Travelers 2003 Annual Report Download - page 128

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126
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
9. FEDERAL INCOME TAXES
(for the year ended December 31, in millions) 2003 2002 2001
Effective tax rate
Income (loss) before federal income taxes, minority interest and
cumulative effect of changes in accounting principles
$ 2,229.4
$ (259.8)
$ 1,389.0
Statutory tax rate 35.0% 35.0% 35.0%
Expected federal income taxes (benefit) 780.3 (90.9) 486.2
Tax effect of:
Nontaxable investment income (200.5) (180.1) (169.2)
Recoveries under Citigroup Indemnification Agreement - (182.0) -
Tax reserve adjustment (40.0) (23.0) (15.0)
Other, net (2.4) (.5) 24.8
Federal income taxes (benefit) $ 537.4 $ (476.5) $ 326.8
Effective tax rate 24.1% (183.4)% 23.5%
Composition of federal income taxes
Current expense:
United States $ (6.7) $ 109.0 $ 310.6
Foreign 5.0 3.3 5.1
Total (1.7) 112.3 315.7
Deferred expense:
United States 538.7 (588.5) 11.0
Foreign .4 (.3) .1
Total 539.1 (588.8) 11.1
Federal income taxes (benefit) $ 537.4 $ (476.5) $ 326.8
Additional tax benefits attributable to employee stock plans allocated directly to shareholders’ equity were $6.3
million, $2.6 million and $.3 million for the years ended December 31, 2003, 2002 and 2001, respectively.
The current federal income tax payable was $226.4 million and $179.5 million at December 31, 2003 and 2002,
respectively and is included in other liabilities in the consolidated balance sheet.