SunTrust 2014 Annual Report Download - page 141

Notes to Consolidated Financial Statements, continued
118
A reconciliation of the expected income tax expense, using the statutory federal income tax rate of 35%, to the Company’s actual
provision for income taxes and the effective tax rate during the years ended December 31 were as follows:
2014 2013 2012
(Dollars in millions) Amount
Percent of
Pre-Tax
Income Amount
Percent of
Pre-Tax
Income Amount
Percent of
Pre-Tax
Income
Income tax expense at federal statutory rate $793 35.0% $583 35.0% $970 35.0%
Increase (decrease) resulting from:
State income taxes, net 12 0.5 21 1.2 (9) (0.3)
Tax-exempt interest (89) (3.9) (80) (4.8) (77) (2.8)
Internal restructuring — — (343) (20.6) — —
Changes in UTBs (including interest), net (82) (3.6) 152 9.1 1 —
Income tax credits, net of amortization 1(65) (2.9) (53) (3.2) (58) (2.1)
Non-deductible expenses (57) (2.5) 49 3.0 16 0.6
Other (19) (0.8) (7) (0.4) (31) (1.1)
Total income tax expense and rate $493 21.8% $322 19.3% $812 29.3%
1 Excludes tax credits of $21 million for the year ended December 31, 2014, which were recognized as a reduction to the related investment asset.
Deferred income tax assets and liabilities result from differences
between the timing of the recognition of assets and liabilities for
financial reporting purposes and for income tax return purposes.
These assets and liabilities are measured using the enacted
federal and state tax rates expected to apply in the periods in
which the deferred tax assets or liabilities are expected to be
realized. The net deferred income tax liability is recorded in other
liabilities in the Consolidated Balance Sheets. The significant
components of the DTAs and DTLs, net of the federal impact
for state taxes, at December 31 were as follows:
(Dollars in millions) 2014 2013
DTAs:
ALLL $710 $795
Accrued expenses 358 463
State NOLs and other carryforwards 201 208
Net unrealized losses in AOCI 56 153
Other 127 131
Total gross DTAs 1,452 1,750
Valuation allowance (98) (102)
Total DTAs 1,354 1,648
DTLs:
Leasing 762 804
Compensation and employee benefits 113 97
MSRs 515 566
Loans 93 98
Goodwill and intangible assets 190 151
Fixed assets 140 153
Other 61 53
Total DTLs 1,874 1,922
Net DTL ($520) ($274)
The DTAs include state NOLs and other state carryforwards that
will expire, if not utilized, in varying amounts from 2015 to 2034.
At December 31, 2014 and 2013, the Company had a valuation
allowance recorded against its state carryforwards and certain
state DTAs of $98 million and $102 million, respectively. A
valuation allowance is not required for the federal and the
remaining state DTAs because it is more-likely-than-not these
assets will be realized.