Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Domestic and Foreign Components of Income Before Income Taxes

The domestic and foreign components of income before income taxes were as follows (in millions):


	Years Ended December 31,
	2013		2012		2011
Domestic	$	1,362	$	1,697	$	1,193
Foreign		1,762		1,643		1,601

	$	3,124	$	3,340	$	2,794

Components of Provision for Income Taxes

The components of the provision for income taxes consisted of (in millions):


	Years Ended December 31,
	2013			2012			2011
Current:
Federal	$	632		$	654		$	450
State		55			44			34
Foreign		592			357			751

Total current income tax provision		1,279			1,055			1,235

Deferred:
Federal		(157	)		(147	)		(23	)
State		(12	)		(1	)		(3	)
Foreign		(167	)		58			(315	)

Total deferred income tax provision		(336	)		(90	)		(341	)

Total income tax provision	$	943		$	965		$	894

Difference Between Effective Tax Rate

The difference between the effective tax rate reflected in the provision for income taxes and the U.S. federal statutory rate was as follows (in millions):


	Years Ended December 31,
	2013			2012			2011
Federal income tax at U.S. statutory rate	$	1,093		$	1,169		$	978
Foreign income tax rate differential		(216	)		(149	)		(149	)
State income tax, net of federal benefit		27			29			20
Nondeductible expenses		26			29			41
Tax benefit of manufacturing deduction		(33	)		(29	)		(37	)
Foreign dividends, net of foreign tax credits		32			(116	)		11
Change in deferred tax valuation allowance		40			80			(18	)
Other		(26	)		(48	)		48

Total income tax provision	$	943		$	965		$	894

Significant Components of Defered Tax Assets and Liability

Significant components of our deferred tax assets and liabilities were as follows (in millions):


	December 31,
	2013			2012			2011
Deferred tax assets:
Allowances and operating liabilities	$	439		$	368		$	331
Net operating loss carryforwards		51			25			14
Postretirement benefits		49			54			14
Foreign tax credit carryforwards		300			259			106
Other		39			149			151

		878			855			616
Valuation allowance for deferred tax assets		(133	)		(93	)		(13	)

Total deferred tax assets		745			762			603

Deferred tax liabilities:
Tax over book depreciation		306			268			204
Intangible assets		1,757			1,448			1,398
Deferred income		285			314			226
Accrued U.S. tax on unremitted earnings		92			92			70
Other		164			208			168

Total deferred tax liabilities		2,604			2,330			2,066

Net deferred tax liability	$	1,859		$	1,568		$	1,463

Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in millions):


	2013			2012			2011
Unrecognized tax benefit at beginning of year	$	128		$	131		$	118
Additions based on tax positions related to the current year		—			2			9
Additions for tax positions of prior years		—			—			13
Reductions for lapse of applicable statutes of limitations		(1	)		(5	)		(9	)

Unrecognized tax benefit at end of year	$	127		$	128		$	131