INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2013

Schedule of Provision for Income Taxes [Table Text Block]

The provision/(benefit) for income taxes consisted of:



	Year Ended December 31,
Dollars in Millions	2013			2012			2011
Current:
U.S.	$	375		$	627		$	864
Non-U.S.	427			442			442
Total Current	802			1,069			1,306
Deferred:
U.S.	(390		)	(1,164		)	406
Non-U.S	(101		)	(66		)	9
Total Deferred	(491		)	(1,230		)	415
Total Provision/(Benefit)	$	311		$	(161	)	$	1,721

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

The reconciliation of the effective tax/(benefit) rate to the U.S. statutory Federal income tax rate was:



	% of Earnings Before Income Taxes
Dollars in Millions	2013					2012					2011
Earnings/(Loss) before income taxes:
U.S.	$	(135	)			$	(271	)			$	4,336
Non-U.S.	3,026					2,611					2,645
Total	$	2,891				$	2,340				$	6,981
U.S. statutory rate	1,012			35.0	%	819			35.0	%	2,443			35.0	%
Non-tax deductible annual pharmaceutical company fee	63			2.2	%	90			3.8	%	80			1.2	%
Foreign tax effect of certain operations in Ireland, Puerto Rico and Switzerland	(620		)	(21.4	)%	(688		)	(29.4	)%	(593		)	(8.5	)%
State and local taxes (net of valuation allowance)	25			0.9	%	20			0.9	%	33			0.5	%
U.S. Federal, state and foreign contingent tax matters	134			4.6	%	66			2.8	%	(161		)	(2.3	)%
U.S. Federal research and development tax credit	(181		)	(6.3	)%	—			—		(69		)	(1.0	)%
U.S. tax effect of capital losses	—			—		(392		)	(16.7	)%	—			—
Foreign and other	(122		)	(4.2	)%	(76		)	(3.3	)%	(12		)	(0.2	)%
	$	311		10.8	%	$	(161	)	(6.9	)%	$	1,721		24.7	%

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

The components of current and non-current deferred income tax assets/(liabilities) were as follows:



	December 31,
Dollars in Millions	2013			2012
Deferred tax assets
Foreign net operating loss carryforwards	$	3,892		$	3,722
Milestone payments and license fees	483			550
Deferred income	2,168			2,083
U.S. capital losses	784			794
U.S. Federal net operating loss carryforwards	138			170
Pension and postretirement benefits	120			693
State net operating loss and credit carryforwards	377			346
Intercompany profit and other inventory items	495			288
U.S. Federal tax credit carryforwards	23			31
Other foreign deferred tax assets	187			197
Share-based compensation	107			111
Legal settlements	20			45
Repatriation of foreign earnings	49			86
Internal transfer of intellectual property	223			—
Other	357			344
Total deferred tax assets	9,423			9,460
Valuation allowance	(4,623		)	(4,404		)
Net deferred tax assets	4,800			5,056

Deferred tax liabilities
Depreciation	(148		)	(147		)
Acquired intangible assets	(2,567		)	(2,768		)
Other	(780		)	(734		)
Total deferred tax liabilities	(3,495		)	(3,649		)
Deferred tax assets, net	$	1,305		$	1,407

Recognized as:
Assets held-for-sale	$	125		$	—
Deferred income taxes – current	1,701			1,597
Deferred income taxes – non-current	508			203
U.S. and foreign income taxes payable – current	(10		)	(10		)
Liabilities related to assets held-for-sale	(946		)	—
Deferred income taxes – non-current	(73		)	(383		)
Total	$	1,305		$	1,407

Summary of Valuation Allowance [Table Text Block]

Changes in the valuation allowance were as follows:



	Year Ended December 31,
Dollars in Millions	2013			2012			2011
Balance at beginning of year	$	4,404		$	3,920		$	1,863
Provision	252			494			2,410
Utilization	(68		)	(145		)	(135		)
Foreign currency translation	40			39			(222		)
Acquisitions	(5		)	96			4
Balance at end of year	$	4,623		$	4,404		$	3,920

Summary of Income Tax Contingencies [Table Text Block]

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows:



	Year Ended December 31,
Dollars in Millions	2013			2012			2011
Balance at beginning of year	$	642		$	628		$	845
Gross additions to tax positions related to current year	74			46			44
Gross additions to tax positions related to prior years	108			66			105
Gross additions to tax positions assumed in acquisitions	—			31			1
Gross reductions to tax positions related to prior years	(87		)	(57		)	(325		)
Settlements	26			(54		)	(30		)
Reductions to tax positions related to lapse of statute	(8		)	(19		)	(7		)
Cumulative translation adjustment	1			1			(5		)
Balance at end of year	$	756		$	642		$	628

Summary of Income Tax Examinations [Table Text Block]

Additional information regarding unrecognized tax benefits is as follows:



	Year Ended December 31,
Dollars in Millions	2013		2012		2011
Unrecognized tax benefits that if recognized would impact the effective tax rate	$	508	$	633	$	570
Accrued interest	83		59		51
Accrued penalties	34		32		25
Interest expense	24		14		10
Penalty expense	3		16		7

- 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.

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