Stockholders' Equity

9 Months Ended

Sep. 30, 2012

Stockholders' Equity

Stockholders' Equity

9.  Stockholders’ Equity

Common Stock

On September 28, 2012, we paid a quarterly dividend of $61.6 million, equal to $0.21 per share, to stockholders of record as of September 6, 2012. On June 29, 2012, we paid a quarterly dividend of $53.7 million, equal to $0.18 per share, to stockholders of record as of June 11, 2012. On March 30, 2012, we paid a quarterly dividend of $54.3 million, equal to $0.18 per share, to stockholders of record as of March 12, 2012.

Reconciliation of Outstanding Shares

	Series A	Series B	Common
	preferred stock	preferred stock	stock
	(in millions)
Outstanding shares at January 1, 2011	3.0	10.0	320.4
Shares issued	—	—	1.7
Treasury stock acquired	—	—	(17.0	)
Outstanding shares at September 30, 2011	3.0	10.0	305.1
Outstanding shares at January 1, 2012	3.0	10.0	301.1
Shares issued	—	—	3.0
Treasury stock acquired	—	—	(10.5	)
Outstanding shares at September 30, 2012	3.0	10.0	293.6

In May 2011, our Board of Directors reinstated the November 2007 share repurchase program. In July 2011, we completed this program. In August 2011, our Board of Directors authorized a share repurchase program of up to $200.0 million of our outstanding common stock. We completed this program in September 2011. In November 2011, our Board of Directors authorized a share repurchase program of up to $100.0 million of our outstanding common stock. We completed this program in December 2011. In February 2012, our Board of Directors authorized a share repurchase program of up to $100.0 million of our outstanding common stock. We completed this program in May 2012. In May 2012, our Board of Directors authorized a share repurchase program of up to $200.0 million of our outstanding common stock.

Our Board of Directors has authorized various repurchase programs under which we are allowed to purchase shares of our outstanding common stock. Shares repurchased under these programs are accounted for as treasury stock, carried at cost and reflected as a reduction to stockholders’ equity.

Other Comprehensive Income

	For the three months ended									For the nine months ended
	September 30, 2012									September 30, 2012
	Pre-Tax			Tax			After-Tax			Pre-Tax			Tax			After-Tax
	(in millions)
Net unrealized gains on available-for-sale securities during the period	$	810.7		$	(273.5	)	$	537.2		$	1,436.7		$	(468.9	)	$	967.8
Reclassification adjustment for losses included in net income	56.4			(20.3		)	36.1			96.5			(34.3		)	62.2
Adjustments for assumed changes in amortization patterns	(145.8		)	51.1			(94.7		)	(225.4		)	78.9			(146.5		)
Adjustments for assumed changes in policyholder liabilities	(271.5		)	88.9			(182.6		)	(474.1		)	148.6			(325.5		)
Net unrealized gains on available-for-sale securities	449.8			(153.8		)	296.0			833.7			(275.7		)	558.0
Noncredit component of impairment losses on fixed maturities, available-for-sale during the period	(9.2		)	3.2			(6.0		)	(31.2		)	10.9			(20.3		)
Adjustments for assumed changes in amortization patterns	3.0			(1.0		)	2.0			8.5			(3.0		)	5.5
Noncredit component of impairment losses on fixed maturities, available-for-sale (1)	(6.2		)	2.2			(4.0		)	(22.7		)	7.9			(14.8		)
Net unrealized gains (losses) on derivative instruments during the period	(23.9		)	8.3			(15.6		)	5.6			(2.0		)	3.6
Reclassification adjustment for (gains) losses included in net income	(0.5		)	0.2			(0.3		)	10.2			(3.7		)	6.5
Adjustments for assumed changes in amortization patterns	(3.5		)	1.2			(2.3		)	26.4			(9.3		)	17.1
Net unrealized gains (losses) on derivative instruments	(27.9		)	9.7			(18.2		)	42.2			(15.0		)	27.2
Foreign currency translation adjustment	49.2			(0.6		)	48.6			11.2			16.0			27.2
Unrecognized postretirement benefit obligation during the period	—			—			—			—			—			—
Amortization of prior service cost and actuarial loss included in net periodic benefit cost	13.4			(4.7		)	8.7			40.3			(14.1		)	26.2
Net unrecognized postretirement benefit obligation	13.4			(4.7		)	8.7			40.3			(14.1		)	26.2
Other comprehensive income	$	478.3		$	(147.2	)	$	331.1		$	904.7		$	(280.9	)	$	623.8

