Dispositions

9 Months Ended

Sep. 30, 2011

Discontinued Operations and Disposal Groups [Abstract]

Dispositions

Dispositions

In the first quarter of 2010, Kroll completed the sale of KLS and on August 3, 2010, the Company completed the sale of Kroll to Altegrity.

Kroll’s results of operations are reported as discontinued operations in the Company’s consolidated statements of income. The nine months ended September 30, 2010 also includes the gain on the sale of Kroll and related tax benefits and the loss on the sale of KLS, which includes the tax provision of $36 million on the sale. Discontinued operations for the nine months ended September 30, 2011 primarily relates to an insurance recovery for legal fees incurred at Putnam prior to its sale and a tax recovery under the indemnity related to the Putnam sale.

The Company’s tax basis in its investment in the stock of Kroll at the time of sale exceeded the recorded amount primarily as a result of prior impairments of goodwill recognized for financial reporting, but not tax. Prior to the second quarter of 2010, a tax benefit was not recorded for this temporary difference because it was not apparent in the foreseeable future that it would reverse in a transaction that would result in a tax benefit. Since Kroll met the criteria for classification as a discontinued operation in the second quarter of 2010, the Company determined that it had the ability to carry back the capital loss realized against prior realized capital gains. Therefore, a $265 million deferred tax benefit was recorded in discontinued operations in the second quarter of 2010 to establish a deferred tax asset.

Summarized Statements of Income data for discontinued operations is as follows:

	Three Months Ended September 30,					Nine Months Ended September 30,
(In millions of dollars except per share figures)	2011		2010			2011			2010
Kroll Operations
Revenue	$	—	$	56		$	—		$	381
Expense	—		52			—			345
Net operating income	—		4			—			36
Income tax	—		1			—			16
Income from Kroll operations, net of tax	—		3			—			20
Other discontinued operations, net of tax	—		(7		)	—			(7		)
Income (loss) from discontinued operations, net of tax	—		(4		)	—			13
Disposals of discontinued operations	3		35			11			42
Income tax (credit) expense	1		(12		)	(6		)	(237		)
Disposals of discontinued operations, net of tax	2		47			17			279
Discontinued operations, net of tax	$	2	$	43		$	17		$	292
Discontinued operations, net of tax per share
– Basic	$	—	$	0.07		$	0.03		$	0.53
– Diluted	$	0.01	$	0.08		$	0.03		$	0.53