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Income Tax | 12 Months Ended
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Dec. 31, 2014
Income Tax Disclosure [Abstract] |
Income Tax Disclosure | Income Tax Total income tax expense (benefit) is allocated as follows:
| Year Ended December 31
| 2014 |  | 2013 |  | 2012
| (in millions of dollars)
Net Income | $ | 113.8 |  |  | $ | 347.1 |  |  | $ | 355.1 |
Stockholders' Equity - Additional Paid-in Capital |  |  |  |  |
Stock-Based Compensation | (3.0 | ) |  | (0.8 | ) |  | 3.5 |
Stockholders' Equity - Accumulated Other Comprehensive Income (Loss) |  |  |  |  |
Change in Net Unrealized Gain on Securities Before Adjustment | 725.8 |  |  | (1,102.8 | ) |  | 467.7 |
Change in Adjustment to Deferred Acquisition Costs and Reserves for Future Policy and Contract Benefits, Net of Reinsurance | (665.1 | ) |  | 743.3 |  |  | (325.6 | )
Change in Net Gain on Cash Flow Hedges | (2.0 | ) |  | (1.3 | ) |  | (4.3 | )
Change in Unrecognized Pension and Postretirement Benefit Costs | (92.4 | ) |  | 185.2 |  |  | (68.0 | )
Total | $ | 77.1 |  |  | $ | 170.7 |  |  | $ | 428.4 |
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
| 2014 |  | 2013 |  | 2012
Statutory Income Tax | 35.0 | % |  | 35.0 | % |  | 35.0 | %
Foreign Items | (4.3 | ) |  | (1.8 | ) |  | (1.9 | )
Tax Credits | (8.1 | ) |  | (3.4 | ) |  | (2.7 | )
Tax-exempt Investment Income | (2.3 | ) |  | (1.0 | ) |  | (0.9 | )
Other Items, Net | 1.3 |  |  | — |  |  | (1.1 | )
Effective Tax | 21.6 | % |  | 28.8 | % |  | 28.4 | %
Our net deferred tax liability consists of the following:
| December 31
| 2014 |  | 2013
| (in millions of dollars)
Deferred Tax Liability |  |  |
Deferred Acquisition Costs | $ | 97.4 |  |  | $ | 70.0 |
Fixed Assets | 93.0 |  |  | 80.3 |
Invested Assets | 1,999.2 |  |  | 1,274.3 |
Other | 64.6 |  |  | 54.4 |
Gross Deferred Tax Liability | 2,254.2 |  |  | 1,479.0 |
Deferred Tax Asset |  |  |
Reserves | 1,919.2 |  |  | 1,180.1 |
Employee Benefits | 254.0 |  |  | 151.2 |
Other | 2.6 |  |  | 3.4 |
Gross Deferred Tax Asset | 2,175.8 |  |  | 1,334.7 |
Total Net Deferred Tax Liability | $ | 78.4 |  |  | $ | 144.3 |
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
| 2014 |  | 2013 |  | 2012
| (in millions of dollars)
Income Before Tax |  |  |  |  |
United States - Federal | $ | 376.9 |  |  | $ | 1,072.0 |  |  | $ | 1,128.4 |
Foreign | 150.3 |  |  | 133.2 |  |  | 121.1 |
Total | $ | 527.2 |  |  | $ | 1,205.2 |  |  | $ | 1,249.5 |
Current Tax Expense (Benefit) |  |  |  |  |
United States - Federal | $ | 128.4 |  |  | $ | 277.9 |  |  | $ | 164.4 |
Foreign | (25.1 | ) |  | 18.7 |  |  | 42.2 |
Total | 103.3 |  |  | 296.6 |  |  | 206.6 |
Deferred Tax Expense (Benefit) |  |  |  |  |
United States - Federal | (44.4 | ) |  | 47.3 |  |  | 173.5 |
Foreign | 54.9 |  |  | 3.2 |  |  | (25.0 | )
Total | 10.5 |  |  | 50.5 |  |  | 148.5 |
Total | $ | 113.8 |  |  | $ | 347.1 |  |  | $ | 355.1 |
The U.K. government enacted income tax rate reductions during each of the years 2010 through 2013. During 2013, the rate was reduced from 23 percent to 21 percent effective April 2014, and to 20 percent effective April 2015. Although the rate reductions in each instance became or will become effective during a subsequent year, we are required to adjust deferred tax assets and liabilities through income on the date of enactment of a rate change. As a result, we recorded income tax benefits of $6.3 million and $9.3 million for the tax rate reductions enacted during 2013 and 2012, 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, 2014, we have not made a provision for U.S. taxes on approximately $1 billion 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
| 2014 |  | 2013 |  | 2012
| (in millions of dollars)
Balance at Beginning of Year | $ | 18.4 |  |  | $ | 17.5 |  |  | $ | 86.9 |
Tax Positions Taken During Prior Years |  |  |  |  |
Additions | 1.7 |  |  | 5.7 |  |  | 13.3 |
Subtractions | — |  |  | — |  |  | (0.6 | )
Settlements with Tax Authorities | (0.6 | ) |  | (4.8 | ) |  | (23.5 | )
Lapses of Statute of Limitations | — |  |  | — |  |  | (61.1 | )
Tax Positions Taken During Current Year | 0.3 |  |  | — |  |  | 2.5 |
