Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

Income Taxes

Schedule of earnings before income taxes

years ended December 31 (in millions)	2014			2013			2012
Domestic	$	(3,245	)	$	(581	)	$	625
Foreign		5,614			5,913			5,100
Total earnings before income taxes	$	2,369		$	5,332		$	5,725

Schedule of components of income taxes

years ended December 31 (in millions)	2014			2013			2012
Current
Domestic	$	634		$	226		$	94
Foreign		341			354			252
Total current taxes	$	975		$	580		$	346
Deferred
Domestic	$	(301	)	$	678		$	89
Foreign		(79	)		(54	)		15
Total deferred taxes		(380	)		624			104
Total income taxes	$	595		$	1,204		$	450

Schedule of effective tax rate reconciliation

years ended December 31	2014			2013			2012
Statutory tax rate		35.0	%		35.0	%		35.0	%
State taxes, net of federal benefit		—			0.3			0.1
Effect of foreign operations		(11.3	)		(11.5	)		(23.5	)
U.S. tax credits		(8.9	)		(2.7	)		(1.5	)
Branded prescription drug fee		3.7			0.4			0.3
Valuation allowances		3.6			0.1			—
Resolution of uncertain tax positions		—			—			(3.4	)
Non-deductible litigation loss		—			—			0.6
All other, net		3.0			1.0			0.3
Effective tax rate		25.1	%		22.6	%		7.9	%

Schedule of deferred tax assets and liabilities

as of December 31 (in millions)	2014			2013
Deferred tax assets
Compensation and employee benefits	$	627		$	279
Accruals and reserves		376			252
Chargebacks and rebates		297			333
Deferred revenue		382			348
Depreciation		53			64
State income taxes		62			67
Other		230			122
Net operating losses and other credit carryforwards		125			115
Total deferred tax assets		2,152			1,580
Valuation allowances		(172	)		(43	)
Total net deferred tax assets	$	1,980		$	1,537
Deferred tax liabilities
Excess of book basis over tax basis of intangible assets	$	(331	)	$	(508	)
Repatriation of foreign earnings		(326	)		(606	)
Total deferred tax liabilities	$	(657	)	$	(1,114	)
Net deferred tax asset	$	1,323		$	423

Schedule of unrecognized tax benefits

years ended December 31 (in millions)	2014			2013			2012
Balance as of January 1	$	247		$	1,140		$	1,039
Increase due to current year tax positions		115			195			370
Increase due to prior year tax positions		67			—			1
Decrease due to prior year tax positions		(6	)		—			(220	)
Settlements		—			—			(50	)
Lapse of statutes of limitations		(2	)		—			—
Separation-related adjustments		—			(1,088	)		—
Balance as of December 31	$	421		$	247		$	1,140