United Healthcare 2013 Annual Report Download - page 93

Deferred income tax assets and liabilities are recognized for the differences between the financial and income tax
reporting bases of assets and liabilities based on enacted tax rates and laws. The components of deferred income
tax assets and liabilities as of December 31 are as follows:
(in millions) 2013 2012
Deferred income tax assets:
Accrued expenses and allowances ........................................... $ 284 $ 306
U.S. federal and state net operating loss carryforwards ........................... 257 276
Share-based compensation ................................................. 200 238
Long-term liabilities ...................................................... 170 160
Medical costs payable and other policy liabilities ............................... 155 149
Non-U.S. tax loss carryforwards ............................................ 110 126
Unearned revenues ....................................................... 65 64
Unrecognized tax benefits ................................................. 38 25
Other-domestic .......................................................... 57 93
Other-non-U.S. .......................................................... 89 142
Subtotal .................................................................... 1,425 1,579
Less: valuation allowances ..................................................... (207) (271)
Total deferred income tax assets ................................................ 1,218 1,308
Deferred income tax liabilities:
U.S. federal and state intangible assets ....................................... (1,207) (1,335)
Non-U.S. goodwill and intangible assets ...................................... (453) (640)
Capitalized software ...................................................... (481) (482)
Net unrealized gains on investments ......................................... (31) (296)
Depreciation and amortization .............................................. (268) (249)
Prepaid expenses ......................................................... (137) (113)
Other-non-U.S. .......................................................... (7) (179)
Total deferred income tax liabilities .............................................. (2,584) (3,294)
Net deferred income tax liabilities ............................................... $(1,366) $(1,986)
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 $111 million expire beginning in 2021
through 2033, state net operating loss carryforwards expire beginning in 2014 through 2033. Substantially all of
the non-U.S. tax loss carryforwards have indefinite carryforward periods.
As of December 31, 2013, the Company had $359 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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