Travelers 2013 Annual Report Download - page 236

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
12. INCOME TAXES
(for the year ended December 31, in millions) 2013 2012 2011
Composition of income tax expense (benefit) included in the consolidated
statement of income
Current expense (benefit):
Federal ............................................... $1,059 $ 406 $ (176)
Foreign ............................................... 30 45 34
State ................................................. 633
Total current tax expense (benefit) .......................... 1,095 454 (139)
Deferred expense:
Federal ............................................... 167 223 63
Foreign ............................................... 10 16 2
Total deferred tax expense ............................... 177 239 65
Total income tax expense (benefit) included in the consolidated statement
of income ............................................. 1,272 693 (74)
Composition of income tax included in shareholders’ equity
Expense (benefit) relating to stock-based compensation, and the expense
(benefit) related to the changes in unrealized gain on investments,
unrealized loss on foreign exchange and other comprehensive income . . (822) 57 399
Total income tax expense included in the consolidated financial
statements ............................................. $ 450 $ 750 $ 325
(for the year ended December 31, in millions) 2013 2012 2011
Income before income taxes
U.S ................................................... $4,804 $2,955 $1,175
Foreign ................................................. 141 211 177
Total income before income taxes ............................ 4,945 3,166 1,352
Effective tax rate
Statutory tax rate ......................................... 35% 35% 35%
Expected federal income tax expense ........................... 1,731 1,108 473
Tax effect of:
Nontaxable investment income .............................. (409) (427) (449)
Resolution of prior year tax matters .......................... (63) — (104)
Other, net ............................................. 13 12 6
Total income tax expense (benefit) ............................. $1,272 $ 693 $ (74)
Effective tax rate .......................................... 26% 22% (5)%
The Company paid income taxes of $1.06 billion, $188 million and $218 million during the years
ended December 31, 2013, 2012 and 2011, respectively. The current income tax payable was $85 million
and $102 million at December 31, 2013 and 2012, respectively, and was included in other liabilities in
the consolidated balance sheet.
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