United Healthcare 2007 Annual Report Download - page 77

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Long-Term Investments with an equal amount in Long-Term Other Liabilities in the Consolidated Balance
Sheets. The total deferrals are distributable based upon termination of employment or other periods, as elected
under each plan and are $225 million and $212 million as of December 31, 2007 and 2006, respectively.
11. Income Taxes
The components of the provision for income taxes for the years ended December 31 are as follows:
(in millions) 2007 2006 2005
Current Provision
Federal ........................................... $ 2,284 $ 2,236 $ 1,594
State and Local ..................................... 166 158 125
Total Current Provision .......................... 2,450 2,394 1,719
Deferred Provision ...................................... 201 (25) 37
Total Provision for Income Taxes .................. $ 2,651 $ 2,369 $ 1,756
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) 2007 2006 2005
Tax Provision at the U.S. Federal Statutory Rate .............. $ 2,557 $ 2,285 $ 1,693
State Income Taxes, net of federal benefit .................... 120 116 87
Tax-Exempt Investment Income ........................... (52) (50) (40)
Other, net ............................................. 26 18 16
Provision for Income Taxes ........................... $ 2,651 $ 2,369 $ 1,756
As of December 31, 2007 and 2006, the components of deferred income tax assets and liabilities are as follows:
(in millions) 2007 2006
Deferred Income Tax Assets
Accrued Expenses and Allowances ................................. $ 83 $ 221
Unearned Premiums ............................................. 54 43
Medical Costs Payable and Other Policy Liabilities .................... 168 181
Long Term Liabilities ........................................... 132 142
Net Operating Loss Carryforwards ................................. 110 91
Share-Based Compensation ....................................... 346 329
Unrecognized Tax Benefits ....................................... 105 —
Other ........................................................ 116 139
Subtotal .......................................................... $ 1,114 $ 1,146
Less: Valuation Allowances ...................................... (73) (53)
Total Deferred Income Tax Assets ..................................... $ 1,041 $ 1,093
Deferred Income Tax Liabilities
Capitalized Software Development ................................. (391) (420)
Net Unrealized Gains on Investments ............................... (55) (8)
Intangible Assets ............................................... (707) (766)
Property and Equipment ......................................... (2) 64
Total Deferred Income Tax Liabilities .................................. $ (1,155) $ (1,130)
Net Deferred Income Tax Liabilities ............................ $ (114) $ (37)
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