Voya 2013 Annual Report Download - page 341

ING U.S., Inc.
Notes to the Consolidated Financial Statements
(Dollar amounts in millions, unless otherwise stated)
allowance due to positive evidence primarily the result of net income before income tax, and the remainder
consisted of a $147.4 increase in the valuation allowance that did not impact income tax expense, which was
established against the Company’s estimate of additional deferred tax assets based on the Company’s 2011 tax
return as filed. The 2011 amount allocated to operations was primarily the result of increasing negative evidence
that caused a change in judgment regarding the ability to realize deferred tax assets. For 2011, the Company
concluded that the cumulative loss in recent years was significant negative evidence requiring the establishment
of a valuation allowance. For 2013 and 2011, the valuation allowance allocated to Other comprehensive income
was directly related to the appreciation of the Company’s available-for-sale portfolio during those years and not
due to changes in expectations of taxable income in future periods.
Unrecognized Tax Benefits
Reconciliations of the change in the unrecognized income tax benefits were as follows for the periods indicated:
Years Ended December 31,
2013 2012 2011
Balance at beginning of period ......................... $61.1 $ 74.0 $ 197.0
Additions for tax positions related to current year .......... 1.7 2.4 7.0
Additions for tax positions related to prior years ........... 4.4 1.3 —
Reductions for tax positions related to prior years .......... (1.2) (6.0) (25.0)
Reductions for settlements with taxing authorities .......... — — (105.0)
Reductions for expiring statutes ........................ (5.1) (10.6) —
Balance at end of period .............................. $60.9 $ 61.1 $ 74.0
The Company had $16.1, $19.7, and $24.0 of unrecognized tax benefits as of December 31, 2013, 2012 and
2011, respectively, which would affect the Company’s effective rate if recognized.
Interest and Penalties
The Company recognizes interest expense and penalties, if applicable, related to unrecognized tax benefits in tax
expense net of federal income tax. The total amounts of gross accrued interest and penalties on the Company’s
Consolidated Balance Sheets as of December 31, 2013 and 2012 were $6.2 and $5.9, respectively. The Company
recognized gross interest (benefit) related to unrecognized tax in its Consolidated Statements of Operations of
$0.3, $(17.3) and $(7.0) for the years ended December 31, 2013, 2012 and 2011, respectively.
Tax Regulatory Matters
During the first quarter 2013, the IRS completed its examination of the Company’s returns through tax year
2011. The 2011 audit settlement did not have a material impact on the financial statements. The Company is
currently under audit by the IRS, and it is expected that the examination of tax year 2012 will be finalized within
the next twelve months. The Company and the IRS have agreed to participate in the Compliance Assurance
Program for the tax years 2012 through 2014.
The Company does not expect any material changes to the unrecognized tax benefits within the next year.
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