Annual report pursuant to Section 13 and 15(d)

Income Taxes (Tables)

v3.19.3.a.u2
Income Taxes (Tables)
12 Months Ended
Dec. 31, 2019
Income Tax Disclosure [Abstract]  
Consolidated Income Tax Expense

The consolidated income tax expense consists of the following for the years ended December 31 ($ in millions):
 
2019
 
2018
 
2017
Current provision
 
 
 
 
 
Federal
$
381

 
$
498

 
$
421

State and local
41

 
107

 
14

Total current provision
422

 
605

 
435

Deferred provision
51

 
(131
)
 
(109
)
Total income tax expense
$
473

 
$
474

 
$
326


Reconciliation Of Tax Provision At The U.S. Federal Statutory Rate To Income Tax Expense
The reconciliation of the tax provision at the U.S. federal statutory rate to income tax expense for the years ended December 31 is as follows ($ in millions):
 
2019
 
2018
 
2017
Earnings from operations, before income tax expense
$
1,782


$
1,368


$
1,134

Loss (earnings) attributable to flow through noncontrolling interest
11

 
4

 
15

Earnings from operations, less noncontrolling interest, before income tax expense
1,793

 
1,372

 
1,149

 
 
 


 
 
Tax provision at the U.S. federal statutory rate
377

 
288

 
402

State income taxes, net of federal income tax benefit
49

 
52

 
11

Nondeductible compensation
42

 
33

 
58

ACA Health Insurer Fee

 
149

 

Income Tax Reform

 

 
(125
)
Valuation Allowance


(28
)

14

Nondeductible goodwill impairment
30





Other, net
(25
)
 
(20
)
 
(34
)
Income tax expense
$
473

 
$
474

 
$
326


Tax Effects Of Temporary Differences Which Give Rise To Deferred Tax Assets And Liabilities

The tax effects of temporary differences which give rise to deferred tax assets and liabilities are presented below for the years ended December 31 ($ in millions):
 
2019
 
2018
Deferred tax assets:
 
 
 
Medical claims liability
$
66

 
$
78

Nondeductible liabilities
97

 
128

Net operating loss and tax credit carryforwards
83

 
77

Compensation accruals
113

 
109

Premium and trade receivables
78

 
76

Operating lease liability
186

 

Other
46

 
61

Deferred tax assets
669

 
529

Valuation allowance
(66
)
 
(53
)
Net deferred tax assets
$
603

 
$
476

 
 
 
 
Deferred tax liabilities:
 
 
 
Intangible assets
$
346

 
$
343

Prepaid assets
26

 
31

Fixed assets
187

 
132

Investments in joint ventures
2

 
27

Deferred revenue
13

 
19

Right of use asset
171

 

Other
47

 
6

Deferred tax liabilities
792

 
558

Net deferred tax assets (liabilities)
$
(189
)
 
$
(82
)
Summary of Reserve for Uncertain Tax Positions

The Company maintains a reserve for uncertain tax positions that may be challenged by a tax authority. A rollforward of the beginning and ending amount of uncertain tax positions, exclusive of related interest and penalties, is as follows:
 
Year Ended December 31,
 
2019
 
2018
Gross unrecognized tax benefits, beginning of period
$
277

 
$
257

Gross increases:
 
 
 
Current year tax positions
39

 
7

Prior year tax positions
14

 
14

Gross decreases:
 
 
 
Prior year tax positions
(8
)
 

Settlements
(16
)
 
 
Statute of limitation lapses
(1
)
 
(1
)
Gross unrecognized tax benefits, end of period
$
305

 
$
277