Aetna 2013 Annual Report Download - page 132

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Annual Report- Page 126
Valuation allowances are provided when we estimate that it is more likely than not that deferred tax assets will not
be realized. A valuation allowance has been established on certain federal and state net operating losses. We base
our estimates of the future realization of deferred tax assets primarily on historic taxable income and existing
deferred tax liabilities.
We participate in the Compliance Assurance Process (the “CAP”) with the Internal Revenue Service (the “IRS”).
Under the CAP, the IRS undertakes audit procedures during the tax year and as the return is prepared for filing.
The IRS has concluded its CAP audit of our 2012 tax return as well as all the prior years. We expect the IRS will
conclude its CAP audit of our 2013 tax return in 2014.
We are also subject to audits by state taxing authorities for tax years from 2000 through 2012. We believe we carry
appropriate reserves for any exposure to state tax issues.
At both December 31, 2013 and December 31, 2012 we did not have material uncertain tax positions reflected in
our consolidated balance sheets.
We paid net income taxes of $891 million, $741 million and $899 million in 2013, 2012 and 2011, respectively.
14. Debt
The carrying value of our long-term debt at December 31, 2013 and 2012 was as follows:
(Millions) 2013 2012
Senior notes, 6.3%, due 2014 $ 387.3 $ —
Senior notes, 6.125%, due 2015 240.6 —
Senior notes, 6.0%, due 2016 748.9 748.5
Senior notes, 5.95%, due 2017 434.2 —
Senior notes, 1.75%, due 2017 248.9 248.6
Senior notes, 1.5%, due 2017 498.2 497.7
Senior notes, 6.5%, due 2018 494.9 494.8
Senior notes, 3.95%, due 2020 744.3 743.4
Senior notes, 5.45%, due 2021 702.3 —
Senior notes, 4.125%, due 2021 494.8 494.1
Senior notes, 2.75%, due 2022 985.1 983.4
Senior notes, 6.625%, due 2036 769.8 769.7
Senior notes, 6.75%, due 2037 530.6 529.5
Senior notes, 4.5%, due 2042 480.1 479.3
Senior notes, 4.125%, due 2042 492.6 492.3
Total long-term debt 8,252.6 6,481.3
Less current portion of long-term debt (1) 387.3 —
Total long-term debt, less current portion $ 7,865.3 $ 6,481.3
(1) At December 31, 2013, our 6.3% senior notes due August 2014 are classified as current in the accompanying consolidated balance sheet.
As discussed in Note 3 beginning on page 91, our total long-term debt outstanding increased by $1.8 billion as a
result of the acquisition of Coventry, which includes $216.6 million to adjust the Coventry long-term debt to its
estimated fair value at the Effective Date. The principal amounts of the outstanding Coventry notes are $375
million of 6.3% senior notes due 2014, $229 million of 6.125% senior notes due 2015, $383 million of 5.95%
senior notes due 2017 and $600 million of 5.45% senior notes due 2021.
In 2012, we repurchased approximately $200 million of par value of our outstanding senior notes, including
repurchases of our 6.75% senior notes due 2037, 6.625% senior notes due 2036 and 6.5% senior notes due 2018,
and recorded a loss on the early extinguishment of this long-term debt of $55.2 million ($84.9 million pretax).