Income Taxes (Tables)

12 Months Ended

Dec. 31, 2011

Income Taxes (Tables) [Abstract]

Components of income tax expense

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

(Millions)					2011		2010		2009
Current income tax expense:
	U.S. federal			$	958	$	532	$	661
	U.S. state and local				156		110		40
	Non-U.S.				434		508		295
		Total current income tax expense			1,548		1,150		996
Deferred income tax expense (benefit):
	U.S. federal				464		782		(231)
	U.S. state and local				68		78		24
	Non-U.S.				(23)		(103)		(85)
		Total deferred income tax expense
			(benefit)		509		757		(292)
Total income tax expense on
	continuing operations			$	2,057	$	1,907	$	704
Income tax (benefit) expense from
	discontinued operations			$	(36)	$	―	$	4

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:

			2011		2010		2009
Combined tax at U.S. statutory federal
	income tax rate		35.0	%	35.0	%	35.0	%
Increase (decrease) in taxes resulting from:
	Tax-exempt income		(1.5)		(1.9)		(4.6)
	State and local income taxes, net of
		federal benefit	2.6		2.7		2.7
	Non-U.S. subsidiaries earnings(a)		(4.4)		(3.1)		(6.8)
	Tax settlements(b)		(1.9)		(1.3)		(1.4)
	All other		(0.2)		0.6		(0.1)
		Actual tax rates	29.6	%	32.0	%	24.8	%

• Results for all years primarily include tax benefits associated with the undistributed earnings of certain non-U.S. subsidiaries that were deemed to be reinvested indefinitely.
• 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)				2011		2010
Deferred tax assets:
	Reserves not yet deducted for tax purposes		$	3,435	$	3,789
	Employee compensation and benefits			760		741
	Other			626		290
		Gross deferred tax assets		4,821		4,820
		Valuation allowance		(112)		(104)
		Deferred tax assets after valuation allowance		4,709		4,716
Deferred tax liabilities:
	Intangibles and fixed assets			1,013		834
	Deferred revenue			382		36
	Asset securitizations			39		43
	Net unrealized securities gains			25		19
	Other			375		387
		Gross deferred tax liabilities		1,834		1,319
Net deferred tax assets			$	2,875	$	3,397

Changes in unrecognized tax benefits

The following table presents changes in unrecognized tax benefits:

(Millions)				2011		2010		2009
Balance, January 1			$	1,377	$	1,081	$	1,176
Increases:
	Current year tax positions			77		182		39
	Tax positions related to prior years			247		403		161
	Effects of foreign currency
		translations		―		―		1
Decreases:
	Tax positions related to prior years			(457)		(145)		(197)
	Settlements with tax authorities			(2)		(138)		(97)
	Lapse of statute of limitations			(19)		(6)		(2)
Balance, December 31			$	1,223	$	1,377	$	1,081