	For the three months ended									For the nine months ended
	September 30, 2011									September 30, 2011
	Pre-Tax			Tax			After-Tax			Pre-Tax			Tax			After-Tax
	(in millions)
Net unrealized gains on available- for-sale securities during the period	$	58.9		$	(2.8	)	$	56.1		$	605.8		$	(207.0	)	$	398.8
Reclassification adjustment for losses included in net income	7.4			(4.4		)	3.0			34.5			(12.5		)	22.0
Adjustments for assumed changes in amortization patterns	21.6			(7.6		)	14.0			(98.6		)	34.5			(64.1		)
Adjustments for assumed changes in policyholder liabilities	(71.8		)	6.1			(65.7		)	(33.3		)	6.1			(27.2		)
Net unrealized gains on available- for-sale securities	16.1			(8.7		)	7.4			508.4			(178.9		)	329.5
Noncredit component of impairment losses on fixed maturities, available-for-sale during the period	35.4			(12.3		)	23.1			83.5			(29.9		)	53.6
Adjustments for assumed changes in amortization patterns	(6.4		)	2.2			(4.2		)	(12.9		)	4.5			(8.4		)
Noncredit component of impairment losses on fixed maturities, available-for-sale (1)	29.0			(10.1		)	18.9			70.6			(25.4		)	45.2
Net unrealized gains on derivative instruments during the period	73.0			(25.5		)	47.5			40.0			(14.0		)	26.0
Reclassification adjustment for (gains) losses included in net income	(0.8		)	0.2			(0.6		)	14.2			(5.1		)	9.1
Adjustments for assumed changes in amortization patterns	(22.8		)	8.0			(14.8		)	(24.0		)	8.4			(15.6		)
Net unrealized gains on derivative instruments	49.4			(17.3		)	32.1			30.2			(10.7		)	19.5
Foreign currency translation adjustment	(138.5		)	2.1			(136.4		)	(46.0		)	(18.9		)	(64.9		)
Unrecognized postretirement benefit obligation during the period (2)	(312.9		)	109.5			(203.4		)	(276.8		)	96.9			(179.9		)
Amortization of prior service cost and actuarial loss included in net periodic benefit cost	3.0			(1.1		)	1.9			8.8			(3.1		)	5.7
Net unrecognized postretirement benefit obligation	(309.9		)	108.4			(201.5		)	(268.0		)	93.8			(174.2		)
Other comprehensive income (loss)	$	(353.9	)	$	74.4		$	(279.5	)	$	295.2		$	(140.1	)	$	155.1

(1)   Represents the net impact of (1) unrealized gains resulting from reclassification of previously recognized noncredit impairment losses from OCI to net realized capital gains (losses) for fixed maturities with bifurcated OTTI that had additional credit losses or fixed maturities that previously had bifurcated OTTI that have now been sold or are intended to be sold and (2) unrealized losses resulting from reclassification of noncredit impairment losses for fixed maturities with bifurcated OTTI from net realized capital gains (losses) to OCI.

(2)   Includes the impact of the quarterly remeasurement of plan assets and liabilities in 2011 resulting from curtailment accounting associated with our exited group medical insurance business.

Accumulated Other Comprehensive Income

			Noncredit
	Net unrealized		component of			Net unrealized		Foreign			Unrecognized			Accumulated
	gains on		impairment losses			gains on		currency			postretirement			other
	available-for-sale		on fixed maturities			derivative		translation			benefit			comprehensive
	securities		available-for-sale			instruments		adjustment			obligation			income
	(in millions)
Balances at January 1, 2011	$	652.1	$	(198.2	)	$	11.3	$	29.7		$	(188.2	)	$	306.7
Other comprehensive income	329.5		45.2			19.5		(64.6		)	(174.2		)	155.4
Balances at September 30, 2011	$	981.6	$	(153.0	)	$	30.8	$	(34.9	)	$	(362.4	)	$	462.1
Balances at January 1, 2012	$	860.7	$	(167.2	)	$	34.9	$	(109.3	)	$	(361.1	)	$	258.0
Other comprehensive income	558.0		(14.8		)	27.2		26.2			26.2			622.8
Balances at September 30, 2012	$	1,418.7	$	(182.0	)	$	62.1	$	(83.1	)	$	(334.9	)	$	880.8

Noncontrolling Interest

Interest held by unaffiliated parties in consolidated entities are reflected in noncontrolling interest, which represents the noncontrolling partners’ share of the underlying net assets of our consolidated subsidiaries. Noncontrolling interest that is not redeemable is reported in the equity section of the consolidated statements of financial position.

The noncontrolling interest holders in certain of our subsidiaries maintain an equity interest that is redeemable at the option of the holder, which may be exercised on varying dates beginning in 2014. Since redemption of the noncontrolling interest is outside of our control, this interest is presented on the consolidated statements of financial position line item titled “Redeemable noncontrolling interest.” If the interest were to be redeemed, we would be required to purchase such interest at a redemption value based on a formula that management intended to reasonably approximate fair value based on a fixed multiple of earnings over a measurement period. As such, the carrying value of the redeemable noncontrolling interest is compared to the redemption value at each reporting period. Any adjustments to the carrying amount of the redeemable noncontrolling interest for changes in redemption value prior to exercise of the redemption option are determined after the attribution of net income or loss of the subsidiary and are recorded in retained earnings.

Following is a reconciliation of the changes in the redeemable noncontrolling interest for the nine months ended September 30, 2012 (in millions):

Balance at January 1, 2012	$	22.2
Net income attributable to redeemable noncontrolling interest	1.6
Redeemable noncontrolling interest assumed related to acquisition	37.6
Distributions to redeemable noncontrolling interest	(1.3		)
Foreign currency translation adjustment	0.9
Balance at September 30, 2012	$	61.0