Travelers 2010 Annual Report Download - page 227

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
11. INCOME TAXES
(for the year ended December 31, in millions) 2010 2009 2008
Composition of income tax expense (benefit) included in consolidated
statement of income
Current expense (benefit):
Federal ................................................. $ 846 $ 822 $ 763
Foreign ................................................. 78 75 68
State ................................................... 10 (8) 10
Total current tax expense .................................. 934 889 841
Deferred expense (benefit):
Federal ................................................. 178 213 (58)
Foreign ................................................. (22) (13) 9
Total deferred tax expense (benefit) ........................... 156 200 (49)
Total income tax expense included in consolidated statement of income .... 1,090 1,089 792
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 ................................................. (2) 1,099 (701)
Total income tax expense included in consolidated financial statements ..... $1,088 $2,188 $ 91
Effective tax rate
Income before federal, foreign and state income taxes ................. $4,306 $4,711 $3,716
Statutory tax rate ........................................... 35% 35% 35%
Expected federal income tax expense ............................. 1,507 1,649 1,301
Tax effect of:
Nontaxable investment income ................................ (476) (480) (480)
Other, net ............................................... 59 (80) (29)
Total income tax expense ...................................... $1,090 $1,089 $ 792
Effective tax rate ............................................ 25% 23% 21%
The current income tax payable was $265 million and $150 million at December 31, 2010 and 2009,
respectively, and is included in other liabilities in the consolidated balance sheet.
215