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UNUM • 2014 ANNUAL REPORT 131
Note 7. Income Tax
Total income tax expense (benefit) is allocated as follows:
Year Ended December 31
(in millions of dollars) 2014 2013 2012
Net Income $ 113.8 $ 347.1 $ 355.1
Stockholders’ Equity — Additional Paid-in Capital
Stock-Based Compensation (3.0) (0.8) 3.5
Stockholders’ Equity — Accumulated Other Comprehensive Income (Loss)
Change in Net Unrealized Gain on Securities Before Adjustment 725.8 (1,102.8) 467.7
Change in Adjustment to Deferred Acquisition Costs and Reserves
for Future Policy and Contract Benefits, Net of Reinsurance (665.1) 743.3 (325.6)
Change in Net Gain on Cash Flow Hedges (2.0) (1.3) (4.3)
Change in Unrecognized Pension and Postretirement Benefit Costs (92.4) 185.2 (68.0)
Total $ 77.1 $ 170.7 $ 428.4
A reconciliation of the income tax expense (benefit) attributable to income from operations before income tax, computed at
U.S. federal statutory tax rates, to the income tax expense (benefit) as included in our consolidated statements of income, is as follows.
Certain prior year amounts have been reclassified to conform to current year reporting.
Year Ended December 31
2014 2013 2012
Statutory Income Tax 35.0% 35.0% 35.0%
Foreign Items (4.3) (1.8) (1.9)
Tax Credits (8.1) (3.4) (2.7)
Tax-exempt Investment Income (2.3) (1.0) (0.9)
Other Items, Net 1.3 — (1.1)
Effective Tax 21.6% 28.8% 28.4%
Our net deferred tax liability consists of the following:
December 31
(in millions of dollars) 2014 2013
Deferred Tax Liability
Deferred Acquisition Costs $ 97.4 $ 70.0
Fixed Assets 93.0 80.3
Invested Assets 1,999.2 1,274.3
Other 64.6 54.4
Gross Deferred Tax Liability 2,254.2 1,479.0
Deferred Tax Asset
Reserves 1,919.2 1,180.1
Employee Benefits 254.0 151.2
Other 2.6 3.4
Gross Deferred Tax Asset 2,175.8 1,334.7
Total Net Deferred Tax Liability $ 78.4 $ 144.3