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Express Scripts 2014 Annual Report
78
8. Income taxes
Theprovisionforincometaxesforcontinuingoperationsconsistsofthefollowing:
Year Ended December 31,
(in millions) 2014 2013 2012
Income(loss)fromcontinuingoperationsbeforeincometaxes:
UnitedStates $3,082.8 $2,987.6 $2,185.8
Foreign (16.6)42.7 14.6
Total $3,066.2 $3,030.3 $2,200.4
Currentprovision(benefit):
Federal $1,315.8 $1,483.4 $1,009.5
State 146.1 192.3 216.8
Foreign (0.2)2.0 0.7
Totalcurrentprovision 1,461.7 1,677.7 1,227.0
Deferredbenefit:
Federal (395.6)(520.0)(358.5)
State (32.0)(45.3)(29.8)
Foreign (2.9)(8.4)(0.7)
Totaldeferredbenefit (430.5)(573.7)(389.0)
Totalcurrentanddeferredprovision $1,031.2 $1,104.0 $838.0
Weconsiderourforeignearningstobeindefinitelyreinvested,andaccordinglyhavenotrecordedaprovisionfor
UnitedStatesfederalandstateincometaxesthereon.CumulativeundistributedforeignearningsforwhichUnitedStatestaxes
havenotbeenprovidedareincludedinconsolidatedretainedearningsintheamountof$96.2million,$82.2millionand$65.6
millionasofDecember31,2014,2013and2012,respectively.
Areconciliationofthestatutoryfederalincometaxrateandtheeffectivetaxratefollows(theeffectofforeign
taxesontheeffectivetaxratefor2014,2013and2012isimmaterial):
Year Ended December 31,
2014 2013 2012
Statutoryfederalincometaxrate 35.0%35.0%35.0%
Statetaxes,netoffederalbenefit 2.0 2.6 5.1
Non-controllinginterest (0.3)(0.3)(0.3)
Investmentinforeignsubsidiaries — (0.7)(3.0)
Other,net (3.1)(0.2)1.3
Effectivetaxrate 33.6%36.4%38.1%
During2014,werecognizedanetdiscretebenefitof$113.9millionprimarilyattributabletoachangeinestimate
resultingintherecognitionoftaxbenefitsforapermanentdeductionrelatedtoourdomesticproductionactivities,partially
offsetbychargesrelatedtointerestonandchangesinourunrecognizedtaxbenefits.In2013,werecognizedanetdiscrete
benefitof$51.2millionprimarilyattributabletoinvestmentsincertainforeignsubsidiarieswhichwerecognizedasaresultof
variousdivestitures,deferredtaximplicationsofnewlyenactedstatelaws,andincomenotrecognizedfortaxpurposes.
Theeffectivetaxraterecognizedindiscontinuedoperationswas(115.1)%and(30.5)%fortheyearsended
December31,2013and2012,respectively.Ourincometaxprovisionfromdiscontinuedoperationswas$28.7millionand$7.5
millionfor2013and2012,respectively.
74