Investment in Unconsolidated Affiliate

9 Months Ended

Sep. 30, 2016

Equity Method Investments and Joint Ventures [Abstract]

Investment in Unconsolidated Affiliate

Investment in Unconsolidated Affiliate

The Company owns a 49% interest in StoneRiver Group, L.P. (“StoneRiver”), which is accounted for as an equity method investment, and reports its share of StoneRiver’s net income as income from investment in unconsolidated affiliate. During the first quarter of 2016, StoneRiver recognized a gain on the sale of a business interest in which the Company’s pre-tax share of this gain was $190 million. During the first quarter of 2016, the Company also received cash dividends of $140 million from StoneRiver, which were funded from the sale transaction and recorded as reductions in the Company’s investment in StoneRiver. In conjunction with this activity, the Company evaluated its equity method investment in StoneRiver for its ability to recover the remaining carrying amount of such investment. Utilizing a discounted cash flow analysis (level 3 of the fair value hierarchy) to arrive at a measure of the investment’s fair value, the Company recognized an impairment loss of $44 million. The Company's $146 million pre-tax share of the gain, net of the impairment loss was recorded within income from investment in unconsolidated affiliate, with the related tax expense of $54 million recorded through the income tax provision, in the consolidated statements of income.

During the three months ended September 30, 2015, StoneRiver recognized a gain on the sale of a subsidiary business. The Company's $32 million pre-tax share of the gain and related expenses was recorded within income from investment in unconsolidated affiliate, with the related tax expense of $14 million recorded through the income tax provision, in the consolidated statements of income. During the three months ended September 30, 2015, the Company received cash dividends of $36 million from StoneRiver, which were funded from the sale transaction and recorded as reductions in the Company's investment in StoneRiver.

The Company’s investment in StoneRiver was $22 million and $17 million at September 30, 2016 and December 31, 2015, respectively, and is reported within other long-term assets in the consolidated balance sheets. The dividends, in their entirety, represented returns on the Company's investment and are reported in cash flows from operating activities.