Health Net 2013 Annual Report Download - page 151

HEALTH NET, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
F-47
utilization of capital loss carryforwards against gains on sale of marketable securities. Such beneficial impacts are
partially offset by the effect of certain compensation treated as non-deductible under the ACA.
Significant components of our deferred tax assets and liabilities as of December 31 are as follows:
2013 2012
(Dollars in millions)
DEFERRED TAX ASSETS:
Accrued liabilities........................................................................................................ $ 87.8 $ 92.7
Accrued compensation and benefits............................................................................ 67.1 70.5
Net operating and capital loss carryforwards.............................................................. 22.2 22.9
Unrealized losses on investments................................................................................ 16.7 —
Insurance loss reserves and unearned premiums......................................................... 12.7 15.4
Deferred gain and revenues......................................................................................... 6.6 12.4
Other............................................................................................................................ 8.8 2.4
Deferred tax assets before valuation allowance .......................................................... 221.9 216.3
Valuation allowance..................................................................................................... (23.3)(19.7)
Net deferred tax assets................................................................................................. $ 198.6 $ 196.6
DEFERRED TAX LIABILITIES:
Depreciable and amortizable property......................................................................... $ 77.1 $ 63.6
Prepaid expenses ......................................................................................................... 14.9 17.7
Deferred revenue ......................................................................................................... 13.2 25.8
Unrealized gains on investments................................................................................. — 22.9
Other............................................................................................................................ 4.0 1.9
Deferred tax liabilities................................................................................................. $ 109.2 $ 131.9
During 2013, our total valuation allowance increased by a net $3.6 million, primarily resulting from a change in
our investment portfolio to an unrealized loss position. The unrealized losses could produce capital losses that we
expect would be subject to limitations on use for state tax reporting.
For 2013, 2012 and 2011 the income tax benefit realized from share-based award exercises was $6.1 million,
$16.6 million and $8.7 million, respectively. Of the tax benefits realized, $(1.4) million, $5.1 million and $0.8 million
were allocated to stockholders’ equity in 2013, 2012 and 2011, respectively.
As of December 31, 2013, we had federal and state net operating loss carryforwards of approximately $6.1
million and $162.9 million, respectively. The net operating loss carryforwards expire at various dates through 2032.
Limitations on utilization may apply to all of the federal and state net operating loss carryforwards. Accordingly,
valuation allowances have been provided to account for the potential limitations on utilization of these tax benefits. No
portion of the 2013 valuation allowance was allocated to reduce goodwill.