Income Taxes

9 Months Ended

Sep. 30, 2011

Income Taxes [Abstract]

Income Taxes

Note 11    Income Taxes

The components of income tax expense were:

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
(Dollars in Millions)	2011			2010			2011		2010
Federal
Current	$	450		$	313		$	907	$	768
Deferred		(41	)		(123	)		232		(266	)
Federal income tax		409			190			1,139		502
State
Current		85			82			157		143
Deferred		(4	)		(12	)		18		(25	)
State income tax		81			70			175		118
Total income tax provision	$	490		$	260		$	1,314	$	620

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						Nine Months Ended
	September 30,						September 30,
(Dollars in Millions)	2011			2010			2011			2010
Tax at statutory rate	$	610		$	403		$	1,671		$	1,025
State income tax, at statutory rates, net of federal tax benefit		53			46			114			77
Tax effect of
Tax credits, net of related expenses		(124	)		(114	)		(319	)		(324	)
Tax-exempt income		(57	)		(56	)		(170	)		(161	)
Noncontrolling interests		8			5			22			12
Other items		–			(24	)		(4	)		(9	)
Applicable income taxes	$	490		$	260		$	1,314		$	620

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 September 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 jurisdication.

The Company’s net deferred tax position was a $750 million liability at September 30, 2011, and a $424 million asset at December 31, 2010.