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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

Provision for Income Taxes

Earnings / (losses) from continuing operations before income taxes and the provision for income taxes consisted of the following:

		For the Years Ended December 31,
		2014				2013				2012
						(in millions)
Earnings / (losses) from continuing operations before income taxes:
United States		$	(135	)		$	(799	)		$	(1,822	)
Outside United States			2,689				3,191				3,596
Total		$	2,554			$	2,392			$	1,774
Provision for income taxes:
United States federal:
Current		$	(125	)		$	(489	)		$	(420	)
Deferred			28				103				(43	)
			(97	)			(386	)			(463	)
State and local:
Current			20				(35	)			(17	)
Deferred			11				22				(40	)
			31				(13	)			(57	)
Total United States			(66	)			(399	)			(520	)
Outside United States:
Current			644				648				896
Deferred			(225	)			(189	)			(208	)
Total outside United States			419				459				688
Total provision for income taxes		$	353			$	60			$	168

Effective Income Tax Rate

The effective income tax rate on pre-tax earnings differed from the U.S. federal statutory rate for the following reasons:

		For the Years Ended December 31,
		2014				2013				2012
U.S. federal statutory rate			35.0%				35.0%				35.0%
Increase / (decrease) resulting from:
State and local income taxes, net of federal tax benefit excluding IRS audit impacts			0.3%				(0.5%	)			(1.6%	)
Foreign rate differences			(14.5%	)			(16.3%	)			(20.6%	)
Reversal of other tax accruals no longer required			(10.5%	)			(9.6%	)			(4.3%	)
Indemnification resolution			–				(4.7%	)			–
Tax legislation			–				(2.2%	)			(3.9%	)
Divestitures			–				(2.1%	)			0.6%
Venezuela devaluation			1.7%				1.0%				–
Non-deductible expenses			1.5%				1.1%				3.6%
Other			0.3%				0.8%				0.7%
Effective tax rate			13.8%				2.5%				9.5%

Deferred Tax Assets and Liabilities Temporary Differences

The tax effects of temporary differences that gave rise to deferred income tax assets and liabilities consisted of the following:

		As of December 31,
		2014				2013
		(in millions)
Deferred income tax assets:
Accrued postretirement and postemployment benefits		$	227			$	176
Accrued pension costs			588				417
Other employee benefits			272				259
Accrued expenses			410				364
Loss carryforwards			656				553
Other			431				428
Total deferred income tax assets			2,584				2,197
Valuation allowance			(345	)			(335	)
Net deferred income tax assets		$	2,239			$	1,862
Deferred income tax liabilities:
Intangible assets		$	(5,843	)		$	(6,094	)
Property, plant and equipment			(784	)			(876	)
Other			(439	)			(468	)
Total deferred income tax liabilities			(7,066	)			(7,438	)
Net deferred income tax liabilities		$	(4,827	)		$	(5,576	)

Changes in Unrecognized Tax Benefit

The changes in our unrecognized tax benefits were:

		For the Years Ended December 31,
		2014				2013				2012
						(in millions)
January 1		$	1,189			$	1,164			$	1,522
Increases from positions taken during prior periods			143				94				119
Decreases from positions taken during prior periods			(247	)			(132	)			(198	)
Increases from positions taken during the current period			147				131				264
Decreases relating to settlements with taxing authorities			(203	)			(7	)			(257	)
Reductions resulting from the lapse of the applicable statute of limitations			(64	)			(55	)			(23	)
Impact of Spin-Off			–				–				(261	)
Currency / other			(113	)			(6	)			(2	)
December 31		$	852			$	1,189			$	1,164

X

- Definition

Tabular disclosure of the components of income tax expense attributable to continuing operations for each year presented including, but not limited to: current tax expense (benefit), deferred tax expense (benefit), investment tax credits, government grants, the benefits of operating loss carryforwards, tax expense that results from allocating certain tax benefits either directly to contributed capital or to reduce goodwill or other noncurrent intangible assets of an acquired entity, adjustments of a deferred tax liability or asset for enacted changes in tax laws or rates or a change in the tax status of the entity, and adjustments of the beginning-of-the-year balances of a valuation allowance because of a change in circumstances that causes a change in judgment about the realizability of the related deferred tax asset in future years.

+ References

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-Publisher FASB

-Name Accounting Standards Codification

-Topic 740

-SubTopic 10

-Section 50

-Paragraph 9

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- Definition

Tabular disclosure of the components of net deferred tax asset or liability recognized in an entity's statement of financial position, including the following: the total of all deferred tax liabilities, the total of all deferred tax assets, the total valuation allowance recognized for deferred tax assets.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 740

-SubTopic 10

-Section 50

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- Definition

Tabular disclosure of the reconciliation using percentage or dollar amounts of the reported amount of income tax expense attributable to continuing operations for the year to the amount of income tax expense that would result from applying domestic federal statutory tax rates to pretax income from continuing operations.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 740

-SubTopic 10

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-Paragraph 12

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- Definition

Tabular disclosure of tax positions taken in the tax returns filed or to be filed for which it is more likely than not that the tax position will not be sustained upon examination by taxing authorities (i.e., uncertain tax positions) and other types of income tax contingencies, including: (1) the policy on classification of interest and penalties; (2) a tabular reconciliation of the total amounts of unrecognized tax benefits at the beginning and end of the period; the total amount(s) of: (3) unrecognized tax benefits that, if recognized, would affect the effective tax rate, and (4) interest and penalties recognized in each of the income statement and balance sheet; (5) for positions for which it is reasonably possible that the total amounts unrecognized will significantly change within 12 months of the reporting date the: (i) nature of the uncertainty, (ii) nature of the event that could occur that would cause the change, and (iii) an estimate of the range of the reasonably possible change or a statement that an estimate of the range cannot be made; and (6) a description of tax years that remain subject to examination by major tax jurisdictions.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 740

-SubTopic 10

-Section 50

-Paragraph 15

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