Balance at End of Year | 19.8 |  |  | 18.4 |  |  | 17.5 |
Less Tax Attributable to Temporary Items Included Above | (10.4 | ) |  | (10.2 | ) |  | (15.0 | )
Total Unrecognized Tax Benefits that if Recognized Would Affect the Effective Tax Rate | $ | 9.4 |  |  | $ | 8.2 |  |  | $ | 2.5 |
Included in the balances at December 31, 2014, 2013, and 2012 are $10.4 million, $10.2 million, and $15.0 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. We recognize interest expense and penalties, if applicable, related to unrecognized tax benefits in tax expense net of federal income tax. We recognized an increase (reduction) in interest expense related to unrecognized tax benefits of $0.2 million, $(1.1) million, and $(10.4) million during 2014, 2013, and 2012, respectively. The total amounts of accrued interest and penalties related to unrecognized tax benefits in our consolidated balance sheets as of December 31, 2014 and 2013 were $1.0 million and $0.8 million, respectively. It is reasonably possible that unrecognized tax benefits could decrease within the next 12 months by up to $19.3 million as a result of resolution of audit activity with the Internal Revenue Service (IRS). 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 2013, our appeal of tax years 2005 and 2006 was effectively settled with the approval of the Congressional Joint Committee on Taxation. As a result of the settlement, we received a cash refund of taxes and interest of $17.5 million in 2014. During 2012, the IRS audit of our 2009 and 2010 years commenced, and we also finalized all issues with the IRS related to our 2007 and 2008 years, resulting in a reduction of our federal income taxes of $11.0 million. In the first quarter of 2015, we reached a tentative settlement of our 2009 and 2010 tax years with the IRS and expect to finalize the settlement of these years in 2015. As part of the settlement with the IRS of the 2009 and 2010 tax years, we also resolved claims for refund we filed related to tax credits for years 2003 through 2012 and expect to record an immaterial increase in net income during 2015. Tax years subsequent to 2008 remain subject to examination by tax authorities in the U.S., and tax years subsequent to 2012 remain subject to examination in major foreign jurisdictions. We believe sufficient provision has been made for all 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. In January 2013, the American Taxpayer Relief Act retroactively reinstated the active financing income exemption to the beginning of 2012 which affects the amount of earnings from foreign subsidiaries that is taxed annually, regardless of whether foreign earnings are repatriated. Our 2012 income tax expense reflected the taxation of all active financing income from our foreign subsidiaries as required under the law in place prior to the reinstatement. In 2013, we reversed the amounts recorded in 2012 and recorded a reduction in income tax expense of $0.9 million to reflect the reinstatement of the exemption of active financing income. The active financing income exemption expired again for tax years beginning on or after January 1, 2015, the effect of which is expected to be immaterial in 2015. As of December 31, 2014 and 2013, we had no net operating loss carryforward for U.S. income taxes. We record a valuation allowance to reduce deferred tax assets to the amount that is more likely than not to be realized. As of December 31, 2014 and 2013, we had no valuation allowance. Total income taxes paid net of refunds during 2014, 2013, and 2012 were $155.7 million, $398.1 million, and $185.0 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 15 -URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319 Reference 2: 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=26873400&loc=d3e23780-122690 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph h -Article 4 Reference 4: 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 5: 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 6: 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 + Details
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