Travelers 2011 Annual Report Download - page 230

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
11. INCOME TAXES
(for the year ended December 31, in millions) 2011 2010 2009
Composition of income tax expense (benefit) included in consolidated
statement of income
Current expense (benefit):
Federal ................................................. $ (176) $ 846 $ 822
Foreign ................................................. 34 78 75
State ................................................... 310 (8)
Total current tax expense (benefit) ............................ (139) 934 889
Deferred expense (benefit):
Federal ................................................. 63 178 213
Foreign ................................................. 2(22) (13)
Total deferred tax expense ................................. 65 156 200
Total income tax expense (benefit) included in consolidated statement of
income ................................................. (74) 1,090 1,089
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 ................................................. 399 (2) 1,099
Total income tax expense included in consolidated financial statements ..... $ 325 $1,088 $2,188
(for the year ended December 31, in millions) 2011 2010 2009
Effective tax rate
Income before federal, foreign and state income taxes ................. $1,352 $4,306 $4,711
Statutory tax rate ........................................... 35% 35% 35%
Expected federal income tax expense ............................. 473 1,507 1,649
Tax effect of:
Nontaxable investment income ................................ (449) (476) (480)
Favorable resolution of prior year tax matters ..................... (104) — (89)
Other, net ............................................... 659 9
Total income tax expense (benefit) ............................... $ (74) $1,090 $1,089
Effective tax rate ............................................ (5)% 25% 23%
The current income tax receivable was $119 million at December 31, 2011 and is included in other
assets in the consolidated balance sheet. The current income tax payable was $265 million at
December 31, 2010 and is included in other liabilities in the consolidated balance sheet.
Income, before income taxes, from domestic operations for the years ended December 31, 2011,
2010 and 2009 was $1.23 billion, $4.20 billion and $4.54 billion, respectively. Income, before income
taxes, from foreign opererations for the years ended December 31, 2011, 2010 and 2009 was
$122 million, $106 million and $171 million, respectively.
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