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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2016

Provision for Income Taxes

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

		For the Years Ended December 31,
		2016				2015				2014
		(in millions)
Earnings / (losses) from continuing operations before income taxes:
United States		$	(364	)		$	43			$	(135	)
Outside United States			1,818				7,841				2,689
Total		$	1,454			$	7,884			$	2,554
Provision for income taxes:
United States federal:
Current		$	(227	)		$	(90	)		$	(125	)
Deferred			141				136				28
			(86	)			46				(97	)
State and local:
Current			7				6				20
Deferred			8				(3	)			11
			15				3				31
Total United States			(71	)			49				(66	)
Outside United States:
Current			490				707				644
Deferred			(290	)			(163	)			(225	)
Total outside United States			200				544				419
Total provision for income taxes		$	129			$	593			$	353

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,
		2016				2015				2014
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			0.8%				(0.1)%				0.3%
Foreign rate differences			(18.6)%				(2.5)%				(14.5)%
Reversal of other tax accruals no longer required			(7.7)%				(1.4)%				(10.5)%
Tax accrual on investment in Keurig			2.3%				–				–
Tax legislation			(4.0)%				(0.5)%				–
Gains on coffee business transactions and divestitures			–				(26.9)%				–
Loss on deconsolidation of Venezuela			–				3.5%				–
Remeasurement of net monetary assets in Venezuela			–				–				1.7%
Non-deductible expenses			0.9%				0.3%				1.5%
Other			0.2%				0.1%				0.3%
Effective tax rate			8.9%				7.5%				13.8%

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,
		2016				2015
		(in millions)
Deferred income tax assets:
Accrued postretirement and postemployment benefits		$	214			$	230
Accrued pension costs			370				414
Other employee benefits			237				265
Accrued expenses			379				343
Loss carryforwards			619				636
Other			331				352
Total deferred income tax assets			2,150				2,240
Valuation allowance			(310	)			(303	)
Net deferred income tax assets		$	1,840			$	1,937
Deferred income tax liabilities:
Intangible assets		$	(5,174	)		$	(5,365	)
Property, plant and equipment			(557	)			(636	)
Other			(472	)			(409	)
Total deferred income tax liabilities			(6,203	)			(6,410	)
Net deferred income tax liabilities		$	(4,363	)		$	(4,473	)

Changes in Unrecognized Tax Benefit

The changes in our unrecognized tax benefits were:

		For the Years Ended December 31,
		2016				2015				2014
						(in millions)
January 1		$	756			$	852			$	1,189
Increases from positions taken during prior periods			18				34				143
Decreases from positions taken during prior periods			(123	)			(74	)			(247	)
Increases from positions taken during the current period			90				84				147
Decreases relating to settlements with taxing authorities			(75	)			(13	)			(203	)
Reductions resulting from the lapse of the applicable statute of limitations			(43	)			(41	)			(64	)
Currency / other			(13	)			(86	)			(113	)
December 31		$	610			$	756			$	852

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
-URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32639-109319

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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
-Paragraph 2
-URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32537-109319

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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
-Section 50
-Paragraph 12
-URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32687-109319

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Tabular disclosure for 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 and other income tax contingencies. Includes, but is not limited to, interest and penalties, reconciliation of unrecognized tax benefits, unrecognized tax benefits that would affect the effective tax rate, tax years that remain subject to examination by tax jurisdictions, and information about positions for which it is reasonably possible that amounts unrecognized will significantly change within 12 months.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 740
-SubTopic 10
-Section 50
-Paragraph 15A
-URI http://asc.fasb.org/extlink&oid=65882285&loc=SL6600010-109319

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-Name Accounting Standards Codification
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-URI http://asc.fasb.org/extlink&oid=65882285&loc=d3e32718-109319

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-Section 50
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