Voya 2013 Annual Report Download - page 195

The negative evidence at December 31, 2013 that outweighed the positive evidence included the following:
• In recent periods we have experienced pre-tax losses and volatility in earnings;
• The 2012 taxable income reported in our federal tax return was positive but included several
transactions not deemed likely to repeat in the same magnitude;
• Our net operating loss carry forwards begin to significantly expire in 2023; and
• There continues to be uncertainty and volatility related to our CBVA results.
In recent periods, certain of our negative evidence has been improving and additional negative evidence could
become positive in the future. For example, following its redomestication, SLDI will be required to join in the ING
U.S., Inc. consolidated federal income tax return as an actual U.S. company (rather than as an electing foreign
insurance company under Section 953(d) of tax code), thereby avoiding certain restrictions that can apply to such
foreign entities. Also, the trend in operating earnings has been improving. In future periods, we will continue to
evaluate our ability to reduce our valuation allowance against deferred tax assets. If evidence in future periods
changes such that it is more likely than not that part or all of the net deferred tax asset will be realized, we will
reduce the valuation allowance at that time. Examples of factors that could affect our assessment are:
• A strong positive trend in our financial performance over consecutive quarters;
• Taxable income reported in our federal tax return;
• Significant forecasted taxable income;
• Reduction in the uncertainty and volatility related to our CBVA results; and
• A sustained average period of positive cumulative income after adjustments for permanent differences
and noncontrolling interests.
We will continue to evaluate our cumulative income/loss position and our income trend. If we determine
that it is appropriate to reduce a valuation allowance in the future, it would result in an income tax benefit. At this
time, we are unable to estimate if or when such a reduction may occur.
As of December 31, 2013, we have recognized $728.5 million deferred tax assets based on tax planning
related to unrealized gains on investment assets. This tax planning strategy supports recognition of deferred tax
assets, which have been provided on deductible temporary differences. Future changes, such as interest rate
movements or an ownership change under Section 382 of the Internal Revenue Code (discussed below), can
adversely impact this tax planning strategy. To the extent unrealized gains decrease or to the extent loss
utilization is limited, the tax benefit will be reduced by increasing the tax valuation allowance.
The deferred tax valuation allowance was $2.8 billion and $3.0 billion as of December 31, 2013 and 2012,
respectively. Pursuant to U.S. GAAP, we do not specifically identify the valuation allowance with individual
categories. However, as of December 31, 2013, we estimate that approximately $1.0 billion, $31 million,
$264 million, $190 million and $1.1 billion were related to federal net operating losses, non-life realized capital
losses, non-life subgroup deferred amounts, life subgroup deferred amounts and SLDI related deferred amounts,
respectively. The remaining balance was attributable to various items including state taxes, and other deferred tax
assets. We also estimated that the deferred tax asset associated with life subgroup deferred amounts, as of
December 31, 2013, was approximately $575 million, excluding the valuation allowance. As of December 31,
2012, we estimated that $1.0 billion, $43 million, $280 million, $640 million and $742 million of the valuation
allowance were related to federal net operating losses, non-life realized capital losses, non-life subgroup deferred
amounts, life subgroup deferred amounts and SLDI related deferred amounts, respectively. The remaining
balance was attributable to various items including state taxes, and other deferred tax assets. We also estimated
that the deferred tax asset associated with life subgroup deferred amounts, as of December 31, 2012, was
approximately $640 million, excluding the valuation allowance.
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