United Healthcare 2012 Annual Report Download - page 97

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.
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