Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

The components of income tax expense for the years ended December 31 included in the Consolidated Statements of Income were as follows:

(Millions)				2013		2012		2011
Current income tax expense:
	U.S. federal		$	1,730	$	982	$	958
	U.S. state and local			288		189		156
	Non-U.S.			514		445		434
		Total current income tax expense		2,532		1,616		1,548
Deferred income tax expense (benefit):
	U.S. federal			113		359		464
	U.S. state and local			4		39		68
	Non-U.S.			(120)		(45)		(23)
		Total deferred income tax expense		(3)		353		509
Total income tax expense on
	continuing operations		$	2,529	$	1,969	$	2,057
Income tax benefit from
	discontinued operations		$	―	$	―	$	(36)

Effective income tax rate

A reconciliation of the U.S. federal statutory rate of 35 percent to the Company's actual income tax rate for the years ended December 31 on continuing operations was as follows:

			2013		2012		2011
U.S. statutory federal income tax rate			35.0	%	35.0	%	35.0	%
Increase (decrease) in taxes resulting from:
	Tax-exempt income		(1.6)		(1.6)		(1.5)
	State and local income taxes, net of
		federal benefit	3.1		2.5		2.6
	Non-U.S. subsidiaries earnings^(a)		(2.8)		(5.2)		(4.4)
	Tax settlements^(b)		(1.9)		(0.2)		(1.9)
	All other		0.3		―		(0.2)
		Actual tax rates^(a)	32.1	%	30.5	%	29.6	%

Results for all years primarily included tax benefits associated with the undistributed earnings of certain non-U.S. subsidiaries that were deemed to be reinvested indefinitely. In addition, 2012 and 2011 included tax benefits of $146 million and $77 million, which decreased the actual tax rates by 2.3 percent and 1.1 percent, respectively, related to the realization of certain foreign tax credits.
Relates to the resolution of tax matters in various jurisdictions.

Components of deferred tax assets and liabilities

The significant components of deferred tax assets and liabilities as of December 31 are reflected in the following table:

(Millions)				2013		2012
Deferred tax assets:
	Reserves not yet deducted for tax purposes		$	3,813	$	3,828
	Employee compensation and benefits			721		761
	Other			546		537
		Gross deferred tax assets		5,080		5,126
		Valuation allowance		(121)		(162)
		Deferred tax assets after valuation allowance		4,959		4,964
Deferred tax liabilities:
	Intangibles and fixed assets			1,325		1,346
	Deferred revenue			453		403
	Deferred interest			363		378
	Asset Securitization			130		73
	Other			245		306
		Gross deferred tax liabilities		2,516		2,506
Net deferred tax assets			$	2,443	$	2,458