Investment in Unconsolidated Affiliate

12 Months Ended

Dec. 31, 2014

Investment in Unconsolidated Affiliate

4. 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 $21 million and $39 million at December 31, 2014 and 2013, respectively, and was 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 2014, 2013 and 2012, the Company received cash dividends, funded from capital transactions, from StoneRiver of $110 million, $122 million and $55 million, respectively, which were recorded as reductions in the Company’s investment in StoneRiver. The portions of these dividends that represented returns on the Company’s investment were $110 million in 2014, $6 million in 2013 and $23 million in 2012 and are reported in cash flows from operating activities.

During 2014, StoneRiver recognized net gains on the sales of subsidiary businesses, and in 2013, completed a transaction which reduced its ownership interest in another subsidiary business, resulting in a gain associated with the deconsolidation. The Company’s share of the net gains and related expenses on these transactions of $87 million in 2014 and $71 million in 2013 was recorded within income from investment in unconsolidated affiliate, with the related tax expenses of $36 million and $17 million, respectively, recorded through the income tax provision, in the accompanying consolidated statements of income.

Due to the significant income attributable to the 2013 gain on deconsolidation, summarized StoneRiver financial information is presented below and reflects certain of the 2014 dispositions as discontinued operations within the statements of income for all periods presented.

(In millions)	2014			2013		2012
Statements of income for the years ended December 31,
Total revenue	$	140		$	606	$	722
Operating (loss) income		(3	)		8		39
Income from continuing operations		5			242		17
Net income		138			243		16
Balance sheet as of December 31,
Current assets	$	82		$	74
Noncurrent assets		198			629
Current liabilities		47			97
Noncurrent liabilities		254			527