Travelers 2012 Annual Report Download - page 232

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
12. INCOME TAXES
(for the year ended December 31, in millions) 2012 2011 2010
Composition of income tax expense (benefit) included in the consolidated
statement of income
Current expense (benefit):
Federal ............................................... $ 406 $ (176) $ 846
Foreign ............................................... 45 34 78
State ................................................. 3310
Total current tax expense (benefit) .......................... 454 (139) 934
Deferred expense (benefit):
Federal ............................................... 223 63 178
Foreign ............................................... 16 2 (22)
Total deferred tax expense ............................... 239 65 156
Total income tax expense (benefit) included in the consolidated statement
of income ............................................. 693 (74) 1,090
Composition of income tax included in common shareholders’ equity
Expense (benefit) relating to stock-based compensation, and the expense
(benefit) related to the changes in unrealized appreciation on
investments, unrealized loss on foreign exchange, unrealized loss on
derivatives and other comprehensive income .................... 57 399 (2)
Total income tax expense included in the consolidated financial
statements ............................................. $ 750 $ 325 $1,088
(for the year ended December 31, in millions) 2012 2011 2010
Effective tax rate
Income before federal, foreign and state income taxes ............... $3,166 $1,352 $4,306
Statutory tax rate ......................................... 35% 35% 35%
Expected federal income tax expense ........................... 1,108 473 1,507
Tax effect of:
Nontaxable investment income .............................. (427) (449) (476)
Favorable resolution of prior year tax matters ................... —(104) —
Other, net ............................................. 12 659
Total income tax expense (benefit) ............................. $ 693 $ (74) $1,090
Effective tax rate .......................................... 22% (5)% 25%
The current income tax payable was $102 million at December 31, 2012 and was included in other
liabilities in the consolidated balance sheet. The current income tax receivable was $119 million at
December 31, 2011 and was included in other assets in the consolidated balance sheet.
Income, before income taxes, from domestic operations for the years ended December 31, 2012,
2011 and 2010 was $3.00 billion, $1.23 billion and $4.20 billion, respectively. Income, before income
taxes, from foreign operations for the years ended December 31, 2012, 2011 and 2010 was $166 million,
$122 million and $106 million, respectively.
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