XML 34 R22.htm IDEA: XBRL DOCUMENT v3.5.0.2
Income Taxes
9 Months Ended
Sep. 30, 2016
Income Taxes [Abstract]  
Income Taxes

Note 14 Income Taxes

A. Income Tax Expense

 

The consolidated effective tax rates of 38.1% for the nine months ended September 30, 2016 and 37.8% for the nine months ended 2015 reflect the health insurance industry tax that is not deductible for federal income tax purposes. The effective tax rate for 2016 also reflects tax benefits associated with adopting ASU 2016-09 effective January 1, 2016 as described in Note 2, partially offset by the impact of certain costs related to the pending Anthem transaction that are not tax deductible.

 

As part of its global capital management strategy, the Company's foreign operations retain a significant portion of their earnings overseas. These undistributed earnings are deployed outside of the U.S. in support of the liquidity and capital needs of our foreign operations. The Company does not intend to repatriate these earnings to the U.S. and as a result, income taxes are provided using the respective foreign jurisdictions' tax rate. The Company has accumulated undistributed foreign earnings of $2.8 billion as of September 30, 2016. If the Company had intended to repatriate these foreign earnings to the U.S., the Company's consolidated balance sheet would have included an additional $405 million of deferred tax liabilities as of September 30, 2016.

 

B. Unrecognized Tax Benefits

 

Changes in unrecognized tax benefits were immaterial for the nine months ended September 30, 2016.

 

C. Other Tax Matters

 

The Internal Revenue Service (“IRS”) is expected to complete their examination of the Company's 2011 and 2012 consolidated federal income tax returns during the fourth quarter of 2016, the result of which are expected to have minimal effect on consolidated shareholders net income.