US Bank 2002 Annual Report Download - page 96

Income Taxes
The components of income tax expense were:
(Dollars in Millions) 2002 2001 2000
Federal
Current ******************************************************************************* $1,273.5 $ 979.9 $ 996.1
Deferred ****************************************************************************** 316.6 (164.5) 324.5
Federal income tax****************************************************************** 1,590.1 815.4 1,320.6
State
Current ******************************************************************************* 144.9 131.8 159.0
Deferred ****************************************************************************** 41.3 (19.5) 32.6
State income tax******************************************************************** 186.2 112.3 191.6
Total income tax provision************************************************************ $1,776.3 $ 927.7 $1,512.2
A reconciliation of expected income tax expense at the federal statutory rate of 35% to the Company’s applicable income
tax expense follows:
(Dollars in Millions) 2002 2001 2000
Tax at statutory rate (35%) ************************************************************** $1,785.9 $922.0 $1,535.8
State income tax, at statutory rates, net of federal tax benefit ******************************* 121.0 73.0 124.5
Tax effect of
Tax-exempt interest, net ************************************************************* (28.6) (38.9) (56.0)
Amortization of nondeductible goodwill ************************************************ — 88.1 91.6
Tax credits ************************************************************************* (85.5) (69.4) (62.7)
Nondeductible merger charges ******************************************************* 5.0 52.5 4.9
Sale of preferred minority interest ***************************************************** — — (50.0)
Other items ************************************************************************ (21.5) (99.6) (75.9)
Applicable income taxes **************************************************************** $1,776.3 $927.7 $1,512.2
The tax effects of fair value adjustments on securities Deferred income tax assets and liabilities reflect the tax
available-for-sale, derivative instruments in cash flow hedges effect of temporary differences between the carrying
and certain tax benefits related to stock options are amounts of assets and liabilities for financial reporting
recorded directly to shareholders’ equity as part of other purposes and the amounts used for the same items for
comprehensive income. income tax reporting purposes.
The components of the Company’s net deferred tax liability as of December 31 were:
(Dollars in Millions) 2002 2001
Deferred tax assets
Allowance for credit losses ***************************************************************************** $ 961.0 $ 1,043.9
Pension and postretirement benefits ********************************************************************* 62.8 59.5
Federal AMT credits and capital losses ****************************************************************** 48.6 22.0
Real estate and other asset basis differences************************************************************* 39.1 32.6
State and federal operating loss carryforwards ************************************************************ 34.9 24.4
Other deferred tax assets, net ************************************************************************** 487.4 234.0
Gross deferred tax assets *************************************************************************** 1,633.8 1,416.4
Deferred tax liabilities
Leasing activities ************************************************************************************** (2,292.2) (1,642.5)
Securities available-for-sale and financial instruments ****************************************************** (478.8) (59.7)
Accelerated depreciation ******************************************************************************* (104.4) (117.7)
Deferred fees ***************************************************************************************** (70.6) (49.2)
Accrued severance, pension and retirement benefits******************************************************* (65.0) 2.2
Other investment basis differences ********************************************************************** (37.2) (32.5)
Other deferred tax liabilities, net************************************************************************* (248.7) (73.6)
Gross deferred tax liabilities ************************************************************************* (3,296.9) (1,973.0)
Valuation allowance ************************************************************************************ (1.0) (16.6)
Net deferred tax liability *************************************************************************** $(1,664.1) $ (573.2)
94 U.S. Bancorp
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