Travelers 2015 Annual Report Download - page 225

THE TRAVELERS COMPANIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
12. INCOME TAXES
(for the year ended December 31, in millions) 2015 2014 2013
Composition of income tax expense included in the consolidated statement
of income
Current expense:
Federal ................................................. $1,144 $1,216 $1,059
Foreign ................................................. 29 28 30
State ................................................... 910 6
Total current tax expense .................................. 1,182 1,254 1,095
Deferred expense:
Federal ................................................. 117 121 167
Foreign ................................................. 222 10
Total deferred tax expense ................................. 119 143 177
Total income tax expense included in the consolidated statement of income . 1,301 1,397 1,272
Composition of income tax expense (benefit) included in shareholders’
equity
Expense (benefit) relating to share-based compensation, the changes in
unrealized gain on investments, unrealized loss on foreign exchange and
other items in other comprehensive income ....................... (448) 68 (822)
Total income tax expense included in the consolidated financial statements . . $ 853 $1,465 $ 450
(for the year ended December 31, in millions) 2015 2014 2013
Income before income taxes
U.S. ................................................... $4,621 $4,899 $4,804
Foreign ................................................. 119 190 141
Total income before income taxes ............................. 4,740 5,089 4,945
Effective tax rate
Statutory tax rate .......................................... 35% 35% 35%
Expected federal income tax expense ............................ 1,659 1,781 1,731
Tax effect of:
Nontaxable investment income ............................... (345) (379) (409)
Other, net ............................................. (13) (5) (50)
Total income tax expense .................................... $1,301 $1,397 $1,272
Effective tax rate .......................................... 27% 27% 26%
The Company paid income taxes of $1.21 billion, $1.15 billion and $1.06 billion during the years
ended December 31, 2015, 2014 and 2013, respectively. The current income tax payable was $50 million
and $139 million at December 31, 2015 and 2014, respectively, and was included in other liabilities in
the consolidated balance sheet.
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