Income Taxes (Tables)

12 Months Ended

Dec. 31, 2015

Components of income before income taxes

The components of income before income taxes are as follows for the three years ended December 31:



	2015		2014		2013
United States	$	1,118	$	1,094	$	1,018
International	1,645		2,439		2,547
Total Income before income taxes	$	2,763	$	3,533	$	3,565

Provision for Income Taxes

The provision for income taxes consists of the following for the three years ended December 31:



	2015		2014		2013
United States	$	376	$	348	$	314
International	839		846		841
Total Provision for income taxes	$	1,215	$	1,194	$	1,155

Schedule of Components of Deferred Income Tax Benefit

Temporary differences between accounting for financial statement purposes and accounting for tax purposes result in the current provision for taxes being higher (lower) than the total provision for income taxes as follows:



	2015			2014			2013
Goodwill and intangible assets	$	3		$	(40	)	$	(14	)
Property, plant and equipment	(25		)	(13		)	—
Pension and other retiree benefits	36			19			85
Stock-based compensation	11			11			10
Tax loss and tax credit carryforwards	(4		)	5			(30		)
Other, net	98			(19		)	(33		)
Total deferred tax benefit (provision)	$	119		$	(37	)	$	18

Effective tax rate reconciliation

The difference between the statutory U.S. federal income tax rate and the Company’s global effective tax rate as reflected in the Consolidated Statements of Income is as follows:



Percentage of Income before income taxes	2015		2014		2013
Tax at United States statutory rate	35.0	%	35.0	%	35.0	%
State income taxes, net of federal benefit	1.0		0.7		0.4
Earnings taxed at other than United States statutory rate	(3.6	)	(2.3	)	(1.4	)
Charge for a foreign tax matter ⁽¹⁾	0.5		1.9		—
Venezuela accounting change ⁽²⁾	12.8		—		—
Other, net	(1.7	)	(1.5	)	(1.6	)
Effective tax rate	44.0	%	33.8	%	32.4	%

_________


⁽¹⁾	The charge for a foreign tax matter in 2015 relates to several Supreme Court rulings in a foreign jurisdiction disallowing certain tax deductions which had the effect of reversing prior decisions. The charge for a foreign tax matter in 2014 relates to a notice of an adverse decision in a foreign court regarding a tax position taken in prior years.


⁽²⁾	See Note 14, Venezuela.

Components of deferred tax assets (liabilities)

The components of deferred tax assets (liabilities) are as follows at December 31:



	2015			2014
Deferred tax liabilities:
Goodwill and intangible assets	$	(458	)	$	(497	)
Property, plant and equipment	(380		)	(380		)
Other	(150		)	(266		)
	(988		)	(1,143		)
Deferred tax assets:
Pension and other retiree benefits	541			638
Tax loss and tax credit carryforwards	30			33
Accrued liabilities	235			276
Stock-based compensation	123			119
Other	151			148
	1,080			1,214
Net deferred income taxes	$	92		$	71



	2015			2014
Deferred taxes included within:
Assets:
Other current assets	$	258		$	256
Deferred income taxes	67			76
Liabilities:
Deferred income taxes	(233		)	(261		)
Net deferred income taxes	$	92		$	71

Unrecognized tax benefits activity

Unrecognized tax benefits activity for the years ended December 31, 2015, 2014 and 2013 is summarized below:



	2015			2014			2013
Unrecognized tax benefits:
Balance, January 1	$	218		$	199		$	212
Increases as a result of tax positions taken during the current year	20			23			23
Decreases of tax positions taken during prior years	(25		)	(11		)	(52		)
Increases of tax positions taken during prior years	61			32			37
Decreases as a result of settlements with taxing authorities and the expiration of statutes of limitations	(79		)	(10		)	(22		)
Effect of foreign currency rate movements	(9		)	(15		)	1
Balance, December 31	$	186		$	218		$	199