US Bank 2004 Annual Report Download - page 98
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Please find page 98 of the 2004 US Bank annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.Income Taxes
The components of income tax expense were:
(Dollars in Millions) 2004 2003 2002
Federal
Current ********************************************************************************* $1,530.9 $1,528.8 $1,268.9
Deferred ******************************************************************************** 260.2 222.9 256.9
Federal income tax ******************************************************************** 1,791.1 1,751.7 1,525.8
State
Current ********************************************************************************* 197.4 139.8 146.9
Deferred ******************************************************************************** 21.1 49.8 34.8
State income tax********************************************************************** 218.5 189.6 181.7
Total income tax provision ************************************************************** $2,009.6 $1,941.3 $1,707.5
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) 2004 2003 2002
Tax at statutory rate (35%)***************************************************************** $2,161.7 $1,978.0 $1,727.4
State income tax, at statutory rates, net of federal tax benefit ********************************** 142.0 123.2 116.5
Tax effect of
Tax credits *************************************************************************** (145.6) (109.6) (85.5)
Resolution of federal and state income tax examinations************************************ (106.3) — —
Tax-exempt interest, net**************************************************************** (21.4) (21.7) (24.9)
Other items ************************************************************************** (20.8) (28.6) (26.0)
Applicable income taxes******************************************************************* $2,009.6 $1,941.3 $1,707.5
The tax effects of fair value adjustments on securities of the various taxing authorities at both the examination
available-for-sale, derivative instruments in cash flow hedges and appellate levels. The resolution of these matters and the
and certain tax benefits related to stock options are taxing authorities’ acceptance of submitted claims and tax
recorded directly to shareholders’ equity as part of other return adjustments resulted in a reduction of accrued
comprehensive income. income tax expense of $106.3 million. At December 31,
In preparing its tax returns, the Company is required to 2004, the Company is in various stages of the examination
interpret complex tax laws and regulations and utilize process for federal tax return matters of U.S. Bancorp and
income and cost allocation methods to determine its taxable its predecessor companies for periods dating back to 2000.
income. On an ongoing basis, the Company is subject to In addition, examinations by various state taxing authorities
examinations by federal and state taxing authorities that date back to 1997. At year-end, the Company believes the
may give rise to differing interpretations of these complex aggregate amount of any additional tax liabilities that may
laws, regulations and methods. Due to the nature of the result from these examinations, if any, will not have a
examination process, it generally takes years before these material adverse effect on the financial condition, results of
examinations are completed and matters are resolved. operations or cash flows of the Company.
During 2004 the Company resolved federal income tax Deferred income tax assets and liabilities reflect the tax
examinations covering substantially all of the Company’s effect of temporary differences between the carrying
legal entities for the years 1995 through 1999 and certain amounts of assets and liabilities for financial reporting
state tax examinations for the years 1995 through 2000. purposes and the amounts used for the same items for
These examinations were resolved through a series of income tax reporting purposes.
negotiations held between the Company and representatives
96 U.S. BANCORP
Note 21