Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

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,
	2014		2013		2012
Domestic	$	1,415	$	1,362	$	1,697
Foreign		2,079		1,762		1,643

	$	3,494	$	3,124	$	3,340

Components of Provision for Income Taxes

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


	Years Ended December 31,
	2014			2013			2012
Current:
Federal	$	681		$	632		$	654
State		43			55			44
Foreign		615			592			357

Total current income tax provision		1,339			1,279			1,055

Deferred:
Federal		(309	)		(157	)		(147	)
State		(5	)		(12	)		(1	)
Foreign		14			(167	)		58

Total deferred income tax provision		(300	)		(336	)		(90	)

Total income tax provision	$	1,039		$	943		$	965

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,
	2014			2013			2012
Federal income tax at U.S. statutory rate	$	1,223		$	1,093		$	1,169
Foreign income tax rate differential		(261	)		(216	)		(149	)
State income tax, net of federal benefit		25			27			29
Nondeductible expenses		24			26			29
Tax benefit of manufacturing deduction		(37	)		(33	)		(29	)
Foreign dividends, net of foreign tax credits		132			32			(116	)
Change in deferred tax valuation allowance		(83	)		40			80
Other		16			(26	)		(48	)

Total income tax provision	$	1,039		$	943		$	965

Significant Components of Deferred Tax Assets and Liability

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


	December 31,
	2014			2013			2012
Deferred tax assets:
Allowances and operating liabilities	$	542		$	439		$	368
Net operating loss carryforwards		118			51			25
Postretirement benefits		79			49			54
Foreign tax credit carryforwards		244			300			259
Other		15			39			149

		998			878			855
Valuation allowance for deferred tax assets		(48	)		(133	)		(93	)

Total deferred tax assets		950			745			762

Deferred tax liabilities:
Tax over book depreciation		236			306			268
Intangible assets		1,304			1,757			1,448
Deferred income		257			285			314
Accrued U.S. tax on unremitted earnings		107			92			92
Other		377			164			208

Total deferred tax liabilities		2,281			2,604			2,330

Net deferred tax liability	$	1,331		$	1,859		$	1,568

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):


	2014			2013			2012
Unrecognized tax benefit at beginning of year	$	127		$	128		$	131
Additions based on tax positions related to the current year		3			—			2
Reductions for lapse of applicable statutes of limitations		(15	)		(1	)		(5	)

Unrecognized tax benefit at end of year	$	115		$	127		$	128