8. Stockholders’ Equity

Reconciliation of Outstanding Shares

	Series A	Series B	Common
	preferred stock	preferred stock	stock
	(in millions)

Outstanding shares at January 1, 2013	3.0	10.0	293.8
Shares issued	—	—	4.5
Treasury stock acquired	—	—	(4.4	)
Outstanding shares at September 30, 2013	3.0	10.0	293.9

Outstanding shares at January 1, 2014	3.0	10.0	295.2
Shares issued	—	—	3.1
Treasury stock acquired	—	—	(4.7	)
Outstanding shares at September 30, 2014	3.0	10.0	293.6

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.

In May 2012, 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 February 2013. In February 2013, our Board of Directors authorized a share repurchase program of up to $150.0 million of our outstanding common stock, which was completed in March 2014. In February 2014, our Board of Directors authorized a share repurchase program of up to $200.0 million of our outstanding common stock.

Other Comprehensive Income (Loss)

For the three months ended

For the nine months ended

September 30, 2014

Pre-Tax

Tax

After-Tax

Pre-Tax

Tax

After-Tax

(in millions)

Net unrealized gains (losses) on available-for-sale securities during the period

(301.8

)

103.8

(198.0

)

1,009.9

(340.7

)

669.2

Reclassification adjustment for (gains) losses included in net income (1)

4.3

(1.4

)

2.9

(57.4

)

18.8

(38.6

)

Adjustments for assumed changes in amortization patterns

28.2

(9.8

)

18.4

(71.0

)

24.9

(46.1

)

Adjustments for assumed changes in policyholder liabilities

149.8

(47.0

)

102.8

(434.7

)

146.8

(287.9

)

Net unrealized gains (losses) on available-for-sale securities

(119.5

)

45.6

(73.9

)

446.8

(150.2

)

296.6

Noncredit component of impairment losses on fixed maturities, available-for-sale during the period

14.7

(5.0

)

9.7

82.6

(29.3

)

53.3

Adjustments for assumed changes in amortization patterns

3.1

(1.2

)

1.9

(5.3

)

1.9

(3.4

)

Adjustments for assumed changes in policyholder liabilities

(0.9

)

0.3

(0.6

)

(1.5

)

0.5

(1.0

)

Noncredit component of impairment losses on fixed maturities, available-for-sale (2)

16.9

(5.9

)

11.0

75.8

(26.9

)

48.9

Net unrealized gains on derivative instruments during the period

48.4

(17.0

)

31.4

67.7

(23.8

)

43.9

Reclassification adjustment for (gains) losses included in net income (3)

(1.8

)

0.6

(1.2

)

6.3

(2.4

)

3.9

Adjustments for assumed changes in amortization patterns

(8.4

)

2.9

(5.5

)

(8.9

)

3.1

(5.8

)

Adjustments for assumed changes in policyholder liabilities

6.9

(2.4

)

4.5

0.4

(0.1

)

0.3

Net unrealized gains on derivative instruments

45.1

(15.9

)

29.2

65.5

(23.2

)

42.3

Foreign currency translation adjustment

(210.3

)

14.5

(195.8

)

(231.2

)

22.8

(208.4

)

Amortization of prior service cost and actuarial loss included in net periodic benefit cost (4)

5.5

(1.9

)

3.6

16.5

(5.8

)

10.7

Net unrecognized postretirement benefit obligation

5.5

(1.9

)

3.6

16.5

(5.8

)

10.7

Other comprehensive income (loss)

(262.3

)

36.4

(225.9

)

373.4

(183.3

)

190.1

	For the three months ended									For the nine months ended
	September 30, 2013									September 30, 2013
	Pre-Tax			Tax			After-Tax			Pre-Tax			Tax			After-Tax
	(in millions)
Net unrealized losses on available-for-sale securities during the period	$	(40.9	)	$	9.1		$	(31.8	)	$	(1,578.4	)	$	511.6		$	(1,066.8	)
Reclassification adjustment for losses included in net income (1)	8.4			(2.9		)	5.5			66.8			(22.7		)	44.1
Adjustments for assumed changes in amortization patterns	29.3			(10.3		)	19.0			241.1			(84.4		)	156.7
Adjustments for assumed changes in policyholder liabilities	54.1			(17.5		)	36.6			505.7			(163.4		)	342.3
Net unrealized gains (losses) on available-for-sale securities	50.9			(21.6		)	29.3			(764.8		)	241.1			(523.7		)

Noncredit component of impairment losses on fixed maturities, available-for-sale during the period	9.3			(2.9		)	6.4			(8.8		)	3.9			(4.9		)
Adjustments for assumed changes in amortization patterns	(13.7		)	4.9			(8.8		)	(13.6		)	4.9			(8.7		)
Adjustments for assumed changes in policyholder liabilities	(0.2		)	0.1			(0.1		)	0.8			(0.3		)	0.5
Noncredit component of impairment losses on fixed maturities, available-for-sale (2)	(4.6		)	2.1			(2.5		)	(21.6		)	8.5			(13.1		)

Net unrealized losses on derivative instruments during the period	(45.7		)	15.9			(29.8		)	(31.7		)	11.7			(20.0		)
Reclassification adjustment for losses included in net income (3)	1.9			(0.8		)	1.1			1.6			(0.8		)	0.8
Adjustments for assumed changes in amortization patterns	2.6			(1.0		)	1.6			9.0			(3.2		)	5.8
Adjustments for assumed changes in policyholder liabilities	2.7			(0.7		)	2.0			15.3			(5.3		)	10.0
Net unrealized losses on derivative instruments	(38.5		)	13.4			(25.1		)	(5.8		)	2.4			(3.4		)

