Investment in Unconsolidated Affiliate

12 Months Ended

Dec. 31, 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. The Company’s investment in StoneRiver was $14 million and $17 million at December 31, 2016 and 2015, respectively, and is reported within other long-term assets in the consolidated balance sheets. To the extent that the Company's cost basis is different than the basis reflected at the unconsolidated affiliate level, the basis difference is generally amortized over the lives of the related assets and included in the Company's share of equity in earnings of the unconsolidated affiliate. In 2016, 2015 and 2014, the Company received cash dividends, funded from capital transactions, from StoneRiver of $151 million, $36 million and $110 million, respectively, which were recorded as reductions in the Company’s investment in StoneRiver. The dividends, in their entirety, represented returns on the Company's investment and are reported in cash flows from operating activities.

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 2015 and 2014, StoneRiver recognized net gains on the sales of subsidiary businesses. The Company’s pre-tax share of the net gains and related expenses on these transactions of $29 million in 2015 and $87 million in 2014 was recorded within income from investment in unconsolidated affiliate, with the related tax expenses of $13 million and $36 million, respectively, recorded through the income tax provision, in the accompanying consolidated statements of income.