v2.4.0.6
Income Taxes
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12 Months Ended |
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Income Tax [Abstract] |
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Income Tax Disclosure [Text Block] |
Income Taxes The components of the provision for income taxes for the years ended December 31 are as follows: | | | | | | | | | | | | | | (in millions) | | 2012 | | 2011 | | 2010 | Current Provision: | | | | | | | Federal | | $ | 2,638 |
| | $ | 2,608 |
| | $ | 2,524 |
| State and local | | 150 |
| | 150 |
| | 180 |
| Total current provision | | 2,788 |
| | 2,758 |
| | 2,704 |
| Deferred provision | | 308 |
| | 59 |
| | 45 |
| Total provision for income taxes | | $ | 3,096 |
| | $ | 2,817 |
| | $ | 2,749 |
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The reconciliation of the tax provision at the U.S. Federal Statutory Rate to the provision for income taxes for the years ended December 31 is as follows: | | | | | | | | | | | | | | | | | | | | | | | (in millions, except percentages) | | 2012 | | 2011 | | 2010 | Tax provision at the U.S. federal statutory rate | | $ | 3,018 |
| | 35.0 | % | | $ | 2,785 |
| | 35.0 | % | | $ | 2,584 |
| | 35.0 | % | State income taxes, net of federal benefit | | 143 |
| | 1.7 |
| | 136 |
| | 1.7 |
| | 129 |
| | 1.7 |
| Settlement of state exams, net of federal benefit | | 2 |
| | — |
| | (29 | ) | | (0.4 | ) | | (3 | ) | | — |
| Tax-exempt investment income | | (59 | ) | | (0.7 | ) | | (63 | ) | | (0.8 | ) | | (65 | ) | | (0.9 | ) | Non-deductible compensation | | 22 |
| | 0.2 |
| | 10 |
| | 0.1 |
| | 64 |
| | 0.9 |
| Other, net | | (30 | ) | | (0.3 | ) | | (22 | ) | | (0.2 | ) | | 40 |
| | 0.5 |
| Provision for income taxes | | $ | 3,096 |
| | 35.9 | % | | $ | 2,817 |
| | 35.4 | % | | $ | 2,749 |
| | 37.2 | % |
The higher effective income tax rate for 2012 as compared to 2011 resulted from the favorable resolution of various tax matters in 2011. The 2010 effective income tax rates were at higher levels due to the cumulative implementation of changes under the Health Reform Legislation.
The components of deferred income tax assets and liabilities as of December 31 are as follows: | | | | | | | | | | (in millions) | | 2012 | | 2011 | Deferred income tax assets: | | | | | Accrued expenses and allowances | | $ | 306 |
| | $ | 259 |
| U.S. Federal and State net operating loss carryforwards | | 276 |
| | 247 |
| Share-based compensation | | 238 |
| | 417 |
| Long term liabilities | | 160 |
| | 155 |
| Medical costs payable and other policy liabilities | | 149 |
| | 166 |
| Non-U.S. tax loss carryforwards | | 126 |
| | — |
| Unearned revenues | | 64 |
| | 56 |
| Unrecognized tax benefits | | 25 |
| | 44 |
| Domestic other | | 93 |
| | 192 |
| Foreign other | | 142 |
| | — |
| Subtotal | | 1,579 |
| | 1,536 |
| Less: valuation allowances | | (271 | ) | | (184 | ) | Total deferred income tax assets | | 1,308 |
| | 1,352 |
| Deferred income tax liabilities: | | | | | U.S. Federal and State intangible assets | | (1,335 | ) | | (1,148 | ) | Non-U.S. goodwill and intangible assets | | (640 | ) | | — |
| Capitalized software development | | (482 | ) | | (465 | ) | Net unrealized gains on investments | | (296 | ) | | (275 | ) | Depreciation and amortization | | (249 | ) | | (256 | ) | Prepaid expenses | | (113 | ) | | (86 | ) | Foreign other | | (179 | ) | | — |
| Total deferred income tax liabilities | | (3,294 | ) | | (2,230 | ) | Net deferred income tax liabilities | | $ | (1,986 | ) | | $ | (878 | ) |
Valuation allowances are provided when it is considered more likely than not that deferred tax assets will not be realized. The valuation allowances primarily relate to future tax benefits on certain federal, state and non-U.S. net operating loss carryforwards. Federal net operating loss carryforwards of $105 million expire beginning in 2019 through 2032, state net operating loss carryforwards expire beginning in 2013 through 2032. Substantially all of the non-U.S. tax loss carryforwards have indefinite carryforward periods. As of December 31, 2012 the Company had $94 million of undistributed earnings from non-U.S. subsidiaries that are intended to be reinvested in non-U.S. operations. Because these earnings are considered permanently reinvested, no U.S. tax provision has been accrued related to the repatriation of these earnings. It is not practicable to estimate the amount of U.S. tax that might be payable on the eventual remittance of such earnings. A reconciliation of the beginning and ending amount of unrecognized tax benefits as of December 31 is as follows: | | | | | | | | | | | | | | (in millions) | | 2012 | | 2011 | | 2010 | Gross unrecognized tax benefits, beginning of period | | $ | 129 |