Foreign currency translation adjustment	(32.0		)	(1.5		)	(33.5		)	(177.3		)	7.8			(169.5		)

Amortization of prior service cost and actuarial loss included in net periodic benefit cost (4)	21.2			(7.4		)	13.8			63.7			(22.3		)	41.4
Net unrecognized postretirement benefit obligation	21.2			(7.4		)	13.8			63.7			(22.3		)	41.4

Other comprehensive loss	$	(3.0	)	$	(15.0	)	$	(18.0	)	$	(905.8	)	$	237.5		$	(668.3	)

(1) Pre-tax reclassification adjustments relating to available-for-sale securities are reported in net realized capital gains (losses) on the consolidated statements of operations.

(2) 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.

(3) See Note 4, Derivative Financial Instruments — Cash Flow Hedges, for further details.

(4) Pre-tax amortization of prior service cost and actuarial loss included in net periodic benefit cost, which is comprised of amortization of prior service cost (benefit) and recognized net actuarial (gain) loss, is reported in operating expenses on the consolidated statements of operations. See Note 6, Employee and Agent Benefits — Components of Net Periodic Benefit Cost, for further details.

Accumulated Other Comprehensive Income (Loss)

				Noncredit
	Net unrealized			component of			Net unrealized			Foreign			Unrecognized			Accumulated
	gains on			impairment losses			gains (losses) on			currency			postretirement			other
	available-for-sale			on fixed maturities			derivative			translation			benefit			comprehensive
	securities			available-for-sale			instruments			adjustment			obligation			income (loss)
	(in millions)

Balances at January 1, 2013	$	1,418.3		$	(173.9	)	$	(8.7	)	$	(106.9	)	$	(488.5	)	$	640.3
Other comprehensive loss during the period, net of adjustments	(567.8		)	(13.1		)	(4.2		)	(159.2		)	—			(744.3		)
Amounts reclassified from AOCI	44.1			—			0.8			—			41.4			86.3
Other comprehensive loss	(523.7		)	(13.1		)	(3.4		)	(159.2		)	41.4			(658.0		)
Balances at September 30, 2013	$	894.6		$	(187.0	)	$	(12.1	)	$	(266.1	)	$	(447.1	)	$	(17.7	)

Balances at January 1, 2014	$	878.1		$	(167.0	)	$	(10.5	)	$	(361.5	)	$	(155.9	)	$	183.2
Other comprehensive income during the period, net of adjustments	335.2			—			38.4			(201.6		)	—			172.0
Amounts reclassified from AOCI	(38.6		)	48.9			3.9			—			10.7			24.9
Other comprehensive income	296.6			48.9			42.3			(201.6		)	10.7			196.9
Balances at September 30, 2014	$	1,174.7		$	(118.1	)	$	31.8		$	(563.1	)	$	(145.2	)	$	380.1

Noncontrolling Interest

Interests 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. 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 fair value or 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 recognized in the redemption value as they occur. Adjustments to the carrying value of redeemable noncontrolling interest result in adjustments to additional paid-in capital and/or retained earnings. Adjustments are recorded in retained earnings to the extent the redemption value of the redeemable noncontrolling interest exceeds its fair value and will impact the numerator in our earnings per share calculations. All other adjustments to the redeemable noncontrolling interest are recorded in additional paid-in capital.

Following is a reconciliation of the changes in the redeemable noncontrolling interest (in millions):

Balance at January 1, 2013	$	60.4
Net income attributable to redeemable noncontrolling interest	9.0
Reclassification from stockholders’ equity (1)	173.9
Redeemable noncontrolling interest assumed related to acquisition	1.2
Distributions to redeemable noncontrolling interest	(9.9		)
Purchase of subsidiary shares from redeemable noncontrolling interest	(2.4		)
Change in redemption value of redeemable noncontrolling interest	5.6
Foreign currency translation adjustment	(3.3		)
Balance at September 30, 2013	$	234.5

Balance at January 1, 2014	$	247.2
Net income attributable to redeemable noncontrolling interest	8.3
Contributions from redeemable noncontrolling interest	0.1
Distributions to redeemable noncontrolling interest	(14.4		)
Purchase of subsidiary shares from redeemable noncontrolling interest (2)	(216.8		)
Change in redemption value of redeemable noncontrolling interest	33.2
Foreign currency translation adjustment	(1.5		)
Balance at September 30, 2014	$	56.1

(1) During the third quarter of 2013, we identified a classification error of certain of our noncontrolling interests. The classification error had no impact on net income, but did impact earnings per share to the extent the redemption value of the redeemable noncontrolling interest exceeds the fair value. We evaluated the classification error and related earnings per share impact based on qualitative and quantitative factors in accordance with SEC Staff Accounting Bulletins 99 and 108 and concluded the impact was not material in the current or any prior quarterly or annual periods presented. During the third quarter of 2013, we recorded a $173.9 million increase to redeemable noncontrolling interest and a corresponding decrease to stockholders’ equity. See related discussion in Note 12, Earnings Per Share.

(2) The decrease during the third quarter of 2014 was primarily due to an increased ownership stake in Columbus Circle Investors.