Travelers 2009 Annual Report Download - page 235

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
11. INCOME TAXES
(for the year ended December 31, in millions) 2009 2008 2007
Composition of income tax expense (benefit) included in consolidated
statement of income
Current expense (benefit):
Federal................................................. $ 822 $ 763 $1,279
Foreign................................................. 75 68 103
State................................................... (8) 10 3
Total current tax expense .................................. 889 841 1,385
Deferred expense (benefit):
Federal................................................. 213 (58) 230
Foreign................................................. (13) 9—
Total deferred tax expense (benefit) . . . . . . . . . . . . . . . . . . . . . . . . . . . 200 (49) 230
Total income tax expense included in consolidated statement of income . . . . 1,089 792 1,615
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 ................................................. 1,099 (701) 47
Total income tax expense included in consolidated financial statements . . . . . $2,188 $ 91 $1,662
Effective tax rate
Income before federal, foreign and state income taxes . . . . . . . . . . . . . . . . . $4,711 $3,716 $6,216
Statutory tax rate ........................................... 35% 35% 35%
Expected federal income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,649 1,301 2,176
Tax effect of:
Nontaxable investment income ................................ (480) (480) (465)
Other, net............................................... (80) (29) (96)
Total income tax expense...................................... $1,089 $ 792 $1,615
Effective tax rate............................................ 23% 21% 26%
The current income tax payable was $150 million and $145 million at December 31, 2009 and 2008,
respectively, and is included in other liabilities in the consolidated balance sheet.
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