Humana 2013 Annual Report Download - page 123
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Humana Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Military services benefits payable of $4 million and $339 million at December 31, 2012 and 2011, respectively,
primarily consisted of our estimate of incurred healthcare services provided to beneficiaries under our previous
TRICARE South Region contract which were in turn reimbursed by the federal government, as more fully
described in Note 2. This amount was generally offset by a corresponding receivable due from the federal
government. There was no military services benefits payable at December 31, 2013 due to the transition to the
current TRICARE South Region contract on April 1, 2012, which is accounted for as an administrative services
only contract as more fully described in Note 2. This transition is also the primary reason for the decline in
military services benefits expense from 2011 to 2013.
The higher benefits expense associated with future policy benefits payable during 2013 relates to reserve
strengthening for our closed block of long-term care insurance policies acquired in connection with the 2007
KMG America Corporation, or KMG, acquisition more fully described in Note 17.
10. INCOME TAXES
The provision for income taxes consisted of the following for the years ended December 31, 2013, 2012 and
2011:
2013 2012 2011
(in millions)
Current provision:
Federal ............................................ $595 $708 $732
States and Puerto Rico ................................ 53 61 62
Total current provision ........................... 648 769 794
Deferred provision (benefit) ............................... 42 (80) 22
Provision for income taxes ........................ $690 $689 $816
The provision for income taxes was different from the amount computed using the federal statutory rate for
the years ended December 31, 2013, 2012 and 2011 due to the following:
2013 2012 2011
(in millions)
Income tax provision at federal statutory rate .................. $672 $669 $782
States, net of federal benefit, and Puerto Rico ................. 32 27 35
Tax exempt investment income ............................ (26) (26) (25)
Nondeductible executive compensation ...................... 6 14 11
Other, net .............................................. 6 5 13
Provision for income taxes ............................ $690 $689 $816
The provision for income taxes for 2013, 2012, and 2011 reflects a $6 million, $14 million, and $11 million,
respectively, estimated impact from limitations on the deductibility of annual compensation in excess of
$500,000 per employee as mandated by the Health Care Reform Law.
As of December 31, 2013, we do not have material uncertain tax positions reflected in our consolidated
balance sheet.
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