Income Taxes

6 Months Ended

Jun. 30, 2011

Income Taxes [Abstract]

Income Taxes

Note 11    Income Taxes

The components of income tax expense were:

	Three Months Ended					Six Months Ended
	June 30,					June 30,
(Dollars in Millions)	2011		2010			2011		2010
Federal
Current	$	51	$	301		$	457	$	455
Deferred		317		(123	)		273		(143	)
Federal income tax		368		178			730		312
State
Current		62		32			72		61
Deferred		28		(11	)		22		(13	)
State income tax		90		21			94		48
Total income tax provision	$	458	$	199		$	824	$	360

A reconciliation of expected income tax expense at the federal statutory rate of 35 percent to the Company’s applicable income tax expense follows:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(Dollars in Millions)	2011			2010			2011			2010
Tax at statutory rate	$	573		$	333		$	1,061		$	622
State income tax, at statutory rates, net of federal tax benefit		58			14			61			31
Tax effect of
Tax credits, net of related expenses		(108	)		(110	)		(195	)		(210	)
Tax-exempt income		(57	)		(53	)		(113	)		(105	)
Noncontrolling interests		8			5			14			7
Other items		(16	)		10			(4	)		15
Applicable income taxes	$	458		$	199		$	824		$	360

The Company’s income tax returns are subject to review and examination by federal, state, local and foreign government authorities. On an ongoing basis, numerous federal, state, local and foreign examinations are in progress and cover multiple tax years. As of June 30, 2011, the federal taxing authority has completed its examination of the Company through the fiscal year ended December 31, 2006. The years open to examination by foreign, state and local government authorities vary by jurisdiction.

The Company’s net deferred tax position was a $711 million liability at June 30, 2011, and a $424 million asset at December 31, 2010.