Humana 2005 Annual Report Download - page 88
Download and view the complete annual report
Please find page 88 of the 2005 Humana annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.-
1 -
2
-
3
-
4
-
5
-
6
-
7
-
8
-
9
-
10
-
11
-
12
-
13
-
14
-
15
-
16
-
17
-
18
-
19
-
20
-
21
-
22
-
23
-
24
-
25
-
26
-
27
-
28
-
29
-
30
-
31
-
32
-
33
-
34
-
35
-
36
-
37
-
38
-
39
-
40
-
41
-
42
-
43
-
44
-
45
-
46
-
47
-
48
-
49
-
50
-
51
-
52
-
53
-
54
-
55
-
56
-
57
-
58
-
59
-
60
-
61
-
62
-
63
-
64
-
65
-
66
-
67
-
68
-
69
-
70
-
71
-
72
-
73
-
74
-
75
-
76
-
77
-
78 -
79 -
80 -
81 -
82 -
83 -
84 -
85 -
86 -
87 -
88 -
89 -
90 -
91 -
92 -
93 -
94 -
95 -
96 -
97 -
98 -
99
-
100
-
101
-
102
-
103
-
104
-
105
-
106
-
107
-
108
-
109
-
110
-
111
-
112
-
113
-
114
-
115
-
116
-
117
-
118
-
119
-
120
-
121
-
122
-
123
-
124
-
125
-
126
-
127
-
128
 |
 |
Humana Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
expiration of the statute of limitations. In addition, during 2005 the Internal Revenue Service completed their
audit of all open years prior to 2003 which also resulted in a $3.5 million reduction in 2005 tax expense
associated with revisions to prior year’s estimated taxes. Changes in the capital loss valuation allowance resulted
from our regular evaluation of probable capital gain realization in the allowable carryforward period given our
recent and historical capital gain experience and the consideration of alternative tax planning strategies. The
capital loss carryforward expired on December 31, 2005. As such, the remaining unused deferred tax asset and
associated allowance were written off.
Deferred income tax balances reflect the impact of temporary differences between the tax bases of assets or
liabilities and their reported amounts in our consolidated financial statements, and are stated at enacted tax rates
expected to be in effect when the reported amounts are actually recovered or settled. Principal components of our
net deferred tax balances at December 31, 2005 and 2004 were as follows:
Assets (Liabilities)
2005 2004
(in thousands)
Investment securities ................................... $ (14,963) $ (10,522)
Depreciable property and intangible assets .................. (133,672) (110,369)
Medical and other expenses payable ....................... (4,119) (2,538)
Unearned revenues ..................................... 5,718 8,858
Professional liability risks ............................... 13,650 13,193
Compensation and other accruals .......................... 78,893 45,047
Net operating loss carryforwards .......................... 11,987 13,970
Capital loss carryforward ................................ — 22,078
Valuation allowance—capital loss carryforward .............. — (20,123)
Total net deferred income tax liabilities ............. $ (42,506) $ (40,406)
Amounts recognized in the consolidated balance sheets:
Other current assets ................................ $ 68,510 $ 19,428
Other long-term liabilities ........................... (111,016) (59,834)
Total net deferred income tax liabilities ............. $ (42,506) $ (40,406)
At December 31, 2005, we had approximately $31.9 million of net operating losses to carryforward related
to prior acquisitions. These net operating loss carryforwards, if not used to offset future taxable income, will
expire from 2006 through 2020. Based on our historical record of producing taxable income and profitability, we
have concluded that future operating income will be sufficient to give rise to tax expense to recover all deferred
tax assets.
78