44, 45, 46, 47, 48, 49 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(h)) -URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690 + Details
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