Travelers 2005 Annual Report Download - page 191

THE ST. PAUL TRAVELERS COMPANIES, INC.AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
179
11. INCOMETAXES
(for the year ended December 31, in millions) 2005 2004 2003
Composition of income tax expense (benefit) included in consolidated
statement of income
Current expense (benefit) on continuingoperations:
Federal........................................................... $(18 )$ 283 $(7)
Foreign........................................................... 46 26 5
State............................................................. 20 5 —
Total current tax expense (benefit) on continuing operations .......... 48 314 (2)
Deferred expense (benefit) on continuing operations:
Federal........................................................... 500 (280 ) 539
Foreign........................................................... 62 34 —
State............................................................. — 1 —
Total deferred tax expense (benefit) on continuing operations ......... 562 (245 ) 539
Tax expense on income from continuing operations before minority interest. 610 69 537
Tax expense included in discontinued operations ......................... 851 54 —
Total income tax expense included in consolidated statement of income..... $1,461
$ 123 $ 537
Composition of income tax expense (benefit) included in common
shareholders’ equity
Expense (benefit) relating to stock-based compensation, the change in
unrealized appreciation on investments, unrealized loss on foreign
exchange and unrealized loss on derivatives, and other comprehensive
income............................................................ $ (333) $ (117) $ 234
Total income tax expense included in consolidated financial statements ..... $1,128 $ 6 $ 771
Effective tax rate
Income from continuing operations before federal, foreign and state income
taxes and minority interest.......................................... $2,671 $946 $2,229
Statutory tax rate..................................................... 35 %35 %35%
Expected federal income tax expense ................................... 935 331 780
Tax effect of:
Nontaxable investment income. ...................................... (371 )(284 ) (201)
Tax reserve adjustment ............................................. 11 6(40)
Foreign operations ................................................. 47 34 —
Other, net ......................................................... (12 )(18 ) (2)
Total income tax expense on income from continuing operations before
minority interest................................................... $610 $ 69 $ 537
Effective tax rate on income from continuing operations before minority
interest........................................................... 23 %7 %24%
The current income tax payable was $142 million and $184 million at December 31, 2005 and 2004,
respectively, and is included in other liabilities in the consolidated balance sheet.