| | $ | 220 |
| | $ | 220 |
| Gross increases: | | |
| | |
| | | Current year tax positions | | 6 |
| | 11 |
| | 13 |
| Prior year tax positions | | 18 |
| | 10 |
| | 30 |
| Gross decreases: | | |
| | |
| | | Prior year tax positions | | (48 | ) | | (34 | ) | | — |
| Settlements | | (10 | ) | | (25 | ) | | — |
| Statute of limitations lapses | | (14 | ) | | (53 | ) | | (43 | ) | Gross unrecognized tax benefits, end of period | | $ | 81 |
| | $ | 129 |
| | $ | 220 |
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The Company classifies interest and penalties associated with uncertain income tax positions as income taxes within its Consolidated Financial Statements. The Company recognized tax benefits from the net reduction of interest and penalties accrued of $20 million and $12 million during the years ended December 31, 2012 and 2011, respectively. During the year ended December 31, 2010, the Company recognized $15 million of interest expense and penalties. The Company had $23 million and $41 million of accrued interest and penalties for uncertain tax positions as of December 31, 2012 and 2011, respectively. These amounts are not included in the reconciliation above. As of December 31, 2012, the total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate, was $77 million. The Company currently files income tax returns in the U.S., various states and foreign jurisdictions. The U.S. Internal Revenue Service (IRS) has completed exams on the consolidated income tax returns for fiscal years 2011 and prior. The Company’s 2012 tax year is under advance review by the IRS under its Compliance Assurance Program. With the exception of a few states, the Company is no longer subject to income tax examinations prior to 2007. The Brazilian federal revenue service - Secretaria da Receita Federal (SRF) may audit the Company’s Brazilian subsidiaries for a period of five years from the date on which corporate income taxes should have been paid and/or the date when the tax return was filed. Estimated taxes are paid monthly or quarterly with an annual return due on June 30 following the end of the taxable year. The Company believes it is reasonably possible that its liability for unrecognized tax benefits will decrease in the next twelve months by $37 million as a result of audit settlements and the expiration of statutes of limitations in certain major jurisdictions. |
X |
- Definition
The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.
+ References
Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 136, 172
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.
Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 235
-SubTopic 10
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(h))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690
Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
-Section 08
-Paragraph h
-Article 4
Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 15
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32718-109319
Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Statement of Financial Accounting Standard (FAS)
-Number 109
-Paragraph 43, 44, 45, 46, 47, 48, 49
-LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy.
Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32537-109319
Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 9
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32639-109319
Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 3
-URI http://asc.fasb.org/extlink&oid=6907707&loc=d3e32559-109319
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