Cigna 2015 Annual Report Download - page 131
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PART II
ITEM 8. Financial Statements and Supplementary Data
Income Taxes
A. Income Tax Expense
The components of income taxes for the years ended December 31 were as follows:
(In millions)
2015 2014 2013
Current taxes
U.S. income taxes $ 1,076 $ 1,068 $ 382
Foreign income taxes 93 115 77
State income taxes 60 49 42
1,229 1,232 501
Deferred taxes (benefits)
U.S. income taxes 22 10 152
Foreign income taxes (benefits) (6) (22) 46
State income taxes (benefits) 5 (10) (1)
21 (22) 197
Total income taxes $ 1,250 $ 1,210 $ 698
Total income taxes for the years ended December 31 were different from the amount computed using the nominal federal income tax rate of 35%
for the following reasons:
(In millions)
2015 2014 2013
Tax expense at nominal rate $ 1,164 $ 1,156 $ 761
Effect of undistributed foreign earnings (67) (74) (42)
Health insurance industry tax 109 83 –
State income tax (net of federal income tax benefit) 42 25 27
Other 2 20 (48)
Total income taxes $ 1,250 $ 1,210 $ 698
Consolidated pre-tax income from the Company’s foreign operations was approximately 11% of the Company’s pre-tax income in 2015, 10% in
2014 and 12% in 2013.
tax rate. The Company has accumulated undistributed foreign
Effective Tax Rates
earnings of $2.2 billion as of December 31, 2015. If the Company
The consolidated effective tax rates of 37.6% in 2015 and 36.6% in intended to repatriate these foreign earnings to the U.S., the
2014 have increased from historical levels due to the health insurance Company’s consolidated balance sheet would have included an
industry tax that took effect in 2014 and that is not deductible for additional $290 million of deferred tax liabilities as of
federal income tax purposes. Other matters having a significant December 31, 2015.
impact on the effective tax rate included: •Completion of IRS examinations/other 2013 impacts. In 2013,
•Undistributed foreign earnings. As part of its global capital the Internal Revenue Service (‘‘IRS’’) completed its examination of
management strategy, the Company’s foreign operations retain a the Company’s 2009 and 2010 tax years, resulting in an increase to
significant portion of their earnings overseas. These undistributed shareholders’ net income of $18 million. In addition, income tax
earnings are deployed outside of the U.S. in support of the liquidity expense was reduced in 2013 due to certain other tax benefits
and capital needs of our foreign operations. The Company does not related to the Company’s foreign operations.
intend to repatriate these earnings to the U.S. and as a result,
income taxes are provided using the respective foreign jurisdictions’
CIGNA CORPORATION - 2015 Form 10-K 101
NOTE 19