Health Net 2010 Annual Report Download - page 134

HEALTH NET, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
We expect to contribute $1.1 million to our pension plan and $0.7 million to our postretirement health and
life plans throughout 2011. The entire amount expected to be contributed, in the form of cash, to the defined
benefit pension and postretirement health and life plans during 2011 is expected to be paid out as benefits during
the same year.
Note 11—Income Taxes
Significant components of the provision for income taxes are as follows for the years ended December 31:
2010 2009 2008
(Dollars in millions)
Current tax expense:
Federal ............................................................ $ 76.3 $25.2 $37.2
State .............................................................. 12.5 2.5 (0.1)
Total current tax expense .................................................. 88.8 27.7 37.1
Deferred tax expense (benefit):
Federal ............................................................ 27.1 (4.4) 4.4
State .............................................................. 10.1 2.5 11.0
Total deferred tax expense (benefit) ......................................... 37.2 (1.9) 15.4
Interest expense, gross of related tax effects ................................... 0.6 (2.0) (0.4)
Total income tax provision ................................................. $126.6 $23.8 $52.1
A reconciliation of the statutory federal income tax rate and the effective income tax rate on income is as
follows for the years ended December 31:
2010 2009 2008
Statutory federal income tax rate ............................................ 35.0% (35.0)% 35.0%
State and local taxes, net of federal income tax effect ............................ 4.5 14.0 4.8
Tax exempt interest income ................................................ (1.0) (18.8) (4.1)
Goodwill impairment ..................................................... 0.6 194.2 0
Fines and penalties ....................................................... 0.3 3.6 1.1
Class action lawsuit expenses .............................................. 0 0 (3.0)
Valuation allowance (release) against capital loss, net operating losses and tax
credits ............................................................... (2.1) 8.3 0
Sale of subsidiaries ....................................................... (1.0) (67.9) 0
Interest ................................................................ 0 (6.8) 0
Other, net .............................................................. 2.0 2.6 1.6
Effective income tax rate .................................................. 38.3% 94.2% 35.4%
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