Travelers 2008 Annual Report Download - page 231

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
11. INCOME TAXES
(for the year ended December 31, in millions) 2008 2007 2006
Composition of income tax expense (benefit) included in consolidated
statement of income
Current expense:
Federal ................................................. $ 763 $1,279 $ 943
Foreign ................................................. 68 103 64
State ................................................... 10 39
Total current tax expense .................................. 841 1,385 1,016
Deferred expense (benefit):
Federal ................................................. (58) 230 521
Foreign ................................................. 9— (20)
State ................................................... ———
Total deferred tax expense (benefit) ........................... (49) 230 501
Total income tax expense included in consolidated statement of income .... 792 1,615 1,517
Composition of income tax 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 ................................................. (701) 47 (7)
Total income tax expense included in consolidated financial statements ..... $91$1,662 $1,510
Effective tax rate
Income before federal, foreign and state income taxes ................. $3,716 $6,216 $5,725
Statutory tax rate ........................................... 35% 35% 35%
Expected federal income tax expense ............................. 1,301 2,176 2,004
Tax effect of:
Nontaxable investment income ................................ (480) (465) (421)
Other, net ............................................... (29) (96) (66)
Total income tax expense ...................................... $ 792 $1,615 $1,517
Effective tax rate ............................................ 21% 26% 26%
The current income tax payable was $145 million and $176 million at December 31, 2008 and 2007,
respectively, and is included in other liabilities in the consolidated balance sheet.
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